With tablets, smartphones and smaller notebooks still incredibly popular, the need for physical computer hardware is as strong as ever.
And as we enter the age of the Internet of Things and the ‘smart home’, there are even more connected and wearable tech devices on the way. As demand for these types of products and services increases, so too does the need for a decent distributor and an effective supply chain.
This will put an increased strain on suppliers, who already face the difficulty of maintaining a successful product portfolio, marketing effectively and, perhaps most importantly, keeping their customers happy.
Pricing is still clearly an issue with resellers. Just months after PCR reported on the grey market for unofficially sourced computing goods, where some resellers admitted they only use it to save money, many independents remain frustrated at larger etailers selling products below cost or distributors changing prices on the fly.
‘Low’ stock levels and ‘poor’ customer service are also bugbears for tech resellers when dealing with suppliers, with one quarter again urging distributors to strengthen ties with their customers and ask for more feedback to improve how they run their business.
But it’s not all bad news. Almost 80 per cent of resellers describe their distribution partners as helpful, with half applauding suppliers for having solid stock levels, effective customer support and product knowledge.
In summary, distributors are doing a pretty good job. But as many of our survey respondents show, there is still clearly room for improvement; this feature aims to show exactly what suppliers do well – and what they could do better.
WHAT IS THE MAIN BENEFIT OF HAVING DISTRIBUTION PARTNERS?
Unsurprisingly, almost a third of resellers questioned by PCR say that sourcing a wide variety of stock is the main reason they have an account with a distributor.
16 per cent of retailers say that support is the greatest benefit, whether it is speaking face-to-face or voicing concerns over the phone, while having a ‘good account manager’ is also incredibly important.
A further 14 per cent say that advice, analysis, expert knowledge and trend tracking is the main reason why they use distributors; eight per cent cite quick and reliable delivery; another eight per cent say pricing and offers are of utmost importance.
Other answers include strong vendor relations, loyalty and trust, and having a single point of contact.
Interestingly, almost one in ten resellers say there is no benefit. One business owner tells PCR: “You have to work with them – you have no choice.”
WHAT FRUSTRATES YOU THE MOST ABOUT DISTRIBUTORS?
The results are clear – resellers find ‘unfair’ pricing and low stock levels the most frustrating thing about working with distributors.
A quarter (27 per cent) say that things such as high, ‘non-competitive’ or fluctuating pricing, having to go elsewhere to find cheaper deals and price disparity between etailers and indies are most annoying.
One reseller tells PCR: “When distie prices are too high and other big retailers sell at a loss, this means we can’t compete with them. Sometimes we can buy goods cheaper on Ebay.” Others blame the manufacturers: “Vendors should wake up, smell the coffee and stop playing about with prices for God’s sake – let’s all start making margins.”
Low stock levels and out-of-stock goods frustrate 16 per cent of resellers the most, while poor customer service is the central ire of one in ten of those surveyed.
Account managers with a lack of knowledge, slow deliveries and being sold new product lines over the phone were also mentioned.
A couple of resellers also say that ‘distributors going bust’ is their main concern.
IF YOU WERE IN CHARGE OF YOUR DISTRIBUTOR FOR A DAY, WHAT WOULD YOU DO?
Interestingly, more resellers say they would rather improve customer relations than cut prices if they were in charge of their main distribution partner for a day.
One quarter of respondents (26.67 per cent) say they would strengthen ties with their customers and ask for more feedback to improve the distribution business.
Dropping prices is the second most popular suggestion (14.29 per cent), with ‘no idea’ as the third most common answer (13.3 per cent) and ‘reviewing the portfolio’ being the plan for 8.57 per cent of resellers.
A small handful of respondents provided more lighthearted plans of attack, including “driving the boss’ Ferrari”, “giving myself a pay rise” and “picking a customer out of the hat and letting them have an order for free”.
Here are PCR’s picks of the most interesting and more serious suggestions for distributor management to take on board:
“I would improve customer relationships, ring around, get in touch with retailers and improve communication. I would call up retailers and ask what we can do better. Speaking to and visiting more customers face-to-face would let suppliers know what resellers really need.”
“The first thing I’d do is send all of the sales team members on training to improve their customer understanding, technical knowhow and awareness of products.”
“I’d have a word with the sales staff and advise them to look at the long term rather than just hitting targets and getting commission in the short term.”
“I would ask the manufacturers to look at their prices in order to help indies out. Perhaps charge more to bigger online retailers, provide free shipping or find other ways of making pricing more consistent and fair.”
“Create a loyalty scheme with a focus on increasing business.”
“Tighten up distribution. Make deliveries and returns better, improve logistics and make sure customers get products on time.”
“I’d make the company more open to trading with smaller businesses. Hire a better purchase manager and install better systems with quicker product information.”
“I’d be honest.”
“Improve the website as ringing around is too time consuming. I would also set prices on the website as the actual price, and install a much clearer pricing structure.”
“I’d make organisational changes – cut the sales team, reduce the management team and make staff more available to actually talk to their customers.”
“I’d look at how the business works and maybe start one myself.”
HOW HELPFUL IS YOUR MAIN DISTRIBUTION PARTNER?
Good news for tech and computing distributors – according to our survey the large majority of resellers (79 per cent) say their distributor is helpful.
A third state their distributor is very helpful, while a half describe their supplier as ‘somewhat helpful’. Just seven per cent say they aren’t very helpful, while 14 per cent aren’t sure if they are supportive or not.
Several resellers state that reliable advice, trend tracking and speed of supply are all reasons they find their distributors helpful. Credit facilities, support and product knowledge were also all mentioned as reasons.
Target Components’ business advisor online forum was name-dropped by a few resellers in particular.
WHAT WOULD YOU LIKE TO SEE MORE OF FROM DISTRIBUTORS?
The answers to this question are largely in line with what resellers told us in the other sections. Fairer pricing is top of their demands (23 per cent), while better stock availability (17 per cent) and communication (eight per cent) are the second and third most wanted.
More than five per cent of resellers want distributors to improve their product knowledge and levels of service and support, as well as boost their marketing initiatives and offer more deals to customers.
A handful of resellers say they want the option to deal with just one account manager, as opposed to having several separate contacts.
One passionate retailer tells PCR: “All of the big distributors operate this way. Until recently I had more than one account manager at a big distributor, which made it difficult for me to place a single order as I had to make several calls. I’m sure many others will have the same problem. I know other disties do it too – again I had to specifically request one account manager with them.”
Other suggestions from resellers include increasing the speed of products to market, better employee retention, improved websites, more responsibility with returned stock, better credit terms, and two resellers simply ask for one thing – “honesty”.
HOW WE DID IT
PCR contacted more than 100 UK tech retailers and resellers to take part in the survey anonymously. All questions were open-ended, except for ‘How helpful is your main distribution partner?’ where respondents were asked to rate their distributor on a scale of one to five, representing the following: Not at all, not very, not sure, somewhat or very.