Altek Consulting Group enjoyed steady but modest growth in its first two years as a small-business and point-of-sale solution provider. Then it got a call from Tech Data.
The Clearwater, Fla.-based distributor persuaded Altek to take its business to the Internet, allowing customers to make purchases online. It was one of the best decisions Altek ever made, says Audrey Levi, president of the Miami-based solution provider.
Sales have tripled and margins have doubled as Tech Data helped Altek shift from a product-focused company to one that sells services and solutions, says Levi.
 Audrey Levi has seen Altek's sales triple and margins double following help from Tech Data. |
"[Tech Data] helped us with the ability to process large orders, turn quotes around quickly, get tracking information," Levi says. "Now, we help with configuration services and product recommendations. We have sales people who don't worry about finding stock. We've become more consultative and are going after much larger business."
Tech Data is not alone. Through its Premier Partner program, Merisel Open Computing Alliance (MOCA) helps solution providers develop business plans, learn to sell to CEOs, receive IBM e-business certifications and generate demand.
"We tell them step by step what investments they need to make. By the end of this, they will be the go-to reseller in that space for IBM and MOCA," says Dave Ochser, vice president of enterprise product sales and business development at MOCA, El Segundo, Calif.
MOCA, a division of distributor Merisel, absorbs most of the training costs, banking on fostering loyalty among customers.
"It's an investment we make. Long term, we hope to create that stickiness so they will buy through us, and we will recognize profit on the back side," Ochser says.
Tech Data management also hopes initial costs up front will return greater profits. Fifty-five percent of Tech Data's business comes from its VAR customers. And Chairman and CEO Steve Raymund wants to move those folks to the Internet.
More than 500 solution providers use Tech Data's Web customization tool kit for their storefronts. The distributor needs to upgrade its own infrastructure to provide that support.
"The world is changing. [Solution providers] know it and there's some pretty intense pressure on them. Particularly in the Web space. Most are very open to explore how to modify their old models to take costs out of the equation," says Tim Curran, senior vice president of sales at Tech Data.
At first, many solution providers, Altek included, hesitate to allow distributors more access to their business,that needs to change, Levi says. "There's still a lot of mistrust out there. But this is a new economy, whether you like it or not. You're not going to stop it by not participating. The only thing you're likely to do is cripple your business."
