Daisytek Seeks Larger Share of VAR Segment

"We would love to do more and more business with VARs," says 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 the one offered by broadline distributors.

Daisytek proposes 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 merchandise their Web sites. "Anything we can do to help [customers grow, we are committed to doing," Powell says.

So far, that commitment is working because Daisytek's sales have been climbing steadily. 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, Powell says. If VARs aren't including supplies, accessories and office products in their proposals, they're missing out on sales, he says.

The 2003 edition of the VAR 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 market-share 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 [VARs the opportunity to add real value, not only with up-to-date information, but also with the means to communicate to their customers," says Craig Higgs, senior vice president of marketing at Daisytek U.S.

But Daisytek didn't end its push to attract more VARs with online tools. The distributor plans to beef up its drop-shipment requests,currently 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, Tenn. distribution facility will be completed by Dec. 1.

Michael Cruz is a freelance writer specializing in distribution issues. He can be reached at [email protected].