“The requirement from the distributor in these cases will differ in many aspects,” he observes. “For example, the distributor might focus on providing good logistics and finance facilities to its resellers for larger more established vendors that offer many services directly. However, the distributor might focus more on building market awareness, education and direct touch with its resellers for a new up and coming vendor.”
In other words, the value or service varies from vendor to vendor and the ‘fullness’ of that service varies accordingly. So one distributor might provide many of what many would describe as standard services for its vendors but those vendors are likely to view it as the full service that they require. If they need something more, they’ll go to another distributor with a different service proposition. In other words, there is a role for different types of distributors.
Michael Conway, director at Renaissance, believes there is room for FSDs and traditional logistics type distributors, although he thinks the latter are merging and reducing in number. “We’re almost getting to the point of a great divide where fewer, large big distribution organisations will be logistics houses and if the channel partner knows what to buy and knows the SKU, the logistics house type distributor has a significant role to play.”
There are certain products that don’t require much, if any, service attached to them at all apart from price and availability. “If you want to buy Microsoft Office or an HP OfficeJet, you just need to find the price and availability. You may compromise on price for availability or vice versa, but you can order it by lunchtime today and have it by lunchtime tomorrow without any human intervention.”
As ‘inside sales’ teams forge direct vendor to customer links, the traditional distribution processes of transport, stockholding and logistics are seen as basic services, offering little in the way of value add” – Gerry Harvey, Commtech
But he also asks a pertinent question about the role performed by the logistics distributors. “What’s the difference between DHL and some of the larger distribution companies? It’s just track and trace, some of them work very much in tandem with each other.” He claims some distributors don’t even know what the product is that’s being ordered, all they need to know is if it’s the right SKU. This can be taken to the extreme where a reseller that doesn’t have the SKU for the product can’t place an order.
That’s very different from the FSD model. Conway describes that as a process where the reseller “needs to understand what the product is, what’s appropriate, how to implement it, and there’s a requirement for pre-sales support and post-sales support, and it’s not just ringing up someone with a headset on.” He describes the FSD as “somebody you’re phoning up and you’re describing the nature of what you’re looking for and there’s some conversation and discussion”.
O’Hara at Data Solutions argues that one of the most important points FSDs need to bear in mind is that while resellers vary in size, skills and focus, the common thread they share is that they have a strong relationship with their customers. “There is a bond and a trust that resellers have built up over the years from providing good advice, technologies and service at competitive prices to their customers. FSD provision to resellers should take this into account and offer specific services required by each partner to maximise results.”
This means understanding that services “can vary from case to case”. In one instance, the distributor might need to provide technical and sales training for all relevant staff, in another it might have to build user workshops around the technologies the reseller can offer to its customer base and carry out joint user meetings with resellers to position the technology.
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