People or portals: what do resellers want from disties?

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This article appeared in the February 2016 issue of CRN magazine.

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People or portals: what do resellers want from disties?
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E-commerce portals are not new in the world of IT distribution. Ingram Micro’s TechLink opened its doors to all resellers in 2006. While much channel business is still done over the phone, e-commerce has seen a renewed focus with the move to cloud computing and the attempt by many distributors to carve out a piece of the action.

With so much business now being done remotely, virtually and through automated ordering, where does that leave that cornerstone of sales – personal relationships?

Products that used to be bought physically, such as servers or storage, are now more commonly bought as online instances hosted in a remote data centre. The distie is no longer under pressure to shift floor stock to maintain sales volume, which means less incentive to go and negotiate with the reseller. 

Resellers also have less bargaining power because cloud computing is typically consumed at fixed rates. There is some discounting for volume, but there’s not much benefit for loyalty. 

Is the shift to cloud computing going to keep pushing channel business toward e-commerce, perhaps diluting the value of relationships? CRN spoke to resellers to find how often they were using e-commerce portals – both for traditional online ordering of product and the newfangled cloud marketplaces – and asked whether good, old-fashioned customer service was on the way out.

Easy and automated 

Darryl McAllister, managing director of Sydney-based NetCare IT, orders more than 90 percent of products he resells through e-commerce portals run by Dicker Data, Synnex and Ingram Micro. “Their portals work really well,” he says. “We use them all day, every day. We don’t use the phone much unless we’re going for special pricing or it’s a larger bid. We’re very strong users of their online tools.”

The advantages of online ordering are fast access to accurate pricing. McAllister uses a tool called IT Quoter, part of the ConnectWise ecosystem, which pulls in feeds from each of the disties so the reseller can check on inventory, stock and pricing. NetCare IT uses it to prepare quotes for customers, but makes the final order through the online portal. “We have a very narrow, standardised product set that we provide to clients. We’re ordering the same HP UPS and servers. We just know those products."

But do these faceless interactions with a distie through online channels degrade the relationship?

“It improves it” McAllister says. “The fact they’re giving us the tools to prepare quotes is a bonus. We can get quotes out the door in five minutes,.”

NetCare IT has set up a highly efficient process around the three major disties that takes advantage of the speed of online transacting. If the reseller places an order with Dicker in the morning, the distie will ship the products from its warehouses in Kurnell to the client or to NetCare IT in Norwest Business Park by the afternoon. “Dicker ships to the client, sends us an invoice via email, we send it to the client and it’s done. It’s a really slick process,” McAllister says. 

All the major disties have reasonably equal online solutions, McAllister adds. “Most of our business is with Ingram and Dicker, third is Synnex. You don’t need to look outside those major disties, really.”

For those 10 percent of Netcare’s orders that are larger or more complex, a phone call is required. Human interaction is essential to getting the right price. “Nothing beats the phone, absolutely,” McAllister says. 

The personal touch

At least seven distributors added cloud computing services to their e-commerce efforts last year, including Westcon, Ingram Micro, Dicker Data, Distribution Central and Avnet. The increase in online-only products will inevitably shift more interactions to the e-commerce portal.

One of the few major disties that didn’t make a big cloud portal announcement in 2015 was Synnex, which is hailed as the classic high-volume, low-margin mainstream distributor. While the company did relaunch its e-commerce portal in 2014 and it is understood a cloud announcement is imminent, Synnex has been investing in the opposite of automation – personal relationships.

Synnex “has been in relationship-building mode”, says Angus Mansfield, sales director of Sydney managed services provider XCentral. The company has increasingly shifted business to the distie. In the past couple of years, Synnex has moved away from its heritage as a low-touch components specialist and tried hard to shake its old image, Mansfield adds. 

“We met Ahmmad [Issa, Synnex commercial sales manager] at a CRN Fast50 event and from that point on they tried really hard to engage with us, more than the other disties,” Mansfield says. “They won a fair chunk of our business as a result. “

XCentral still prefers the online portal for transactional items but relies heavily on the distie for advice on more consultative sales such as licensing and software. “The perfect position for the distie is to have the systems behind them and the right people in front. Some of the other disties have the systems but Synnex have the people.”

While the quality of relationships has made the difference in winning his business, Mansfield says it’s important to strike the right balance. “The risk you run on the relationship side of the business is if those people leave, you put the efficiencies you’ve built at risk.”

Good relationships have a real dollar value in the channel. One critical aspect of sales is to maintain momentum. A good distie that gives a reseller quick answers can make the difference between winning and losing a deal. “When we email or ring through we don’t feel like we’ve joined a queue,” Mansfield says. “We have great relationships with all our disties. But you do look for hunger and a real eagerness to do business."

Next: Getting a better deal

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