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Distributors Discuss New Partners, Initiatives, Plans

Many of the distributors we’ve spoken to recently have agreed that the nature of their field is changing. In response, most are evolving their business models by entering new product categories, adding manufacturer partnerships or introducing new educational initiatives.

Brightpoint’s marketing and business development senior VP Alex Paskoff told TWICE that the mobile handset distributor has tried to expand the channel it already serves with the recent introduction of several new wireless multimedia devices that “incorporate photography, video and TV, music and mapping solutions into a seamless user experience that can be utilized by consumers and enterprise customers.”

Capitol Sales has increased its products and services for its commercial installer base. In the last year, the company has entered relationships with Pioneer Industrial Displays and Panasonic Projector Systems. It has also expanded its product selections from existing partners like JBL Professional, Crown Audio and Bogen.

The company also augmented its shipping system, moving to weight packages with their dimensional weight rather than their actual weight. A new technology called “The Dimmer” automatically captures parcel dimension and weight with the push of a button, making it easier to meet a new nationwide shipping requirement implemented by major ground parcel carriers this year. It is also said to provide Capitol’s customers with immediate information on freight costs.

Curt Hayes, the distributor’s president/chief financial officer, said, “We have also expanded our education facility to provide application-based education that teaches how to integrate multiple lines into systems.” He added that 20 percent of the education sessions at its Dealer Education and Technology Showcase in March were related to commercial technology.

Hayes also offered the company’s new Rhino labeling system as an example of a way that Capital is helping its installers differentiate themselves. He explained that the system is used on complex wiring systems to make them easier to install and to make it easier for the customer to reconnect if they ever have to unplug the devices in their system themselves.

Bill Lyons, VP and general manager of Cardinal Electronics, said that his company has also been focused on custom installers for the past few years. He said that it recently added product lines from Cambridge Soundworks, Altec Lansing, Jobsite by Niles and Olevia to its offerings.

“With the FCC mandate for February 2009 HD tuner compliance, there is a huge potential for flat-panel business in the hotel and builders market. We have just started to scratch the surface and feel that as the clock keeps ticking, the mad rush to comply will be a windfall for distributors,” said Lyons.

Samuel Golowinski, marketing director of Z. Reiss & Associates, told TWICE that his company recently entered the flat-panel TV category as well as the “wireless/Wi-Fi category.”

Stampede’s president and COO Kevin Kelly said that his company introduced “accessory category management” this year.

“We help our dealers understand the importance of selling accessories and their impact on the bottom line. As part of our service we select the accessories they need and help them maintain proper inventory levels to keep their customers satisfied,” he said.

Kelly added that Stampede also introduced a private-label accessory program for dealers interested in offering accessories under their own brand names.

While many of the distributors we spoke to eagerly discussed the new categories that they were entering, others indicated that they were less interested in change.

DSI Systems president Doug Robison said, “DSI is not changing our direction at all.” He explained that the company is continuing to focus on custom install products and in particular is still working toward its goal of being “the leading supplier to the independent retailer for consumer electronics, DirecTV and accessories.”

Despite claims of staying the same, Robison did mention that “our focus in appliances leans toward high end with our partnership with Fisher & Paykel.” This partnership, announced earlier this year (see TWICE, April 23, p. 34), marked a return to the category for the company which in the past had carried brands like Amana and Magic Chef.

Finally, Rob Kalman, VP of U.S. marketing at SED International, told TWICE “I see more of an evolving and strengthening of emerging areas, rather than new directions” for his company.

He said the distributor is still “filling out” the CE side of its traditionally IT-based business, “at least in terms of complete solutions.”

“We have some very strong offerings on the CE side already and it’s exciting to think about how much better it can still get,” he said.

Kalman said that the company is increasingly finding new types of resellers in addition to existing resellers “who are finding themselves entering the IT and or CE channel in some way.” He used storage products as an example, explaining that in the past they were really only sold by computer dealers but that “now, almost every reseller can and probably should be selling storage products to meet some end-user need.”