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5 Ways Distribution Is Helping The IT Industry Navigate The Coronavirus Pandemic

Frank Vitagliano, CEO of the Global Technology Distribution Council, says in times of trouble distribution is the ‘gear box for the industry that keeps the global supply chain flowing.’

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Credit, Creative Financing

Distributors are helping partners through the near-term economic uncertainties with billions of dollars in new financing and creative programs that are helping tens of thousands of solution providers develop strategies to be successful during the crisis.

In fact, distributors have already been waiving fees and working individually with partners that are grappling with coronavirus issues, said Vitagliano.

“Distributor credit and creative financing underpins the entire IT supply chain ecosystem,” said Vitagliano. “The credit and financing distribution offers are sometimes overlooked because it is so fundamental to distribution. People expect it to be there, but if it wasn’t there it would be a major issue.”

Ingram Micro recently said that it is extending $110 million in additional credit to approximately 2,000 channel partners across North America through two new programs: KickStart Financing and Future Funds. In addition, the distributor is temporarily waiving any fees associated with the majority of its partner financing program. Ingram Micro said it is now offering exclusive terms to members of the Ingram Micro SMB Alliance and Trust X Alliance communities.

Ingram Micro’s new Future Funds program is offered with interest-only payments for six months and starting payments as low as 1.5 percent of the total purchase price. After six months, the customer is allowed to either pay off the balance or finance for an additional 12 to 60 months.

The financial strength of distribution powerhouses is critical in times like these, said Vitagliano.

“The distributors that are part of GTDC are multibillion-dollar companies,” he said. “The credit they extend to customers enables the IT ecosystem to operate. In a normal environment, it is really important. In a crisis like we are in now, it becomes paramount.”

Vitagliano said he has seen first-hand the benefit of credit in a crisis as both a vendor and solution provider. “I have seen how this works and how critical it is,” he said.

During the 2008 financial meltdown, Vitagliano said he saw distribution step up to provide additional capital and creative programs to help solution providers weather the storm. “Invariably the number one thing partners told me is they were having issues because customers were struggling,” he said. “That translated into customers asking for extended terms, discounts, reduced payment, canceling longer-term agreements and in some cases defaulting on payment.”

In the end, distributors worked in lockstep with partners to help them through the troubles, said Vitagliano. “What we saw then and what we are seeing now is distributors stepping up with extended terms,” he said. “Usually this comes in the form of working with partners one on one. Distributors know their solution providers. They understand what they do, how they do it and how they operate. As a result, they can build a unique credit offering that enables them to weather the storm and get through this.”

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