D&H finds success via value-added services, strengthened channel ties
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Niche distributors are working with solution providers to aggressively target the education market, which they say isn't dominated by broadline distributors and offers fresh opportunities.
"Our education division has been stellar as of late," said Dan Schwab, vice president of marketing at D&H Distributing, Harrisburg, Pa. "We've taken it from nothing to a very strong business."
D&H set up an education division in 1996 after noticing that the education market was growing despite little attention from the channel, Schwab said. Today, the distributor's goal is combining the best price and delivery with customized service.
D&H creates back-to-school kits, product bundles and point-of-sale displays for solution providers and retailers. The company also unveiled plans to launch an online software licensing module.
The distributor has strengthened ties with a growing set of channel partners including key education software vendors Havas and Riverdeep, which recently switched to D&H from Ingram Micro.
D&H's 40 education sales representatives also will visit solution provider accounts on-site, build marketing programs, help schools run technology fairs and recommend product placement diagrams to help retailers squeeze more IT education sales from stores.
The distributor has enjoyed education sales growth of 61 percent in 2000, 42 percent in 2001 and expects more than a 30 percent increase in 2002, the company executives said. Education software licensing was up 108 percent in 2001 over 2000.
Journey Education chose D&H for the value-added services and expertise from sales representatives, said Lee Wicker, senior buyer at the solution provider, whose relationship with the distributor spans four-and-a-half years. "I always look at D&H like this: If I was going to be a distributor, I'd model it after D&H."
>> Company expects a more than 30 percent sales increase for 2002.
>> Education licensing business up 108 percent in 2001.
>> K-12 software revenue grew about 40 percent in 2001, primarily via licensing sales.
SOURCE: D&H DISTRIBUTING
Will Handley, vice president of marketing and operations at Hauppauge, N.Y.-based solution provider Education Technology Association, met D&H representatives at a Breakaway XChange conference three years ago. At the time, his primary distributors were Ingram Micro, Merisel, Pinacor and Tech Data.
"They've been able to give us the pricing that Ingram Micro can give, but they also give us boutique service," Handley said.
Networking distributor Westcon Group maintains databases for education resellers with information about school contact information, new school construction, planned IT renovations and available federal grants to help schools fund IT projects, said Ronald Sheps, education marketing manager at Westcon Group.
The distributor anticipates 20 percent to 30 percent growth in the education space in the next four to six years, Sheps said. Westcon Group has seen about 20 percent education sales growth year over year for the past five years.
Broadliners aren't standing still. Tech Data navigates the education market as part of an overall government focus and manages discounts with vendors, offers configuration services, drop-shipping, installation assistance, certification and training, and conducts technology road shows.
"The education market is something we're very well-versed in and have managed for years," said Terry Bazzone, vice president and general manager of strategic business development at Tech Data. "We manage a lot of the [solution providers' administration that makes their lives easier."
Ingram Micro has a separate strategy for addressing government and education markets, plus separate strategies for the K-12, higher education and college bookstores.
Ingram Micro has relationships with 1,500 vendors, offers many of the same services as competitors and has had dedicated education teams in place for five years.
Education is a relationship-oriented market, said Bob Stegner, Ingram Micro's vice president of channel development. "Ingram Micro may be big, but we do a lot of segmentation. Resellers are not dealing with this huge company because it's all relationship."