Anixter / Bosch Sells Direct to Amazon

Already boycotting from years of seeing this occur in retail.

Interesting as I thought Amazon was using Arecont/Exacq and/or Cisco end to end.  

Do we all remember when the lumber/hardware stores open up to consumers?  In the beginning all trades were up in arms with what that will do to their trade and take away business from them.   How could they survive? when they can’t sell the material and the labour, I remember this quite well being in the construction industry 20 + years ago. They survived, actually they adapted and overcame all the negatives.  New companies sprouted, catering to a consumer buying material and hiring an expert to install it.  Your forgetting, the intellectual property that we as integrators have- it’s the smarts to keep the IP camera connected and installed, and sending video over an ever-changing IT network that is usually installed on a foundation of quicksand.  This, in my mind, is where we will always add value, its providing the solution and working with the end user on their sales journey.

18 years ago, end users couldn’t shop our prices and we were the matter experts, not anymore- you can find whatever you need on the internet. The end user now has the tools to be able to provide comment and suggestions, we as integrators can still provide guidance and recommendations during the sales and installation of the project.  If the end user has taken the time to investigate these products, that good thing.  It means that they are more invested in the overall project, and they will take the time and invest more in your company, providing you long term service contracts.  It’s time for our industry to adapt, unfortunately manufacturers are always looking to keep their numbers up and that means more creative (and uncomfortable) direct selling through other channels. Those integrators that don’t adapt, may be left with dwindling sales and loss of business in future years.

Good read.  I remember about 10 years ago when ADI sold Honeywell Video products direct to Menards (midwest big box company) and it upset many integrators. 

I don't fault either ADI or Anixter for doing so (voted "yes" on the first question) that is capitalism, a buyer and a seller being willing participants in commerce in a way that they wish.  However, I don't agree with Anixter (or ADI) in those situations and feel they could have explained to the potential customer their position about selling to end users and directed them towards a local or national integrator. 

This is a tough one as a Distributor should never be selling direct. Right?  

But, what if the end-user, who is going to spend $10's of Millions will only negotiate with the Manufacturer?  If the Manufacturer will not do that they are eliminated from the opportunity. Also note, there never was an Integrator involved.  The Manufacturer did all the work and it took them a year or two to get to this point.

So, the Manufacturer negotiates the deal direct with the understanding that the Distributor will be the supplier and the Distributor agrees to "X" percentage points on the deal.

In a case like this, they exist, the Manufacturer sticks to their commitment not to sell direct.  The Distributor takes a pass through sell that is direct to the end-user.  

It was either this or lose the deal as plenty of Manufacturers will sell direct.  Should they both have walked away from a multi-million dollar opportunity?  how many integrator's do over $10M/year with one Manufacturer?

Please see my response to John above.  When you do not know all the details it is easy to jump to conclusions.  The only way to know all the details of the Bosch deal, or any other one, is to sit in that negotiating chair yourself.  You may not agree with the decision being made.  But, you also do not have more then .5% of the information that went in to the decision.

Really it should come down to "Has my chosen Distributor or Manufacturer" ever screwed me.  If they have, find another one.  If they haven't it is a moot point.  Why complain about not getting a deal you would have never gotten, and probably never knew about, anyway.

Get used to it, its a standard with all the 'distributors'. They are so badly beaten up by online sales that they will go to any extreme to make a sale. None of them make the numbers they did 3 years ago. And guess what, it will get worse for them.  A birdie once said that it is everyday business at ADI to sell to anyone with cash, Wholesale Only thats Baloney, no personal checks please! (too much hassle making deposits I presume?)

Distribution does not care about you Mr. Integrator so that means find the best direct lines for the products you need and hope you NEVER NEED a Distributor again.

Just add it to the list.  If you spend your money with Anixter, Tri-Ed, Accu-Tech, Clark, or any of their other brands, you are literally giving money to your competitor.  

It's just bad business.

Just another reason I would never consider opening an account.

I think Amazon uses more product that can be distributed through Anixter than most of us here combined. 

That being said, I voted no they shouldn't sell direct, but that's just me looking at it from the outside in. I don't fault them for selling direct to a customer such as Amazon who's primary and/or secondary business are automated packaging lines and data centers around the world. The last thing Amazon wants to do is deal with middle men slowing the flow of our data. I even doubt its price related. 

However Anixter selling to healthcare companies and other unrelated data and automation centric businesses is a different story. 

What gets me is that some reps aren't honest about it. In our 25 year history we have seen both types, but I have not received a response from any that flat out say no we dont sell direct to end users. It mostly some propaganda around some strategic account that has a long history with blah blah and they just want to work direct with us.....

Anyway, we buy from Anixter and companies but we don't buy from "them" we buy from our dedicated reps that take great care of us and provide us an extension of our logistics operation. 

Now consider this, if a manufacturer offered to sell direct to you for less cutting out distribution would you? I'll be honest Anixter, Unfortunately for you I would on allot of items. Not all but the core, probably. 

Another thing to think of is that with the size of Amazon it is not unlikely that their internal IT or facilities maintenance dept at distribution locations has the know how and technical capabilities to perform their own install and system programming. In this case why would they need an integrator? It is as simple as one of us buying from ADI and self installing the system in our home or business. Why out source it when you can do it yourself?

I'm curious to know what the mimimum margin percentage an integrator would be willing to earn on hardware, in order to get the installation and service business, in a situation where a manufacturer handed them a deal like this (pulled through distribution).

NOTICE: This comment has been moved to its own discussion: What Is The Minimum Margin Percentage An Integrator Would Take For a Deal a Manufacturer Handed To Them?

Anixter is doing this to us right now.  We turned a school district (that we have done over 2 million with) on to a product and since the school wanted to try it out and not involve us at this time they purchased the product from Anixter at a very low price.  I called the manager and he stated that they sell direct on all products except for security, which this is a paging/clock product.  Never heard that one before.  So we had the talk again about when the proof of concept is done and they are ready to spend the bond money ($1,000,000) to secure the product for 45 buildings "installed" how was Anixter going to handle it?  Two issues here is that Anixter chooses to not have relationships with the main integrators in town because it makes them feel better about selling direct to end users.  The other issue is when they get caught and or called out on it the real pricing they gave the end user surfaces and there is zero margin left for the integrator.  They buy at wholesale, mark up to us typically what they would sell to the end user.  When I called the manager he said there should be plenty of margin for us, at least around 15 points.  Obviously they have never ran an integration company, you cannot survive on that margin to the end user. It has been over three weeks and still not another call to tell me what they can do for me price wise to try to make it right...and I have left message.  I called the manufacturer who is pretty new with Anixter and over a long conversation they said they will talk to upper management with Anixter to see how this happens.  Let me just say they don't give a crap how they sell their product until integrators like us go to our customer and change it to a different product, which sometimes we have to do to make any money.  But of course the customer already knows what he should be paying for a speaker/clock. 

Just a few months ago I posted a comment about Anixter and Bosch snaking a 7 figure sale from out company and how I was urging all of you to buy from someone else. I had full visibility to this deal as well. There are more. Keep peeling back the onion and you will find more. This IPVM community hammered back at me vouching for anixter. However based on the results from this survey it seems the opinions have changed. We as integrators have an extremely strong voice and it is with our purchasing dollars. If you continue to buy from anixter you will get bit. Take it from someone who knows first hand. Buy from someone else.  

The same goes for Bosch. With their recent move to take the b series line to distribution completely diluting their dealer direct model you should find another security manufacturer. Keep in mind there are limited to no requirements for an untrained inexperienced person to buy this equipment. You are now sharing tech support (should you need it) with lines clogged by idiots. 

Use you $$$ as your voice.  Don't hesitate to tell your reps why they have lost your business. 

We have been boycotting Anixter for many years (15+) and we purchase over $5M annually from Anixter's competitors. Over the last 10 years, our purchases are well in excess of $50M! These are sales orders/revenue that Anixter has lost over stupid decisions like this one, for what is described as a $10M opportunity.

And we are only one (1) Integrator. 

Of the 75 IPVM members who voted above on Boycotting Anixter, 87% (=65) of the responses say yes "Boycott" so take 20% of our volume = $1M annually x 65 and look at a $65M annual loss from just your responders!

Our company policy is and will remain; any employee who buys as much as a single connector from Anixter, will be subject to disciplinary action including termination.

The excuses that "we don't do that anymore" or "we have stopped selling direct" is an old song that honestly, we have heard before.  Anixter must think that the Integrators are not smart enough to find an alternative.

Unless Anixter is greasing the palms of Integrator's employees... who is make decisions to purchase from them and, why would anyone do business with any company that is willing to go behind your back and, cut your throat?

Non Anixter Integrator -

Distribution does not care about you Mr. Integrator so that means find the best direct lines for the products you need and hope you NEVER NEED a Distributor again.

Marty, I agree with you 100%.  I work very hard at finding manufacturers who do not use ADI and Tri-Ed/Anixter for distribution and use them only for mics. parts, connectors, etc..  I have had customers who were not in the industry ask me to give them part numbers (which I do not include on my proposals) because they have an account with ADI or Tri-Ed/Anixter and they would like to save money on the install.  Also, I have made it my policy not to install equipment supplied by the customer or others.  I believe there is enough business out there to avoid this scenario.  I also find that customers interested in purchasing their equipment from someone besides me to pretty much just waste my time.

Where can I apply for a Physical Security Engineer job at Amazon ?

They'll surely need a Bosch Ip Video expert... :)

Come on guys, Anixter idea that they can sell Bosch  through Amazon is a short lived dream. They can enjoy it while Amazon collects data and bybass them as soon as they see it's fit. We work with Walmart and they already buy direct from Bosch. When a company is struggling, the CEO might make short term deals to make the investors happy. I believe that's what Bosch is doing.

Marty, I follow Your posts on IPVM. I respect your feedback but I think company Security owners should except the fact the technology is going after DYI installation with automated Support. Cisco got it down 5 years ago. 

I would love to argue the case.. I just don't see it.

I almost never comment on these strings, but am going to chime in here.  There is a basic principle that needs to be considered, and that is every business' right to make the best decisions for their customers, and ultimately their shareholders.  That is what Bosch/Anixter are doing here.  Now I get the sensitivity knowing that distribution typically gets better pricing and operates off lower margins on hardware that integrator, and that should be considered by the manufacturer when pricing a project like this. But the bottom line comes down to this:

1.  Manufacturers have an obligation to grow and protect their market share.  Time and time again the integrator community (with many exceptions) have shown a willingness to create many partnerships, drop manufacturers and more, so why shouldn't they develop end user relationships, and even sell directly?

2.  Integrator are highly skilled, and have an obligation to their shareholders/employees to grow and protect their market share (I love Cliff's example of the lumber industry).  As I said in point #1, integrator will often have multiple partnerships and will mandate that companies compete for their business.  This is their right - and a smart business practice.

3.  Distribution...... etc, etc, etc.  See points above.

I love the movie Moneyball.  If you are passionate about selling, watch it again but with your sales hat on.  There is a great line that Cliff is illustrating.  Brad Pitt says "adapt or die".  Respectfully these message boards often illustrate that integrator are most resistant to adapting in our business.  These types of posts and deals are not going away, so I say to all of my friends - "adapt or die"

As a regional integrator, I do not like the move, but as a business person, I understand it and know we are powerless to stop it.  A precursor to this was when a manufacturer's "national accounts" division's negotiated fixed discounts that an integrator had to live with, which in our experience were steep and forced us to re-allocate how we priced our services on such sales.  Today, all manufacturers are moving away from the distribution side of the business for valid reasons.  This is starting to happen even on the fire side of our business.  As for Anixter going direct to the end user, they have the national reach and can more easily pass on the pricing that Amazon negotiated. I don't know the deal's details, but doubt Anixter is charged with keeping their systems maintained and running.  Amazon does those things on their own after the installer's warranty runs out.  We have had success with Amazon, but that side of our business is managed much differently.  A typical integrator's model would struggle to meet their demands - that is why we separated it out.  You are not missing what you think you are in this deal.  As integrators we are powerless to stop the evolution to these changes.  What we must do is adapt our business.

The reason Alibaba did so well is everything, in most of the world, is direct and expected.  

When I told customers, in the Far East, I have a manufacturers rep, they made it clear they didn't want to see them. It only meant one thing - somebodies getting part of my profit!

The internet will peal the layers back. Stick with intelligence or culturally based products.

| When I hear people in our industry cheerfully announcing their willingness to "adapt" to this, my head wants to explode.

Ditto.... my head also wants to explode when I hear someone say "we must adapt"!

We chart our own course, make our own decisions and, we choose not to adapt doing business with manufacturers and distributers who have your back. Not those who would stab you in it!

Integrators can choose; Are we to be known as a Leader or a Follower?

Followers choose to be like Lemmings who are widely known for their tendency to run en masse off of cliffs to their deaths. Integrators who's behavior of adapting, mimics others and mindlessly follow the crowd, despite the obvious consequences, will all succumb to the same fate!

Lemmings shall continue to pile up in the Race to the Bottom, along with manufacturers and distributors who cut their own throats over short term thinking.

Some "think" loyalty is dead. It isn't! 

Adaptation is not succumbing to pressure or mindlessly following the crowd.  Adaptation should include forward thinking, innovation, and a willingness to change. 

Adapting by definition is succumbing to external forces in order to survive, no? 

If you are assuming we are only trying survive, maybe! There is a BIG difference however between mere survival and profitable business growth!

When those who have been in this industry for a long time think that this its "just the way it is or the way it has to be" they are adapting to what they perceive to be the norm and thinking there is nothing they can do about it! We (especially the collective we) have more power and control than you think.

Definition or not. NO, I don't believe that we have to succumbing to external forces in order to "just" survive. 

It's simple, either don't take labor-only projects OR have an agreed-upon markup like an interior designer or general contractor. If you would normally make 20% profit then maybe split it with them if you don't have to order, warehouse, or warranty the hardware. And bill them for every single second you spend on the project.

Integrators who take these so called "labor only" projects are in fact, facilitating and supporting the practice of direct end-user sales by manufacturers and distributors. As they make their expertise available for hire, they have lost the foundation of why they exist and why they are known as an Integrators, and not Installers.

Thank God that ethical manufacturers still exist that will not, under any circumstances, sell direct to end users. While these manufacturers continue to promote their brand among end-users and target industries, they always engage a Certified Integrator to quote the technology, infrastructure, installation labor and sell the value in their expertise!

Integrators should refuse to support this direct to end-user sales, thus making it impossible to hire professional video surveillance expertise for installation, commissioning, and training.

Under the true letter of the law, wouldn't some of these distributors and manufacturers be violating various state licensing requirements, by selling security technology direct without the proper security license required? Most states do not simply require technicians and installers to be licensed, but the sales staff also, correct?

Do you also facilitate and support this violation of the law, when legitimate Integrators must always comply?

Unfortunately, many Integrators are exactly like the manufactures and distributers who engage in this cut-throat practice...

...Their greed is more powerful than their character or standards!

I've always thought that cutting the "middle-man" (e.g. integrator) from the trade, hire an expert for the company who can design, commission and maintain the system with sub-contractors to physical works would be much more convenient and cost effective for any company. If manufacturers give in for this logical point of view of end-users, integrators are gone.