Distribution Trends: Your Personal Supply Chain

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?

 

Michael Flink: “When purchasing online dealers are looking for two things— first is the ease of searching for products and information and second is pricing. ADI has made a large investment over the past two years to upgrade its Website to world class standards and make online shopping at ADI much easier. The feedback from our dealers is that our site is one of the strongest in the industry. We are constantly reaching out to our customers for feedback on our site and have an ecommerce team and programmers making improvements every day. In terms of price, ADI has always been competitive and does not face challenges meeting legitimate online prices.

Although purchasing online has become more popular, much of our sales still come from our 99 branch locations across North America. Dealers depend on our extensive inventory and continue to rely on our experienced staff to help them meet the challenges of their end users. Our branch locations are important to our business, and ADI has opened two new branch locations this year as part of our overall four-year expansion plan. We strive to provide an excellent shopping experience to customers and always look to them for feedback to improve our service. Our customers tell us that we have the broadest range of in-stock products and our large branch locations add more value over smaller local distributors or mail orders.”

 

Tony Sorrentino: “We work with our dealers to help them differentiate themselves through end-user marketing assistance, education and training, as well as helping them better understand how to sell their value and not just price. It’s our job to provide products to our dealers in the way they want to buy them—online or by contacting our sales reps. We can either ship to them for free, have it at their doorstep the next day, or they can place the order themselves 24/7 through our FastCatalog tool, where they also have access to real-time inventory. We want to make it easy for our dealers to do business.”

 

Pat Comunale: “We have a robust Internet site as well, so our customers can buy online. The personal touch and the knowledgeable sales people drive people to use our branch locations, especially with more video and intrusion products in the space, and to make sure they get the right product for the job. As a company we spend more money training and getting dealers and integrators certified than others in the industry. So we have the most knowledgeable personnel in the industry. With our IP EZ program, we can pre-program IP cameras with their Internet addresses for existing customers at a nominal price. We feel we can deliver what the competitive space needs, especially as we grow into the data communications space with the exciting partnership we announced recently with ComCables.”

 

What are some of the ways you are attracting folks to your Website or distribution centers?

 

Michael Flink: “We have taken a multi-phase marketing approach to attract dealers to ADI starting with our new ecommerce Website, where dealers can purchase products for pick up or ship. We have also been expanding and relocating some of our branches to make customer access easier and driving to our locations more convenient. We offer 50 ADI Expo Training Series events per year across North America and we also have an industry leading advertising campaign that provides increased value to our customers and prospects. Our advertising initiatives include monthly promotions that feature 16 pages of sale items and our quarterly catalog that offers 750+ pages of product information, and has been recognized as the industry’s premier source of information. “

Tony Sorrentino: “We offer the industry’s leading education and training workshops and events on the benefits of selling IP and the technology in general, much of which is accessible online through our IP Center, online training courses and web seminars. We provide tours of our state-of-the-art distribution center on a regular basis and upon request. ScanSource has a centralized distribution model so that we can be as efficient as possible and provide the best pricing to customers, as well as a high level of support. The hub of our distribution strategy is our distribution center, which is located in Southaven, Miss. Our dealers are always very interested in our distribution center, which features a Custom Configuration Center where we configure and test the complete solution, so that it is ready to ship to the dealer or even drop-shipped to their end-user customer on behalf of the dealer. Services include setting IP addresses, labeling, custom reporting and hardware and software integration, among many others.”

 

Pat Comunale: “We have, numerous blast emails and other marketing campaigns for our customers. We also have an online system where customers can check product availability and pricing. Most customers are still calling in their orders or visiting our locations, about 50 in the U.S. and Canada.”

 

What do you think systems integrators want from their distribution partners today?

 

Michael Flink: “Systems integrators want service, support, credit and great relationships they know they can trust to help them in the good times and bad. They want to be able to get the products they need quickly, efficiently and on time. Also, today in a tighter economy we have been getting a lot of requests for additional payment options and we have responded to this with a variety of flexible payment options, including the ADI credit card. At ADI, we consistently survey and talk to our customers to find out what they need and what we can do to help them grow.”

 

Tony Sorrentino: “We have heard from our dealers that the fact that we do not sell to end users is a key differentiator for them. They want to know that they are working with a partner, not a competitor. That, in addition to the knowledgeable sales and technical support staff and value-added services we provide that enable dealers to focus on growing their business.”

Pat Comunale: “The complete line card is important to the integrators and these customers want to have that one-stop shop. With that in mind, we are more than a security distributor; we will branch out of security to data communications more and more. We also carry the high end and other products systems integrators need for full solutions contracting. For more traditional security dealers, we also have the level of products they need. We called it a hybrid approach when we first merged. But that model has become high-end and general video distribution.”

 

For the expanded version of this story, see www.securityinfowatch.com/10796824

 

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