The Coming Distributor Wars

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Here is a key question that will surely elicit some comments and opinions. Who will be first, or perhaps the best, to truly add value to their AV and IT products and services and move the distributor model away from commodity pricing. Impossible you say? Not quite so fast. With the advent of digital signage and many increasingly recognizing the extra support requirements for the disparate parts of this complex market, the need for a distributor to become a true partner to their resellers is more necessary than ever. In this case "partner" is not a euphemism for lower prices rather a cry from the resellers for support beyond the products that the distributors sell.

For years we have had the three distinct camps of distributors made up of companies addressing Pro AV,  IT, and Home Theater. With the convergence of AV and IT the lines are becoming blurred before our very eyes. On my recent trip out east I met with two IT distributor giants and  I also met with the two of the largest  Pro AV suppliers. The one common theme was an understanding of the need to shift their paradigms and a determination ( yes determination!) to change the commodity business model in order to address the needs of new and emerging markets like digital signage.

In separate meetings with multiple Pro AV and IT distributors there was a common theme. They all see the need for supporting their resellers in a more meaningful manner to help differentiate their companies in the minds of their customers and help grow the market in a significant way. In order to do this they realize that they must fund these services by moving away from the "low price wins" model into a full service approach. In short, they realize that support is not free and since we are seeing less and less of this rare commodity (pun intended) from manufacturers leaving the distributors to fill the void.

The skeptics out there will say that this paradigm shift in business models and practices will never happen but I disagree. The companies mentioned above among others are beginning to talk the talk and walk the walk. We see their employees being trained in best practices. We see certifications like InfoComm CTS, ISF-C, and the Digital Signage Certified Experts (DSCE) program gaining momentum. The resurgence or in some case the emergence of the full service distributor model properly employed will negate the bad affects of commoditization at least for those who "get it".  In the end we all profit. Lets the best companies prevail!

Posted by Alan Brawn at 11/19/2009 08:45:14 PM | 


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