Daisytek Pushes For Larger Share of VAR Segment

Now, it is focused on increasing its customer base, and has completely revamped its reseller toolkit to help bring in the numbers. Of course, part of that plan is to attract more companies that Daisytek already does business with, such as office product retailers and supply houses. But the distirbutor also plans to focus more energy on the VAR market.

"We would love to do more and more business with VARs," said Jim Powell, Daisytek CEO. At the moment, VARs represent a mere 15 percent of Daisytek's total customer base. But the distributor believes it can boost that number with a better proposition--which includes greater depth of product and more product knowledge--than broadline distributors.

Daisytek proposes that it can help VARs drive topline growth while pushing out costs. VARs can take advantage of the distributor's specialized e-business tools or even allow Daisytek to merchandize their Web sites. "Anything we can do to help [customers grow, we are commited to doing," said Powell.

So far, that committment is working because Daisytek's sales have been steadily climbing. Before completing the ISA acquisition, Daisytek expects revenue in the range of $1.3 billion to $1.4 billion for fiscal 2002, with revenue growth in the United States between 10 and 15 percent. Once the acquisition is complete, the distributor anticipates an additional $510 million in revenue.

One reason for that success is that even in a slow economy, companies still need computer supplies, such as paper and ink cartridges, said Powell. If VARs aren't including supplies, accessories and office products in their proposals, they're missing out on lost sales, he said.

The 2003 edition of the reseller toolkit is the latest evolution of an online sales tool introduced last year. Today, more than 5,000 customers are using the tools and visiting the distributor's Web site every two weeks. The toolkit is loaded with detailed marketshare information, marketing tools and channel selling strategies for various computer supplies and office products. It can be downloaded for free at www.daisytek.com.

"[The toolkit offers more solutions, more often and gives the reseller the opportunity to add real value, not only with up-to-date information, but also with the means to communicate to their customers," said Craig Higgs, senior vice president of marketing at Daisytek U.S.

But Daisytek didn't let its push to attract more VARs stop with online tools. The distributor plans to beef up its drop shipping requests--currently at 60 percent of total sales--with faster and more efficient logistics capabilities. By Jan. 1, Daisytek plans to open new 300,000-plus square-foot distribution centers in Albany, N.Y., and Bakersfield, Calif. Plans to retrofit its Memphis distribution facility will be completed on Dec. 1.

D&H Distributing Gives Credit Where It's Due

Many small to midsize VARs are still having trouble obtaining more credit through their personal banks and many have exhausted their supplier credit lines as well. "In difficult economic conditions, [VARs can see pressure on both fronts," said Dan Schwab, vice president of marketing at D&H Distributing.

To alleviate some of the pressure, D&H created some new ways for VARs to pay for their orders. For starters, the distributor doubled the credit lines of nearly 1,000 customers during the last six months. The company also created an Assignment of Proceeds program, which enables education resellers to assign part of the end-user's purchase to D&H, with no finance fee.

"As business gets tougher, so does obtaining credit lines," said Schwab. "But our business has been very strong, and we've been able to look at it in a positive light." D&H is experiencing double-digit growth overall this year, and the components and system configuration business has been strong, added Schwab.

D&H also offers PayNet, a free service provided through Bank of America that enables customers to make full or partial payments to D&H electronically via the distributor's Web site.

Additionally, D&H offers four different floor planning options and does not charge customers to process credit applications. In the near future, D&H will also release D&H COD Saver, an electronic payment transfer service which allows COD customers to pay for shipments three days after invoicing.