Reader Reaction: Is disties consolidation good for resellers?

Sydney Borg, CEO, PCS Australia

I would probably sit on the fence and say I’m cautious of it. As distributors become too big they cannot possibly do their suppliers justice: when you’re an organisation turning over a billion dollars and you’ve got 5,000 and 10,000 product lines, how can you possibly know all those product lines and push them, which is what the manufacturer wants you to do? It has to effect the reseller because our knowledge [and ability to be] kept up-to-date is being jeopardised. I’m still old fashioned. I need the manufacturer to tell me how good their product is, and why I should be selling their product. I don’t blame the distributors. They cannot possibly have that level of knowledge across all their product lines.

Angus Mansfield, sales director, XCentral

From the point of view of relationship management, it’s going to make things easier. There are a lot of distributors in the Australian channel and it’s not always easy to maintain relationships with all of them. In the case of the Express Data and Dicker Data merger, that is a merger of two of our biggest distributors… I would hope that the good cultures that tend to exist in both businesses mean that it’s going to be a good merger. Off the top of my head, there are 15 or so distributor relationships [for XCentral] to maintain. Any consolidation within that is probably positive from our point of view because it allows us to focus rather than spread ourselves thin.

Jake Wynne, managing director, Oriel

It’s a double-edged sword. Fewer distributors is a good thing in reducing the total number of relationships to manage. But having fewer distributors potentially means less credit available for the resellers. Express Data is a really great fit for Dicker – the addition of a software business to largely a hardware-based business. This will allow Dicker to provide a broader product range to resellers and get a bigger share of reseller spend. Theoretically the bigger the distributor and the increase in share of reseller spend means the potential for better margins for the reseller. We are all going to need to retune our businesses and add additional value to ensure our business models remain profitable.