Distributors vs PCR Retail Advisory Board

The PCR Retail Advisory Board pitch their burning issues and tough questions against tech suppliers in this special Q&A feature.

How can a reseller best engage with a distributor to maximise their relationship and access market development funds (MDF)?
Vaughan Shayler, Channel Strategy Director, CompTIA

Giles Linwood, Commercial Director, Smithie UK: "In many cases the access to MDF is significantly harder than it ever has been. There are, of course, exceptions to this, however in general most established manufacturers have tightened the purse strings. Access to MDF is still possible. The best way is to work with a distributor to liaise with the manufacturer. 

Put a marketing proposal together with the distributor, who may also be able to assist with funding, and then ask the distributor to arrange a meeting to finalise the access. 

Remember that in general the manufacturer will not recommend one of their distributors over another, so it is best for the reseller to nominate a distributor first. 

That distributor should be someone that the retailer feels will see working with the manufacturer as important to them, and not just another member of their stable.”

Simon Buckingham, Marketing Manager, Hama: "To be honest, we offer marketing and merchandising as a service anyway, and this has been a major goal this year. In regards to funds, we will always analyze the ROI beforehand, and we will always see what we can do for our customers. 

Because we have such a wide range of products, and wide variety of retailers, everyone is treated the same in regards to service, but of course each customer is treated differently when looking at what is possible. 

Many factors will affect what can or cannot be done.”

Some distributors put vendors’ MDF funds on their bottom lines – what are your thoughts on this practice and do you think it should change?
Mike Barron, UK Channel Manager, Synaxon UK

Glen Rhodes, Overseas Purchasing Manager, A One Distribution: "I believe this is a poor strategy, and ultimately leads to harming the vendors’ perception in the market. We get a sizeable MDF from our exclusive UK brand Aerocool, and we use this to fund online and print campaigns, along with customer support and promotions, which has helped us to increase Aerocool’s market presence.”

Darren Perks, Sales Manager, Entatech: "Dependent on how the manufacturer works the MDF funding and targets, you will see this reflective in pricing. We see our marketing funds as an integral part of our growth, investing heavily into EntaLive, our exhibition roadshow, and trade events in order to get Entatech and our vendors in front of customers.

"There are distributors out there who are using MDF in their pricing structures – it’s not an ideal situation as marketing funds are there in order to develop relationships with customers, share new products and ideas, and communicate throughout the channels."

Mike Buley, Retail Director, Exertis: ”Our manufacturers don’t allow us to use our MDF in that way. We have a set structure on how we work with manufacturers which includes using our funds for mutually agreed activity, including promotion of new products and technologies to customers, training events and in-store services such as merchandising, demonstrations, promotional activity and actionable reporting.”

Steve Ling, Executive Director, Caseking: "Using MDF to fund price erosion in distribution is not good for the channel. MDF should be used to promote products to the end customer and pull demand back through the supply chain. Vendors should make sure their MDF is being used in the right way.”

Why must we have two or three or more account managers instead of just one?
Gavin Holder, Director, GHI Computers

Paul Turner, Sales Manager, Spire Technology: ”Although I do understand why this structure is utilised within some distributors, here at Spire Technology we pride ourselves on having one dedicated account manager to oversee all aspects for the customer. Backed up by efficient and knowledgeable teams, we believe this gives best focus and a high level of service.”

Mike Buley, Retail Director, Exertis: ”Specialist knowledge and technical excellence is at the heart of what we do. We therefore ensure our account managers are either focused on general sales, technical sales or mobile sales so they can do a better job for our customers and they get the specialist level of detail they need. 

However if a customer wants just one account manager, we can facilitate that also.”

What do you do to understand the SMB space better? How often do you conduct reviews with service providers and retailers?
Vaughan Shayler, Channel Strategy Director, CompTIA

Darren Perks, Sales Manager, Entatech: ”Entatech works closely with the channel to get in front of customers – whether through events, internal marketing or third-party advertising – to see what it is they want from us as a distributor.

Wherever possible we try to employ staff with channel experience. In June 2013 we opened a new Southern office, with the majority of staff having 15-plus years of industry experience. This has proved to be incredibly successful for us.”

Mike Buley, Retail Director, Exertis: ”We are constantly engaging with our customers with regular calls, meetings and QBRs. We’re aware we need to understand our customers’ challenges and requirements in order to do a better job to help them maximise their promotional periods and profitability.”

Sometimes retailers might choose distribution over the option of direct accounts – why?
Will Fletcher, Technology Buyer, Toys ‘R’ Us

Darren Perks, Sales Manager, Entatech: ”It is simple – it’s the support that we can offer to our customers. Distribution’s biggest plus is that it also offers economies of scale in terms of the handling of the business relationship, warehousing and logistics.”

Alex Croft, Commercial Director, Exertis: ”Our retail customers will often choose to work with us as a result of a particular value-add service that we are able to offer, or because of some particular expertise that we contribute. This is often related to a product, a category or a specific piece of promotional support – or sometimes all three.”

Why can’t your websites have tailored prices?
Gavin Holder, Director, GHI Computers

Simon Buckingham, Marketing Manager, Hama: ”There is always a possibility of upsetting other customers if we were to have different pricing structures for different customers. We have a fair approach with all our retailers, sometimes we do look to help with promotional opportunities to create a point of difference within each retailer, and again this is done in a fair and efficient way.”

Mike Buley, Retail Director, Exertis: ”Our website can have bespoke pricing. If our customer wants to move this forward they can talk to their account manager today.”

Giles Linwood, Commercial Director, Smithie UK: ”They can. Here at Smithie UK we are working on delivering this for our customers, and I’m sure that other distributors are looking at the same.”

Is it always better to add more products to your portfolio?
Will Fletcher, Technology Buyer, Toys ‘R’ Us

Steve Ling, Executive Director, Caseking: ”No. New products should add something to your product range and this should be communicated to your customers. If you have too many products competing in the same space, you will confuse customers and lose your focus as a business.”

Paul Turner, Sales Manager, Spire Technology: ”Only if they are needed. It’s about finding a good balance in each product category, as too many products can cause confusion both for the distributor and the reseller. Resellers need to be given clear choice and information before deciding on their purchases. We have added several vendors this year to bolster relevant product categories and will announce more by the end of the year.”

Glen Rhodes, Overseas Purchasing Manager, A One Distribution: ”We have always had the belief that all products have a lifespan, and that to keep things fresh new products should be introduced each year. Having said that, there are some products that have been around for a long time, which is usually an indication that the vendor has got the product spot on. We regularly introduce new products into our CiT, Ace and Powercool brands in order to satisfy the demands of the market and effectively supply product to customers based on the current buying trends, but there are older products like our CiT Vantage case that are still popular with the retail and SI market, and continue to be very good sellers for us.”

What would you say are the top qualities that separate an everyday retailer from a super successful one?
Craig Hume, Director, Utopia Computers

Glen Rhodes, Overseas Purchasing Manager, A One Distribution: ”I’d say the main factor would be listening to your customers’ requirements and working closely with them on product solutions. 

Customer feedback has always been very important to us, and we’re happy to say that we have a large set of loyal customers whom we have worked closely with over the years. 

We have the advantage of having almost 25 years’ worth of experience importing products for our brands, which enables us to source solutions tailored to our customers specific needs. 

Of course, having a stable and reliable set of staff is also key – there’s nothing worse than your account manager changing once you’ve built up a rapport with them.”

Simon Buckingham, Marketing Manager, Hama: ”Service is more important than ever these days. Online can provide its own services and ways to attract attention, but in-store you have a face-to-face interaction with a limited amount of time to engage with your customer, as well aiming to convert them to a sale before they leave the store. Communication within store has to be top notch, and that includes POS communication to encourage the customer to engage. 

Personally, I dislike going into a store where I cannot find what I want without having to ask someone. I want to see the brand names and have products looking clean and apparent – this is where in-store communication is essential to ensure I do not walk out frustrated. If necessary I would ask someone for additional advice, and nine times out of ten you do get an assistant asking if you need help anyway, which of course is always a good thing.”

What is the split between traditional telesales and online sales to resellers? How do you see this changing in the future?
Steve Ling, Executive Director, Overclockers UK

Darren Perks, Sales Manager, Entatech: ”70 per cent of our business is generated directly from our sales people, while online sales from www.entaonline.com and electronic integration account for the other 30 per cent. We utilise a number of electronic communication means in which to support our sales department, resellers and vendors collectively.

“We have opted to implement a dual strategy of investment in both areas of sales, to ensure that our reseller base has the option and flexibility to use our electronic side.”

Giles Linwood, Commercial Director, Smithie UK: ”From our experience, most resellers now see anything between 20 per cent and 100 per cent of their sales electronically. As this percentage of their business has increased, most resellers have also taken steps to trade electronically with distribution. There is an almost daily increase in the number of direct drops to consumer addresses, meaning that more often the reseller doesn’t even touch the actual product. We’re certain that this approach will only continue to gather momentum.”

Alex Croft, Commercial Director, Exertis: ”However the customer chooses to engage and interact with us will drive how we serve them. Increasingly savvy customers who want 24/7 access and a personalised offer will influence the ways that we develop how we sell. That said, the instant personal service, understanding and value that can be offered on a telephone call should not be underestimated.”