Distribution isn’t about logistics anymore, it’s about innovation. And in a crowded market, innovation will be essential to avoid being acquired or going bankrupt.Ingram Micro took top marks as favourite distributor in this year’s CDN Resellers’ Choice Awards, followed by Supercom, Tech Data, Bell Micro and Synnex.
Ingram’s highest scores were in product range and programs, while its lowest score was in quality. Supercom scored low in product range, but excelled in value, programs and service.
All distributors, though, had low scores in innovation when compared to their other scores. And innovation will be a key differentiator going forward.
Of all the distributors, Ingram Micro had the highest score in innovation — a reflection, perhaps, of its focus on developing new lines of business like storage and security.
This comes at a time when some of the largest distributors have streamlined their business processes. Ingram Micro, for example, cut jobs earlier this year in an effort to save US$25 million per year from its North American operations. It also moved some customer service and tech support jobs offshore.
Global markets
At the same time, these distributors are betting on emerging technologies and global markets. Relying on commodity products isn’t going to cut it anymore.
So they’re offering new services, acquiring specialty distributors and expanding abroad. Ingram Micro, for example, bought Tech Pacific, an Australian distributor, to target sales in the Asia-Pacific region.
In some cases, going global means making adjustments to their business model. In Europe, for example, Tech Data is less focused on volumes, taking a more “high-touch” approach than in North America.
Broadline distributors are also becoming more specialized and competing directly with niche players. Ingram Micro recently purchased Nimax, a point-of-sale distributor, and AVAD, a group of 12 distributors that specialize in consumer products. And Tech Data expanded its POS and telephony businesses with specialized business units that focus on those technology solution sets. The small and mid-size business market is another area that’s heating up and causing intense competition.
How will this focus on emerging and specialized technologies affect niche distributors? Ingram Micro and Tech Data, for example, are now competing directly against point-of-sale distributor ScanSource.
What will set any distributor apart, broadline or niche, is innovation. Because so many distributors offer so many of the same product lines, resellers have more choice than ever. It means they can be more selective about which distributor they do business with based on other factors, such as programs, service and incentives.
And, according to readers in this year’s survey, this is an area where all distributors have room for improvement.
