Brendan Major, director of Canberra’s MIT Services, ranked No.5 in the 2015 CRN Fast50, relies on Dicker and Ingram Micro for most of his purchases. Ingram’s e-commerce marketplace is “relatively good”, he says. “It’s full of information, but you if you ring you get a better price. That’s pretty much true for every distie. They have a standard online reseller’s price, but when you call and say, ‘I want five, can you give me a better price’, you get a better price.”
While everyone has an e-commerce portal these days, not all portals are equal. Some are harder to search, others can’t suggest relevant matches, Major says. If you order one component of a solution on the Ingram portal, it will tell you the others needed to make it work.
Beyond its e-commerce site, Ingram used 2015 to make some major headway with its cloud marketplace, and claims to have reached 1000 Australian channel partners using the system by the end of the calendar year. The marketplace leverages a global platform built on a Parallels system. In fact, late last year Ingram acquired the intellectual property behind the Odin platform, adding 500 staff and effectively shutting out potential competitors from using the marketplace technology.
While Ingram has invested heavily in cloud, the distie has also improved its offline presence in the past six months, Major says. “They have realised you can’t rely just on cloud.”
Dicker has done the same. Both disties have spent up on local resources to make sure there are people to help design solutions or negotiate deals.
On the other hand
Some distributors have shown little interest in cloud. For those primarily centred on hardware, such as printing, it wouldn’t make sense. E-commerce sites are enough. Printer reseller EFEX Group sticks with just two disties, Alloys and Dynamic Supplies, for multi-function printers, photocopiers, parts and consumables. Neither sells cloud computing services. EFEX chief executive Nick Sheehan says he’s happy with how business has always been done.
“Our business is very relationship-based,” Sheehan says. “Having that same approach with disties has served us well.”
The decision to limit business to two distributors is connected to the way in which EFEX does business. “The big advantage of dealing with a smaller number of disties is that you get a better level of service because of the loyalty you show,” Sheehan says.
EFEX does place orders through Alloys’ web interface, but these tend to be small jobs where there’s no leverage on pricing. Many of EFEX’s orders are larger and complex in terms of the number and type of products. If the reseller wants special pricing, it has to be done over the phone.
One reason is that a web platform will have a limited set of variables that relate to the mix of stock and the size of the order. The reality is that distributors work from a broader set of intangibles that reflect the nature of a high-turnover business. Those intangibles push buttons for resellers looking for a better price.
“You’re far more likely to do a deal on a slow-moving line than a fast-moving line,” Sheehan says.. “That’s very hard to do if you’re pushing stuff through a web platform. That hand-to-hand combat will always be there, in that instance.”
Does Alloys have plans to add a full-blown e-commerce portal like other players? “It’s not our preference to go that way,” says chief executive Paul Harman. “We need to grow the capabilities of the SME channel through training, demos and putting together solutions. I haven’t found a way to do it in a virtual space as well as in a physical space.”
Harman’s position is partly based on the readiness of Alloys’ customers to move to negotiating online. “I still think decision-makers in the SME channel are more hands-on and real conversations are more effective.”
Disties that specialise in physical products that can’t be virtualised, such as printers, will probably be some of the last to migrate to online marketplaces. Resellers need demonstrations of mechanical products to understand how they operate and how to educate customers on the ways to use them.
Resellers often lack enough staff to know all the products in detail, which is where disties can step in with advice and expertise, Harman says.
Alloys’ staff spend a lot of time explaining products to resellers in showrooms, during training and events or in conversation.
Harman says it’s likely this style will change over time for some products. It has already for consumables, which are more commonly transacted over the web.
“I think you have to provide the best of both worlds – face-to-face relationships and [the ability] to place orders when you want to do it,” Harman says.
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