Tech Data branches into new ground

As the new kid on the block, DiBoss Canada Inc. is banking on a recently-inked distribution agreement with Tech Data Canada to not only build brand recognition in the LCD TV market but also develop strong channel partnerships.

Tech Data was introduced to the Korean manufacturer by its Swedish subsidiary, which has built a relationship with the vendor over the last three years. Currently DiBoss is positioned first in the LCD TV market in Switzerland with close to 50 per cent market share and second in Sweden with about 30 per cent, according to Stephen Lee, marketing manager at DiBoss Canada.

“Overall in Europe (France, UK, Germany, Switzerland and Sweden), we have 10 per cent of the market,” said Lee. “For a small-to-medium enterprise, we’re the fastest growing company in the LCD TV market, and we’re competing with Sony, Philips, Samsung and LG.”

Tech Data will add DiBoss to its existing flat panel display line of products, which includes Samsung, ViewSonic, NEC and HP. But according to Greg Myers, vice-president of marketing at Tech Data Canada, DiBoss’ exclusive offering of LCD TVs will be a new line of business for the distributor.

“We’ve been mostly active in flat panel desktop displays and large format displays for airports and other industrial applications. That’s been primarily our focus,” said Myers.

Although the manufacturer has penetrated most of the European consumer retail chains, Lee’s strategy in Canada is to target resellers specializing in markets like hospitals, restaurants and governments.

“We want to concentrate on that (reseller) relationship and not go into the retail market like Best Buy and Future Shop,” said Lee. “We want to only go through the channel. We don’t want to sell direct to mass retailers.”

For resellers serving the hospitality, health and commercial space, “this is a big opportunity”, said Myers.

“It is a very interesting product category for resellers. There’s a huge upgrade market potential in the commercial space and it’s our resellers that call on those accounts today. We hope they see this as an opportunity to expand their business,” he said.

Myers added that the margin potential on DiBoss products will be better than what resellers are earning on desktop PCs, notebooks and systems products. “It’s an opportunity to focus on a new category where there is significant growth and where profit margin is better — into the double digits,” he said. “If you can blend some of this revenue into current activities, bottom line should improve over time.”

By the end of the year, said Lee, DiBoss Canada wants to penetrate as much as the channel as possible, “at least cover 80 per cent of the reseller market.”

Although the company hasn’t structured a channel program, Lee is open and flexible to building one. “We will look into establishing partnerships,” he said. “Our main focus is to create awareness and maintain a brand image while infiltrating the LCD TV market as much as possible.”

DiBoss carries three models of TFT (thin-film transistor) LCD panels ranging from 10 to 46-inches. “In Canada we want to target the larger size LCDs – 32, 40 and 46-inch,” said Lee. “Now in the LCD TV market there is a greater demand for 32 and up.”

The manufacturer plans to test its strategy in Canada before entering the U.S. market. “We want to carefully launch our product in Canada and then look into expanding,” said Lee. “We will slowly start to test the U.S. market later this year depending on the results we see here.”

New credit program

Meanwhile,Tech Data Canada announced it has partnered with Nexcap Finance to offer resellers a new credit program called FlexFunds Financing Program.

“We have a third party finance company that is extending credit to our resellers based on the financial strength of the end users,” said Jose Brito, the distributor’s director of credit services.

“Typically the financial strength of the end users that our resellers deal with is very good and that allows resellers to leverage that relationship in order to maximize their credit availability or go beyond the credit availability that they have with Tech Data.”

The main benefit of this new program, added Brito, is that the credit available to the reseller could be limitless depending on the customers they deal with.

“This allows them to maximize volume of business with particular end users and focus on the sale rather than finance transactions,” he said.

Once a transaction has been submitted to Nexcap Finance, the reseller will receive payment in seven days. Users of the FlexFund program will incur a 1.5 per cent fee per transaction.

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