Hail the age of Distribution 2.0

Altech, Cellnet and Impact weren’t the only firms avoiding the pure niche or broadline tag. Distribution Central and WhiteGold Solutions have even invented their own terms for how they sit in the distribution landscape. Distribution Central claims it is operating a “distribution in depth” model, while WhiteGold is coining the phrase “Unified Value Distribution”.

“We built our business four years ago based on a completely different view of the antiquated “time and place” or broadline versus value-add or niche model, and the arguments, pitches and dilemmas [around the two models],” said Nick Verykios, marketing director of Distribution Central. “The argument is still being thrown around because distributors have legacy investment and thinking in their systems that relate to one or the other [of the two models]. The vendor and reseller community has evolved way beyond these traditional definitions and respective models.”

Verykios believes a dual model between niche and broadline has worked for Distribution Central and is a model which throws the niche versus broadline argument into the “vaults of history”.

“Niche versus broadline is a rhetorical argument. You need to be both. In short, you need to add value everywhere. And if you are a so called “value-add” distributor, you need to add extreme value in the traditional “time and place” or logistics realms of the service portfolio you are offering. That is the model that has given us this success,” said Verykios.

Explaining its “distribution in depth” model, Verykios said it shows a movement from either broadline or value-add to a new model where technology solutions are represented by distribution and these technologies are delivered to the channel through three distinct service portfolios: transaction optimisation, market development services and knowledge-driven services.

Transaction optimisation was historically the domain of broad-based distributors focus, explained Verykios. But every distributor must add extreme value by offering configuration, annuity and licensing engines including web services to resellers and vendors.

He said market development services are important as everyone needs to create tailored channel programs for their vendors now, specific to each vendor. “You can’t broadline the value and you can’t focus on just one vendor. Mass customisation of vendor programs is essential to localise them and make them relevant to our market,” said Verykios.

The final “distribution in depth” aspect of knowledge-driven services are professional services a distributor invests in to generate skills that a reseller can augment into their own skill.

“The distributor engages at a level that suits the customer, not the other way around,” said Verykios. “We have executed on this by moving the broadline services into Distribution Central, and maintaining the value inherent in specialisation such as sales, marketing and engineering into various independent business units.”

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