Anixter CEO Admits Price Deflation and Non-Exclusive Integrator Sales

By: John Honovich, Published on Apr 26, 2017

Anixter's CEO has admitted to (1) price deflation impacting IP camera sales and (2) not always being 'exclusive' with security integrators.

In this note, we look at what Anixter's CEO has gotten wrong about IP camera price deflation and non-exclusive integrator sales.

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Comments (10)

They will always sell through the integrator....unless it's a large enough deal, then they'll cut them out at a drop of the hat, or at least offer to.  I think in this market it gets harder and harder to justify Anixter's over the top margins.  With IP they make more margin then I do on some sales.

As someone who worked distribution (competitor of Anixter) for a long time, I promise you this is not true. Sure, sometimes we can squeeze 20% on a project we worked really hard on and spent alot of time negotiating, creating demand, driving spec, etc. but that only subsidizes all the other times we got kicked in the teeth by integrators and took a job at 3%. It stung when you tried to drive business to your friendly integrator and lose a deal because they wanted 50% GMR on the material. I can now appreciate every persons position in the chain, consultant, manufacturer, distributor, integrator, end user.

From the times I've seen, Anixter went direct only when the end user insisted to buy direct (self installer) I've never experienced them cutting the integrator intentionally. 

It make sense since they don't want to lose the sale and they won't force the end user to do something he doesn't want to.

Why not test it by calling them up and saying you want to buy some product direct. Don't tell them your an integrator or end user, just say you wan to buy a product and you'll pay cash or CC. I did it before (a long time ago) and I got a quote. Would be interesting to have a few test calls done and see what they say.

There will always be very large end user organizations for whom it just makes sense to pursue direct purchases. If they have the resources to install and maintain large, perhaps integrated, systems what they need is a supplier that can provide a wide spectrum of product at good pricing. It makes no sense to criticize distributors who will sell direct to those end users. 

Rather than making decisions not to sell to those organizations knowing the sales will indeed go to a competitor regardless, Anixter is simply responding to demand. That's not something you "admit to", but rather sound business practice.

Slings and arrows fire at will :-)

I agree that the average 2017 IP camera is radically better than a 2013 one. But the improvements are not the kind of growth drivers like we saw when resolutions go from CIF to 4CIF to megapixel. Or transitioned from MJPEG to MPEG4. That is when we were seeing the slow but steady migration from analog to IP. Sure 4K is cool but 2 MP is fine for most applications.

But the improvements are not the kind of growth drivers like we saw when resolutions go from CIF to 4CIF to megapixel.

I agree that the increase of resolution has not been as important as SD to MP but the resolution increase + the increase in WDR + the increase in low light + the 50-80% decrease in bandwidth are very significant combined.

Yes indeed Anixter is selling straight to utilities and some are self sufficient and others are not self sufficient. Anixter's big push to sell straight through to the utilities is the fact that they bought the "Power Solutions" segment of HD Supply. By doing this the utilities hit higher volume levels and increase their buying power and rebates back on purchases thus massively reducing how much product an integrator can sell to the utilities as they buy the product themselves for projects and service the having the integrator's install said product. This cuts down on margins overall for the integrators. I understand the need for utilities to keep costs down for their customers but at the same time they expect integrators to lower their labor rates as well.

Anixter gives us better prices than anyone else. When local government entities wanted to buy direct in the past, Anixter sent them to us to buy off state term rather than cutting out the integrator.

I know it varies from branch to branch, but the service I receive from Anixter in Ohio is exceptional. 

Technology hasn't changed? - maybe you should look to see if that issue is only with your leading camera line? 

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