Courting the channel: Going native
15 May 2014 | 0
It’s eight years since UK distributor Westcoast took a giant leap into the Irish market with the acquisition of Clarity Distribution but the company’s Irish boss David Dunne doesn’t want people to think that what made Clarity successful has been swept away in the intervening years. He describes Clarity as “the DNA of Westcoast Ireland”.
The UK parent reported turnover of £1.3bn last year and employs more than 600 people. It concentrates on five major vendors: HP, Apple, Toshiba, Samsung and Microsoft. The Irish business distributes four of those major brands (not Apple), employs 30 people in Dublin and has a 41,000 square foot warehouse facility. Westcoast Ireland deals with around 270 resellers on a monthly basis, although it has nearly 600 on its books.
Dunne says that bringing together Clarity’s enterprise distribution strengths with Westcoast’s volume “has given us a good story to tell the reseller community”. Along with other distributors, the company offers credit and holds stock, but he argues it is “trying to do a little bit more” with five product specialists that “can add value to our reseller community and help them win more business”.
With margins under fierce pressure and smaller distributors not having the same overhead as Westcoast, the company “has to turn our presence into a value rather than a millstone. One of the key strategies is to push our people out into the field to meet resellers and understand what they need. Some are more technical and want marketing support and some are more marketing based and want technical support”.
He admits that it is “hard to make distribution sound sexy and dynamic when we are servicing so many resellers but the key factor is to become more flexible because a lot of vendors are becoming less flexible in terms of how their processes work, so we’re trying to be the middle person to buffer the reseller”.
Credit is an area where this has become particularly noticeable. Dunne says Westcoast’s Credit Limit Accelerator (CLA) programme, which helps businesses start with a small monthly credit limit of EUR*5,000 paid by direct debit that can increase to as much as €50,000 over an eight-month period, has helped nearly 50 new resellers.
Another example of what he dubs the distributor’s “out of the box thinking” is the way it helps small resellers with large customers (which is fairly common in Ireland) to trade beyond their credit limit for large deals, while keeping the normal limit for other deals in the month. “We ring fence the deal and leave their day-to-day credit limit,” he reveals. This helps smaller partners keep larger resellers out of a relationship that they have already built up. “We’ve done that two or three times now and it’s been very successful. I can’t see any downside to the reseller. The key is the financial stability of the user and if it’s a large multinational, there’s no issue.”
Because the banks “aren’t stepping up to the mark”, it’s up to the likes of Westcoast to plug the gap. The increased awareness of how important credit is in a constrained market also ensures that resellers are more professional. “They can’t afford to burn bridges with the people offering credit,” Dunne observes. “It’s hard to get, so when they do get it, there’s a little bit more willingness to work with the provider.”