Anixter End User Sales Troubles

Good...their nonsense is coming back to bite them in the butt. If an enduser comes for help, hit them in the wallet.

Happening right now on a large school project we are working on.  We introduced the customer to the product, then they went to Anixter to buy demo gear.  Now we are competing against them directly on $300,000 worth of gear.  They stated the customer said they did not have an integrator working on the account, even though Anixter knows we work with the district and never called us to ask. And of course the school is going to say this.  I hope they have fun hiring installers to go put it in. If we sold it now (after they sold it and their normal markup from their wholesale price), we would make less than 7%.  The least they could have done is sold the demo at MSRP. This forces me to sell competing products so the manufacturer that doesn't have a backbone to call them out and fix it will lose all the sales we have with our other customers in the future.  

It's one thing for a distributor to sell direct but a whole other thing when a mfg does it.  Take for instance AXIS, they claim to have a clean channel but that is as far from the truth as you can get.  You just have to look at one of their largest accounts, Target (180K+ cameras) Target is buying the cameras from Anixter and not an SI. This was not Anixter's but AXIS arrangement with Target. They may list a so called reseller somewhere but thats just good old smoke and mirrors.     Also, don't forget all of the other avenues which AXIS and other mfg's turn a blind eye to...B&H Photo, Amazon...the list is huge! If they need to cough up better margins to win a deal, they will, and without any hesitation.

How is an SI supposed to make a buck when the distributors and manufacturers keep cutting us out of the business.

Maybe the answer from a SI's perspective is to not support (or lead with when having influence) products which are sold through Anixter ? Genetec, Avigilon, Qognify,S2 and many other Tier 1 products are not sold through Anixter. If one truly has the ability to drive product selection, one should make sure that they do their best to think through scenarios where a distributor such as Anixter could undercut them. Comments ? 

Integrators need to stand together and stop supporting distribution that sells directly to our end users.  Our buying power collectively can make an impact.  

After three years of running the Tri-Ed and Anixter businesses separately, 2018 will be a year of consolidation that is already starting. I believe that they will finally have Tri-Ed brass run all security products and consolidate call centers and distribution teams and separate Data com from Security. No company of this size will double pay for too much longer. I believe this will slow down the direct business as the Tri-Ed brass has been getting there butts handed to them due to these Anixter practices.

In the interim, here are some practices that integrators can use to keep distributors from infiltrating your accounts.

1. Never give your contact the name of the project you are working on. (Call every project warehouse)

2. Never drop ship product directly to the site. (Distributors pack there boxes with sales flyers).

3. Make the distributor sign an NDA for any information on your account. 

Been there, done that, been burned. I won't use Anixter unless its an emergency that bails my customer out. The Northern Video > Tri-Ed > Anixter mix is a nasty one.

I've lost business to ADI with a school district :(

We buy from Anixter.  We also buy from ADI and Scansource.  The main reason we buy from Anixter is the 90 payment terms we were able to negotiate. As their prices are slightly higher then ADI or Scansource.  Regarding the direct selling.   They definitely do.   There posture is if you are an integrator who actively does business with them they won't sell direct to your customers or potential customers who are in need of an integrator (usually I get the referral from them), however, if its a customer that has an integrator, but that integrator doesn't buy or is unwilling to buy from Anixter then they will aggressively sell direct.  I don't think this model has negatively impacted my business.

It must be assumed now that all distributors will sell direct to end users, just as it must be assumed that most manufacturers will sell direct to Amazon.  The margins are too small in 2 step distribution and the race to the bottom and the sheer number of products with little differentiation make this the case.  I work CCTV on the side now as I currently have a day job at a non security manufacturer and its my entire role to sell products directly to consumers, and to Amazon and to make sure the impact to the distribution channel is minimal or at a distance.  Amazon alone represents over 12 million dollars in direct sales and gets us an additional 25points margin. How can a company say no to that?  

You should take a look at ecommerce Industry trade news and the main push now is Omnichannel.  Manufacturers and brand owners selling to distributors, retailers,  end users, amazon, in stores, online, everywhere.   Sorry to say to the detriment of dealers,  the 2 step distribution model is slowly fading away.  Manufacturers were once really bad at parcel and small orders, are now adding whole teams and facilities to manage things.  The end of things will not be tomorrow but its coming fast. 

That's because a lot of integrators rip off their customers. I've seen it so many times when they add 50% to the product cost. I'm not surprised that customers want to save some money

Tom....varies. I see lower margins for public bid versus negotiated direct sales.  As low as 15% on bid work to 40% on direct sales.  Don't know if there are any industry guidelines....perhaps IPVM has done a recent survey?

If you are providing value added services and expertise you shouldn’t have to Match online prices.  What vertical markets are you selling into ? 

7-12% margin on items will put in the ballpark we have seen.  Customers will price shop amazon and google and expect it to be in the same ballpark.  Most will pay a little more then online pricing but anything more then 10% and they will cause a headache.  Products are a commodity now, and the only thing you can sell is the service.  Its harsh, not good for the industry but its the new reality.