Third-party distribution is thriving in the office technology industry. Here’s why.
As mailing, shipping, and warehousing costs soar, the need for alternative methods of distribution has become paramount in the dealer community, especially for those offering MPS programs or working with multiple vendors. It’s an issue that many hardware OEMs are well aware of and, as a result, are moving to a managed distribution model where third parties warehouse and ship their products directly to a dealer’s customers. The benefit to the dealer who uses these third-party distributors is that products from multiple vendors can be combined in one shipment, saving money and positively impacting the dealer’s bottom line.
But what makes a quality distribution partner? We asked six dealers for their thoughts on the topic, and not surprisingly, there was a fair amount of consensus.
Six Distribution Partner Qualities
Andrew Ritschel, president of Electronic Office Systems (EOS) in Fairfield, New Jersey, offered six qualities of a quality distribution partner:
- They have a wide variety of products.
- They offer competitive pricing.
- They have a ‘live’ person answering the phone when you need customer service, never voicemail.
- Accuracy and fulfillment of orders.
- Fast processing with blind drop shipping.
- An organizational personal experience as opposed to a people personal experience.
Ritschel elaborated on No. 6: “It’s not like you’re developing personal relationships with people there, whether it be management or the individual reps. You’ve grown a relationship with the organization because the whole organization operates in sync.”
Ritschel uses Distribution Management and TD SYNNEX, and both of those companies check all of his boxes. “If these things do not fit in any area, we don’t work with the company. We’ve tried other companies, and if one of these things is missing, we remove them as a choice.”
The Obvious Distribution Partner Quality: Drop Shipping
Gordon Flesch Company uses Distribution Management. “We have a great relationship and have grown a lot with them,” said Patrick Flesch, president of Gordon Flesch Company. “They’ve helped us tremendously with drop shipping of A4 Lexmark products, supplies, and parts.”
The dealership also partners with TD SYNNEX, which serves more as a secondary option. This gives Gordon Flesch Company flexibility when it needs access to a certain product line that its other distribution partner might not have.
For Jim George, president of Donnellon McCarthy Enterprises in Cincinnati, Ohio, the quality he most appreciates of his distribution partner, TD SYNNEX, is the ability to ship products almost anywhere. “They pretty much cover every ZIP code in the United States,” he said. “They’re also a global organization. We have clients in other countries, and that’s helped us big time. If we have an MPS deal, we can do it outside of the U.S. as well, utilizing them. That’s not always the case with manufacturers on the copier side.”
For Barry Simon, president of Datamax in Little Rock, Arkansas, it’s not all that different from why other dealers partner with a distributor like Distribution Management. It may sound obvious, and is starting to sound repetitive, but it’s the drop shipping to Datamax’s customers. He also appreciates the variety of products available, the various dealer programs, and of course, the incentives. That said, he would like to see them stock more products. “It seems like they’re just not stocking as much as we think they should,” observed Simon.
Communication and Relationship Building are Critical
For most dealers, including Troy Olson, chief business development officer, Les Olson Company, communication is the quality that rates above all others. “Communication, as always, is key in what we all do,” he said. “We have to communicate together.” That means constant meetings and an open line of communication, which is especially critical for meeting goals. “Don’t come to me at the end of a quarter and say, ‘We’re off by a million bucks,’ when we think we’re meeting our number, and then there is no time to make it up,” said Olson.
Sharp is a big advocate of managed distribution and works closely with Distribution Management and TD SYNNEX. One of the challenges Sharp dealers experienced when Sharp moved to Tech Data (which was later acquired by SYNNEX) was issues with Sharp’s portal as it transitioned to Tech Data’s portal where the data between the OEM and the distributor didn’t always match. For example, the distributor’s portal would show that a specific A3 model was not available in the U.S., but in reality, it was. Since then, things have improved dramatically, according to Olson. “Sharp has been amazing to work through it,” he said. “But constant communication puts us at ease knowing we will work through it and get product.”
According to Simon, the quality of communication between Datamax and Distribution Management is an asset. “They’re pretty good about giving us [data] about what we’ve done and where we’re at, and that helps when we are trying to project for the future,” said Simon.
As with any partnership, the relationship between dealer and distributor is critical. However, those relationships aren’t established overnight. “There’s a lot of familiarity,” said Flesch. “Our processes internally are unique to GFC and, in some matters, very complex. In those cases, Distribution Management has been willing to work with us and figure out how they can adjust what they do on their side to fit our processes, fit our workflows, fit our documentation requirements, and ultimately get product where it needs to go in a timely manner.”
The Bottom Line
The significance of third-party distribution partners has become increasingly important for dealers managing MPS programs or dealing with multiple vendors. The advantages are clear: cost efficiency, streamlined shipments, and for some dealers, global reach. Moreover, effective communication and the ability to understand the dealer’s business, along with building long-term relationships, are equally important. Although many of these qualities are essential for any business partnership, they certainly stand out with a distribution partner. Top of Form
A Distributor’ Partner’s Perspective
Sarah Custer, vice president of sales operations, has spent more than 20 years with Distribution Management, going back to the not-so-distant days when it was known as Supplies Network. She may be biased, but she has strong opinions about the benefits Distribution Management provides to dealers and vendors alike.
“One huge benefit of Distribution Management is that we are focused on print,” she said. “Everything we do is around either hardware or supplies or parts, or managed print programs and services and things that serve print. We really are experts in print.”
The company also has subject matter experts and account managers assigned to every account. “We also have additional layers of support depending on the partner,” explained Custer. “We have business development managers, regional managers, equipment advisors, and MPS advisors working in a team selling environment, where a dealer can reach out to us, and we can help guide them to the right resource.”
Custer also highlighted the company’s level of integrations and automation. “It’s my understanding from talking with software partners that we are one of the most integrated and connected distributors,” she said. “We work with the majority of the ERP systems to help with order flows to our customers and have many services and things that can be connected to that through our managed print program where dealers don’t have to do double entry or manually deal with sending POs or receiving invoicing.”
Distribution Management also has strong manufacturer program participation. “Obviously, a distributor has to work with all of the manufacturers that a dealer is leveraging in their portfolio, and the more they work with, the better for that dealer,” observed Custer. “The more you can aggregate your shipments, the better.”
Over the past year, Distribution Management has done an excellent job of diversifying its offerings. After being rooted in A4, it is now working with more of the A3 OEMs, allowing dealers to ship an HP toner cartridge along with ones by Sharp or Konica Minolta. Meanwhile, it is looking at other logical adjacencies in print that would make sense for its customers such as its recent expansion into thermal label printers.
Diversifying with the Help of Your Distribution Partner
TD SYNNEX has worked with BTA dealers for 20-plus years, supplying them with print and imaging solutions, a core product segment for the distributor. But like the OEMs and progressive dealers, TD SYNNEX is expanding its offerings and helping dealers diversify, which is an essential quality for a distribution partner today. As TD SYNNEX’s Desiree Cruz, senior director of product management, print, told me in an interview in our November 2023 issue, “We are helping partners capitalize on more than just print imaging. There’s so much out there that are either adjacent markets where dealers could be successful or product categories that they sell today.”
As Cruz pointed out, think of a traditional office product or technology dealer with customers in the education market or who supplies furniture for a business’s conference rooms. Why not also sell AV equipment or provide IT products for those customers? TD SYNNEX has those products to help dealers expand their offerings. Equally important, it can also provide the necessary skillsets to break down barriers to entry into new and emerging product categories. “We have those resources and an infrastructure to help them overcome those hurdles,” said Cruz. “We’re always looking at how we can best educate and find tools and services to enable our partners’ success.”
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