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The long-awaited convergence of CE and IT products and services, promulgated by the recent introduction of home entertainment platforms by PC stalwarts Hewlett-Packard and Dell, has placed distributors in a pivotal new role, given their ability to bridge the dealer, installer and reseller worlds.
As Dan Schwab, VP/marketing at D&H Distributing noted, “CE dealers are accustomed to purchasing direct, and they like it that way. Yet the majority of IT-oriented convergence products are only offered through the distribution channel. This means that CE dealers are going to have to embrace distribution to acquire products like entertainment PCs, gaming systems and home networking devices from industry leaders like HP, Intel, Microsoft and Linksys. Our role in accommodating this paradigm shift is to show CE dealers the value of a distribution partner.”
According to Schwab, CE vendors are beginning to realize that the most efficient way to serve the channel is to utilize distribution. “Many CE vendors have begun to eliminate much of the direct-to-dealer programs and are now running more revenue through distribution,” he said.
“They are finding that it is more cost effective, and in most cases the dealers get better service levels.”
IT resellers have long used their distributor as a resource not only for wholesale-priced product but for valuable programs that help them increase profit margins and create incremental revenue, Schwab noted. Similarly, D&H is working closely with CE dealers to assist in their transition to distribution purchasing. “To facilitate the process, we're adding more traditional CE vendors to our line card, assisting with technical training and creating new CE-centric programs.”
Joel Blank, executive VP of BDI-Laguna, which along with D&H is one of only three distributors enlisted by Hewlett-Packard to carry its new line of entertainment-based products, sees his role as helping his customers help their customers.
“Convergence has finally arrived for the consumer,” he said, “and although they know what they want — all of their music and video and downloads whenever and wherever they want it — they're not sure how to get it.”
Blank, whose clientele includes custom installers and members of the BrandSource buying group's Home Entertainment Source specialty A/V branch, believes the HP home entertainment platform is a good start.
“HP positioned itself well because it has a large customer base and a nice solution,” he said. “I believe it will be a very successful category down the road.”
D&H, which is celebrating its 85th year, is one of the country's largest CE and PC wholesale distributors. BDI-Laguna sells a full line of technology products ranging from computer systems to large screen plasma displays, and utilizes three strategically located warehouse facilities to provide customers with just-in-time inventory and two-day ground delivery.
HP has also recently signed Los Angeles-based New Age Electronics to distribute its digital entertainment suite, which includes media center PCs, home theater projectors, LCD and plasma display panels, and Apple iPods.