Most resellers deal with distributors day in, day out. They get to know the vagaries, and the benefits, of the channel model inside out. We canvassed reseller views of the distribution sector and put their comments to three leading distributors.

Neil Barlow, general manager at unified communications reseller Videonations, says he deals direct with manufacturers about 60 per cent of the time, but also buys some products from distributors, including Nimans. That gives him a view of both direct and indirect sales, but Barlow remains relaxed about the distinction. "There's really no difference from our company's point of view," he comments. "Except dealing direct means more margin." Some products, for instance, Videonations buys direct from US suppliers, in dollars. That makes a difference to the margin it can make. But, perhaps surprisingly, this isn't as important as you might imagine. While margins are important, operationally, says Barlow, the distinction isn't as clear cut and he remains happy to deal in both ways.

Matt Ashman, commercial consultant at network security integrator Khipu Networks, emphasises that his company has no direct relationship with vendors. As an Alcatel reseller, Khipu, which is part of the White Clarke group, works with Alcatel-Lucent distributor Sphinx and also has relationships with a number of other distributors, including Horizon equIP Technology and Westcon. Khipu uses Horizon for Juniper and Infoblox products. "It's tough trying to find a good distributor that understands your business," says Ashman. "Some focus on that, but some are just selling the kit. That's fair enough, if that's what they want to do."

Product is the deciding factor, when it comes down to it. Resellers need specific products and that often limits which distributors they can deal with. Still, resellers like Khipu want a distributor with staff who understand the products they are selling. "We want someone who understands the products and the solution and can help our internal people to do the calls out to build up sales," he comments.
Ashman singles out for particular praise his longstanding distributor, Horizon equIP Technology. "They not only sell product, but provide support and marketing. Also very important is that they have a very quick turnaround on quotes. That's vital when you're in front of a customer. And their product knowledge is very high quality. We can always ring them for advice on products."

One question that arises about the nature of the relationship between resellers and distributors, as in any area of business, is how much it depends on the bottom line and how much, even today, it's still about personalities and about doing business with people you like. Ashman, at Khipu, acknowledges that it helps to know and like the people you deal with at a distributor. "It makes the relationship seamless if we have a good working relationship with people and some fun," he commented.

And on the other side of the fence, distributors agree that personal relationships at all levels between them and their reseller partners help smooth the path of progress.

One of the long-standing bugbears in the channel has been whether distributors should also sell direct. "There are certain distribution companies that also sell to customers and we tend to steer clear of them," comments Ashman. "It doesn't cause us issues, but we prefer to keep away from it."

Terry Aylmer-Smith, owner of Sussex-based reseller Peach Business, says trust is important in any relationship with a distributor, particularly where customer accounts are concerned. Peach uses Rocom as its main telecoms distributor, mainly to source NEC phone systems, and has worked closely with the company on sales.

"We've used Rocom leasing and Rocom people have spoken to our customers, always with very happy results," he comments. "On the technical side, they have been very helpful, particularly in the early days of some of the NEC technology, when they went the extra mile."

Pricing is always important, because of the cut-throat competition in the industry, acknowledges Aylmer-Smith, but reliability is just as important. "A late delivery could jeopardise a customer."

Sphinx:
Mark Hatton, Managing Director of distributor Sphinx, says the prime attribute of any distributor is efficiency, delivering product to resellers in an effective manner. "But from that point on, things are driven by the strength of the relationship," he says. Relationships operate at different levels. The sales organisation at Sphinx has good relationships with those of its partners, says Hatton, and there are similar relationships at a management level.

"It's very rarely about one individual at Sphinx and one individual at the customer," he points out. "It's about multiple relationships and that's important, not just in terms of ensuring we can do more business, but also because it can make problem-solving easier."

As for leadership from the top, Hatton plays down his own role, though he is a well-known figure in the industry. "That doesn't have a whole lot of bearing on things," he says. "It's much more to do with the people at Sphinx who conduct our relationships with our clients."

There are, inevitably, challenges in maintaining and growing relationships with resellers. "The industry we work in is mobile and people do move round," acknowledges Hatton. The industry itself has consolidated over the past 10 years, with fewer owner-managers. "They were very hands-on and made all the decisions themselves. If you got a strong relationship with that owner, you were in good shape. Today, there are fewer businesses like that. Our partners are slightly larger and so we have to have strong relationships at all levels."

MTV Telecom:
For Jim Robertson, Commercial Director of distributor MTV Telecom, personality is ‘absolutely key' to good partnerships. "I'm a great believer in the fact that people buy from people and that applies not just to sales people," he comments. "It goes deeper than that, which is why we encourage our resellers to come here for training courses and meet our technical people."

MTV Telecom has about 2,000 resellers and naturally that makes it impossible to see each and every one on a regular basis, but Robertson says the distributor doesn't just concentrate on its top customers, but focuses on its mid-tier resellers as well. And cultivating partners is carefully thought-through. "It's all very well to have relationships, but we also have to deliver services," he comments. "And while in the SME sector it's very much about adding value, having said that, we have to have the products too."

It's a big challenge for distributors, according to Robertson, to marshal resources to work with resellers in the most effective manner, though that is clearly one of the major issues. "We'd all like to have 100 account managers, but that's not a reality, so we use other ways - seminars, road shows, workshops - to reach people," he says. And MTV Telecom has recently launched its Get Closer campaign to raise awareness of the firm among resellers, particularly in relation to its services such as accreditation and marketing.

Competition is another continuing challenge. "That's where the value-add comes in," says Robertson. Smaller resellers may focus on margins, but they also know that services count more than a couple of pounds on price, he says, while larger resellers appreciate that they need more help on more complex sales. So these are the ways in which the distributor seeks to differentiate itself with its partners.

Rocom:

Lucy Keightley, Head of Brand (peripherals) at distributor Rocom, says distributors have to be realistic: "There will always be resellers who only use us to buy product," she points out. But for many other resellers, the relationship is about partnership.

"We cater for both types, but we want to work more and more with the resellers who know that its about growing their customer base and who keep going back to that customer base," she comments. "There may be a big initial sale, but for us, because we sell peripherals as well as systems, that gives us a good way to help resellers keep in with their customers."

Keightley says Rocom's total distribution package is important, combining all the different aspects of what the distributor can offer to its resellers, including support. "It's not just about the speed of getting equipment out there," she says.

With 200 staff at Rocom supporting some 2,000 resellers, the 80/20 rule tends to apply and Keightley acknowledges that Rocom focuses on getting its resellers to increase their spend. That's what it's in business for, after all. She believes that in the present growing economic gloom, the role of the distributor can become even more important, in encouraging resellers to pick up every single bit of business they can from their customers.

"They may be able to bring in incremental income that they probably wouldn't think of when times are good," she comments. "But if a customer spends that little bit more, it all adds up."