Broadline Players Still The Go-To Guys
“I still think the broadline distributors like Ingram and Tech Data are the best solution out there,” Deeley said. “I get presale support, post-sale support. They have their own engineers and help you create a solution.”
roadline distributors continue to rule the sourcing roost despite the incursions of competitors ranging from specialty distributors to online auction sites.
And familiar names reign supreme, according to solution providers who responded to the CRN 2005 Sourcing Study.
Tech Data, Ingram Micro and Synnex grabbed the top three spots, respectively, on the list of the top 50 preferred sources for products in this year’s survey. D&H Distributing finished seventh.
Among this group, Ingram Micro, Santa Ana, Calif., and D&H Distributing, Harrisburg, Pa., tied for No. 1 in terms of performance, with Clearwater, Fla.-based Tech Data and Synnex, Fremont, Calif., finishing third and fourth, respectively.
“We absolutely continue to buy from the top three [broadline distributors],” said Rich Tear, CEO of CSCI, a solution provider in San Diego. “Our customer base is spreading out across the country, and it really helps us to have a warehouse in New York, for example.”
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Tear also said that since the largest distributors have been in business for 20 years or more, they are attuned to the ebb and flow of the market. “It helps to have partners who understand complex pricing issues, and they’ve learned how to adjust to them and get involved in them. The big boys just seem to have the model down. It’s like driving a perfect car. Why not drive that one instead of a flawed one, when you are paying the same price for both?”
Bob Parsons, president of Automated Office Solutions, a solution provider in Evansville, Ind., said price is what keeps him tied to Tech Data as his primary source for products. “I get better pricing from Tech Data than I get from most other places,” Parsons said.
In addition, he said he appreciates Tech Data’s ability to drop-ship products directly to his customers, a service most broadline distributors offer but one that is not always available from smaller distributors.
When Parsons does stray from broadline distributors, it’s for products they don’t carry. He sometimes finds himself dealing with small distributors that carry specialized educational software, for example.
Still, despite his loyalty, Parsons acknowledged that Tech Data doesn’t have a lock on his business. “We shop Tech Data against Alltel for MBX phone stuff,” he said. “Tech Data is always still my first choice, but I look around.”
Other solution providers say they likewise have shopped their business around; some of them indicated that they have drifted away from distributors as a result.
Ted Hunter, general manager of Champion Networks, a solution provider in Brunswick, Maine, said he uses distributors mainly to find the best price on a given product. But increasingly, Hunter has gravitated toward the agent model, in which he doesn’t handle systems at all but instead receives an agent fee for referring customers directly to system vendors. His company currently has agent relationships with Hewlett-Packard, Gateway and Premio, which means he’s buying less from those companies’ distributors.
“We do so much with the agent model that the role of distributors for me is basically software licensing,” Hunter said. “I don’t have to be a bank; I can call HP and they can deliver products and take care of the billing, and I can do the same thing with Gateway and Premio.”
What’s more, Hunter said the plethora of product sources available over the Web lessens the value of distributors in his eyes. “Even protected products are available everywhere,” he said.
But for every solution provider like Hunter, there’s one like Brian Deeley, president of Graymar Business Solutions, Timonium, Md., who said he has built up relationships with the broadline distributors over the years and sees value in continuing those alliances.