D&H Ups Partner Credit Lines To Commemorate Its 105th Anniversary
‘The 105 percent (credit) is a big deal because we do see this as a critical need with the banking challenges, with the cost of money and working capital,’ says D&H Co President Dan Schwab. ‘We realize that we have to lean in with our partners to help them expand their business.’
D&H Distributing is celebrating its 105th anniversary by helping put more cash in partners’ pockets by increasing to 105 percent the credit lines for its solution provider customers.
If that isn’t enough to get the party started, the distributor is also providing an additional $350 million more in monthly credit extensions to partners.
The additional credit terms impact more than 10,000 commercial partners even as the channel is seeing the impact of tightening economic conditions with higher interest rates.
“The 105 percent (credit) is a big deal because we do see this as a critical need with the banking challenges, with the cost of money and working capital,” said D&H Co President Dan Schwab. “We realize that we have to lean in with our partners to help them expand their business. If we’re going to try to help them grow and move upstream and sell more advanced solutions they need more credit.”
Schwab said the 105 percent credit terms also represent the power of the unique D&H employee ownership model, which results in D&H co-owners giving 105 percent each and every day to help partners be successful.
“People care that much more at D&H,” said Schwab . “We have much less turnover. We have people that are invested in the success of our partners and our vendors. They realize that if they invest in customer and vendor success – like what we are doing with the increased credit lines- we in turn will become successful long term.”
Even as tech companies lay off employees and engage in belt-tightening, Schwab said D&H – like it did 15 years ago during the 2008-2009 Great Recession- is focusing on how to help partners be successful. “We look at the economic headwinds and say this too shall pass and focus on how do we invest in the channel for long-term success,” he said.
One of those big channel investments in honor of the company’s 105th anniversary is a significant investment in a new AIM (Assess, Implement, Manage) framework to help partners migrate to the MSP recurring revenue services model.
Schwab, for his part called the new framework a proactive “game changer” that amounts to D&H rolling up its sleeves to help partners one at a time to make the paradigm shift to the MSP model.
“It’s a new framework that makes it easy for the partners to identify and attach services to their hardware and software,” said Schwab. “It completely changes the sales process. It is really a question of how they migrate to the MSP model. They have multiple options on how they can execute and we help them with those decision trees they can go through so they can be successful.”
D&H Co-President Michael Schwab said the AIM framework is all about partners committing to a “different mindset” in terms of billing cycles, revenue recognition and sales force compensation. “Partners need to embrace this as a future opportunity,” he said. “You don’t want to be stuck in the past!”
Another sign of D&H’s drive to help partners move to recurring revenue services is the addition of 30 percent more staff to D&H’s dedicated Cisco and Hewlett Packard Enterprise teams, said Dan Schwab.
“This is a major investment because we see the opportunity for us to help enable our partners to evolve as Cisco and HPE evolve,” said Schwab. “As Cisco and HPE migrate to more cloud, service based and recurring revenue it is a transition for our partners. So we needed more resources for both of these vendors to help our partners to be proactive.”
D&H partners, for their part, said they see all of the new investments particularly the new credit terms as critical to helping fuel their growth.
“The additional credit, the credit extensions and the partnership programs D&H provides are all extremely beneficial, they allow us to continue our growth,” said Catherine Shoop, executive vice president of finance for Vivacity Tech PBC, an education solution provider in St. Paul, Minn. that serves over 2,000 school districts throughout the United States. “It allows us to support the growth we need and to be able to deliver to our customers.”
Another key D&H program that has helped fuel Vivacity Tech PBC’s growth is an “Assignment of Credit Extension” (formerly known as Assignment of Funds which assists partners on large deals with government and educational institutions, said Shoop. “That provides us exponential borrowing capacity when we have a direct customer commitment,” said Shoop. “That program is really, really strong. We have benefitted so much from it with really great communication and quick turnaround from D&H.”
Michael Haley, co- founder and president of Edge Solutions, Atlanta, Ga, No. 129 on the 2022 CRN Fast Growth 150 list, called the 105 percent credit line and the $350 million more in monthly credit extensions to partners a “testament” to D&H’s commitment to the channel.
Edge Solutions developed a partnership with D&H after a single conversation with D&H Director of Credit and Financial Services Matt Riley, said Haley.
“I immediately knew we could do business with D&H because I knew they would provide whatever credit we needed whether it was through standard terms or other credit tools,” he said. “I knew we could grow our business substantially with D&H knowing their credit organization had our back. We have experienced a lot of growth with D&H. Credit capacity is very important especially in these times.”
Haley said he and his company have developed strong bonds with the D&H executive team and employees. “We like the culture of the organization and the people in it,” he said. “We feel unbelievably valued by them. I know they wake up every morning thinking what can we do to help Edge Solutions grow their business. I feel like I have 50 new personal close friends by starting to do business with D&H.”
Haley said he sees the “family and employee owned” culture at D&H as a major competitive advantage. “The smaller resellers need someone like D&H that has their back from a credit perspective,” he said. “Everyone would like to do a $1 billion in sales. The strength of D&H is looking out for the rest of the partners.”
D&H Distributing’s 105-year-old family and employee-owned legacy and its culture of going above and beyond with a “trusted” and “personal” relationship with partners sets it apart from other distributors, said Kyle Jolly, vice president of operations for CCB Technology, No. 374 on the CRN SP500 and a CRN Tech Elite 250 company.
“That family-owned dynamic has empowered the people within the organization to make decisions without having to run it up the chain of command for every little thing,” he said. “It is plain and simple: D&H delivers when we need them to deliver. D&H always has our back.”
When CCB lost profitability on a deal in the wake of a channel conflict issue, D&H stepped in to resolve the issue in CCB’s favor, even though D&H was not involved in the initial deal, said Jolly. “It was unbelievable,” he said. “I have been with CCB for almost 16 years. I have never seen a response like that from a distributor or any other partner. That is an example of who D&H is to us. That happened because D&H is employee owned company with a stake in the business. That is the kind of behavior that creates loyalty.”
Teaming with D&H has led to a dramatic increase in profits on CCB’s Microsoft cloud services business by teaming with D&H for services support, said Jolly. “Leveraging the partnership with D&H has taken what was a really big hit profitability wise and put profits back into the mix,” he said. “It’s substantial. That is huge.”
In the last several years, CCB has moved the majority of its distribution business to D&H because of the strong personal relationships and the level of “support and engagement” provided by the distributor, said Jolly. “D&H is our preferred partner,” he said. “For us if D&H has availability or have the product we are looking for they are our go to provider. That has turned into substantial growth in business with them year over year.”
Jolly said he is excited about working with the D&H team to continue to grow the CCB Technology business including looking at leveraging the power of D&H to help power Microsoft Azure sales. “That could be huge for us,” he said. “We expect to continue to see continued growth in our relationship with them.”