The state of distribution is changing. Integrators and dealers are going to the Web to peruse products, often purchasing them online if familiar with the specifications. Other times, they’ll visit the distribution center to purchase products, but even more so, for the value-add distributors provide. We’ve interviewed three major distributors and their principals for their take on what’s happening, how the Internet is changing supply and what we can expect to see in the future. Here’s what they had to say:
What are some of the challenges and opportunities faced by distributors?
Michael Flink, president, ADI Americas, Melville, N.Y.: “One of the challenges faced by security distributors today is the faster rate in which new products and technologies are being introduced from more manufacturers. At ADI, we recognized this challenge and made a multimillion dollar investment to create ADI University to train our staff and ensure they are up-to-date on the latest technologies. We’ve hired an experienced director of training to lead the initiative, and have set aside dedicated time each week to train our sales staff. We have already received positive feedback from the sales team, along with numerous requests from customers to provide them with access to the ADI University. As for opportunities, we are seeing increased growth opportunities in the IP and video surveillance market, as well as across all product categories. For the integrator community, there is more opportunity in network infrastructure with the increasing adoption of the connected home.”
Tony Sorrentino, president, ScanSource Security, Greenville, S.C.: “A challenge many dealers in our industry are facing is margin pressure. Because of that, it’s up to the distributor to continue to evolve and offer new products and services that can help dealers be successful and add value to their end-user customers. For us, we want to ensure our dealer partners are aware of the services we offer, including training, certification, configuration and technical support, while also sharing the benefits they can reap by allowing us to carry their inventory, such as enhanced efficiency and cost savings. This allows us to help make their projects more profitable, while enabling them to fulfill new opportunities for their end-user customers. We are continuing to educate vendors and dealers on the importance of centralized distribution versus the branch model. Our expansive inventory is ready to ship same-day for orders placed before 8 p.m. est. We also constantly review the services we offer to ensure they provide value to the dealer and relevancy to their business.”
Pat Comunale, president and chief executive officer, Tri-Ed/Northern Video Distribution, Woodbury, N.Y.: “We have found the security products distribution space to be growing. The independent seems to be doing better in 2012 than 2010 and 2011. There are also many more manufacturers of products and they are starting to see the benefit of using the distributor more. More and more products are getting put through the distribution channel. It’s a benefit to these manufacturers in a number of ways. The distributor takes on more of the credit risk and the manufacturer doesn’t have to have as much inventory on hand. In addition, we’ve brought on several new vendors to round out the IP space of the market. We want to be a significant presence to our vendors, and we don’t carry every product line. We are growing and have made some acquisitions to our locations (Sea Breeze Security Distributors was the most recent, and Tri-Ed/Northern Video also announced a partnership with ComCables). We will open new locations in Detroit and Raleigh, N.C. and continue to actively look for strategic acquisitions. The IP part of the business is definitely growing, as well as residential lifestyles.”
How are you facing the Internet head on—are more people buying products online or are they still going into brick and mortars?