Distribution is not just about pick, pack and ship anymore. Solution providers are looking for other services from their distributors.Little in the core competencies of IT distributors has changed in recent years. After all, once you achieve huge breadth of product lines and accuracy levels just shy of 100 percent in the pick, pack and ship business, little if anything remains to be improved.
Nonetheless, distributors such as Tech Data, Ingram Micro, Arrow and Avnet, all of which are multibillion- dollar companies, aren’t resting on their laurels. Rather, they continue to beef up service offerings to make themselves more relevant than ever to solution providers and vendors, in some cases even taking over their functions.
While the encroachment on their turf might have worried solution providers in the past, these days they are happy to see distributors expanding their role.
When Amazon Consulting recently asked North American solution providers what they leverage distribution for today, we weren’t surprised to find that core operational services such as product availability, flexible shipping options and creative financing were the top responses. But we also found that things such as helping with navigation of complex products and licensing programs, and field sales and technical support also rated very high.
“Historically, price has always been the key element for us when choosing direct versus distribution,” said Steve Roux, president of Innovative Computer Systems, in Farmington, Conn. “Now, with the complexity of our offerings and longer sales cycles, we need additional services, which are certainly worth paying a little more for.”
Both broad-line distributors such as Ingram and Tech Data and technical distributors such as Arrow and Avnet have continued to launch new value-added services that push the boundaries of traditional wholesale distribution. Offerings such as Ingram Micro’s Seismic Platform Services, Arrow’s Tango Collaborative Services and Synnex’s Printsolve on-demand print management not only deepen distributors’ foray into services but also relieve solution providers of some of their sales and service functions.
As technology gets more complex, providers welcome this development and want distributors to do more. In a survey conducted by Arrow’s Enterprise Computing Solutions group, solution providers shared their desire to have Arrow anticipate and understand market trends, help them navigate the sea of emerging technologies, and, most important, buffer the myriad programs and processes presented to them by the manufacturers they represent.
“A distribution partner that only satisfies order fulfillment does not cut it in today’s aggressive market,” said Mike Guglielmo, CEO of Apollo Information Systems, in Los Gatos, Calif. And, as solution providers try to increase their services and intellectual property development, they are increasingly using their distributors to offload their core product integration, fulfillment and delivery roles.
Clearly, solution providers are becoming more discerning than ever about leveraging distributor partnerships. As technology continues to evolve and become more complex, the trick will be for distributors to find the right balance between the basics of logistics and how many services they offer solution providers without appearing to threaten them.
Beth Vanni, director of the Consulting Practice at Amazon Consulting, can be reached at bvanni@amazonconsulting.com.
