It happened to us at my old company, SecureNet. It happened more than once, each time with large clients; in many cases we looked at this as strengthening our relationship since most of them still depended on us to provide services for major installs and our former employees were tasked with the moves/add/changes and preventative maintenance tasks.
At the end of the day, the industry will move when the end users want it to go. Keep an eye on what the big purchasers are doing. Watch the huge retailers who are installing 10's of thousands of cameras. They are going direct to distribution, because integration does not provide enough value.
Sure, these are pretty advanced organizations, but give it a few years. Integrators want products that are easier to install and cut down on man hours. As manufacturers respond, it's only a matter of time before manufacturers are making products that are so easy to install that the integrator isn't needed.
There was a time that you used to call the phone company to install a phone in your house. I'm not talking about running wire, I'm talking about installing the phone itself. That was before standardized plugs, and the phone had to be physically wired in. Now we have RJ9 plugs, and we don't have phone installers.
I agree with pretty much everything you've said, but I do think it obscures the point that makes this post newsworthy - and that's that Anixter has gone on record many times over the years claiming that they "didn't sell directly to end users any more". I will diplomatically refer to this as a "consistency issue".
Other than the ethical question, this consistency issue wouldn't matter, right? Except manufacturers are basing their strategies - or at least their arguments in support of their strategies on the idea that Anixter is designed to support the integrator, who is required to keep certain levels of staff, training, and activity to represent and support the product.
This affects pricing, marketing, and ultimately, the reputations of the brands involved when channels and markets get tangled.
Anixter is making a huge mistake in who they think they are in reality they are a middle man by cutting out the dealer/integrator and going direct can backfire on them lets see what the CEO thinks about Manufacturers selling direct to integrators and cutting them out
In theory, you are correct. However, the Manufacturer <=> Distributor relationship is a little more complex.
Many manufacturers like to sell through distribution because they do not want to extend credit to integrators, chase integrators for payments, and setup shipping and warehousing operations to fulfill orders. In some cases the warehousing part can be managed, either internally, or by using a 3PL company, but the credit part can be a little more risky.
For the most part, I do not think many manufacturers truly care who the "customer" is, in the sense of integrator, end-user. As long as it is a good sale and not going to be a support nightmare, a manufacturer is happy to cash the check (maybe even more so now with Hikivison/etc. pulling prices down).
At this stage though, manufacturers do not want to sell direct to end users, it will cause too much chaos in the channel. But if the distributor sells direct, the manufacturer can claim that is not supposed to happen, they are not aware of it, etc. This may not always be true, and if it gets out of hand it may cause problems, but up to a certain level it can be managed.
In this sense, the distributor is a combination bank/warehouse/fallguy for the manufacturer. It is not a glamorous business, but it can be profitable.
If direct end-user sales become accepted in the industry (either fully accepted, or just so out of hand that integrators can no longer complain about it and get anywhere) then I think you may see manufacturers cut out distributors, but that is still not likely to happen for several years.
Important Message from Foscam Digital Technologies Regarding US Sales & Service
We, Foscam.US (aka Foscam Digital Technologies and now Amcrest Technologies), are an independent United States based distributor of "Foscam" branded products. We have been offering telephone support, US local warranty and building the Foscam brand in the US for the past 7 years. However, we are deeply saddened to report that, even after all of this, our overseas suppliers have decided to undercut us and supply to our major customers directly. For this reason, we have no choice but to suspend telephone support for all Foscam branded products. If you have purchased a Foscam camera directly from us or from one of our authorized retailers, technical support is still available via email at email@example.com.
Manufacturers are able to prevent their distributors from selling to end-users if they choose. To do this the mfg will typically require that each bonafide reseller create an account with the mfg, and then require the distributor to attach which reseller the order is going to on the PO. So if your manufacturers products are going around you and direct to end-user I would say look at another manufacturing partner that honors the channel.
Yes, if the manufacturer wants to, they can clamp down on this to a large degree. Policing like this also adds some overhead to the relationship to keep up on everything and track things, and the distributor may still have a reseller partner that is happy to pass things through at zero or near-zero margins.
But if the distributor is bringing in sales that do not create a lot of hassle for the manufacturer, the manufacturer has little incentive to go out of their way to prevent this.
You're joking (I think), but this could be an interesting strategy for integrators.
When you come across one of "those" customers, the ones that you just know are nothing but trouble and not one you want to deal with, tell them "you could save yourself a lot of money by just setting up an account with Anixter and DIY'ing this."
After enough of those, and the support calls that go with them, the manufacturer might clamp down harder.
Mfgs do have great interest if they have a go-to-market strategy based on strong channel partnerships. Disty's selling the mfg's product direct weaken the mfg's channel positioning, and the integrators trust in the mfg. I am sure there are some mfg's that will take every sale and look the other way, and I am sure there are many who will refuse the sale unless a valid reseller is identified as the purchaser.
My take is this: there are indeed some end customers who are highly capable of adding on to an existing surveillance system. If they are going to self install, then let them. A distributor should still find a reseller to pass through the sale IMHO.
I don't view this as circumventing the system in this circumstance, and in fact I see it as providing what the end customer needs- and by executing a pass through sale preserves the channel model.
Distributors who sell direct, again, IMHO, are just trying to clean up a few extra points. I personally wouldn't trade channel integrity for that. I am no longer/ but used to be in distribution.
In certain states and/or jurisdictions, it is illegal for unlicensed personnel Mfg., Distributor, IT VAR, ect.) to visit a organization, college, job site, to look at plans, and/ or make security recommendations (camera type, camera location, infrastructure, ect.).
In the state we are located in (North Carolina) it is a criminal act to ignore the statute (NCGS 74-D). I plan to file a grievance against an Anixter Employee ( or any other distributor) if our business is impacted by the activities their CEO describes.
Just looked up the requirements to get an alarm license in North Carolina, and I have to say, this is BS.
The application requires you to list and give details for your mother, father, spouse, and children, your spouse's employer, all home addresses going back ten years, all jobs going back ten years, if you've ever been sued by a debt collector, if you've ever been fired from a job, if you've ever been fined more than $50, and if you have any mental or emotional problems. The real fun, however, is the form your five references have to fill out, which asks if the applicant is "family oriented" and asks if the reference has ever done anything "illegal or questionable".
I find your questions intrusive and irrelevant to the business of surveillance and security, North Carolina Department of Public Safety.
I live in NC and I 100% agree with your assessment of the NC Alarm Systems Licensing Board - an arm of the NC Dept of Public Safety. It is BS personified.
The Alarm Board in NC restricts the ability of anyone to sell surveillance systems without an 'alarm' license.
imo, surveillance is a separate entity when compared to 'alarms' - but that's not how they see it. And guess who makes up this Alarm Board? You guessed it - the heads of the existing alarm companies in NC.
It appeared to me at the time (years ago) when I was attempting to start up a surveillance installation company (straight up trunk-slammer style) that the Alarm Board was more interested in protecting their own interests - by making it very difficult for small start-ups to 'start-up' - without first complying with the ridiculous regulations you pointed out.
At the time, I was highly pissed off about the whole 'stacked against new entrants' position taken by this board.
However, since they shut me down, I became a technical trainer and love what I do now.
So even though I think they are a bunch of inbred rednecks with protectionist policies, I have to tip my hat to them for driving me into the position I now hold (and absolutely love). :)
Looking on the Anixter website at AXIS COMMUNICATIONS P3364-VE camera (at https://www.anixter.com/en_us/products/0482-001/AXIS-COMMUNICATIONS/Surveillance-Cameras/p/473703), the Description says,
Light-sensitive, day/night fixed dome with Lightfinder in a vandal-resistant, outdoor casing. Vari-focal 2.5-6 mm P-Iris lens, remote focus and zoom. Multiple, individually configurable H.264 and Motion JPEG streams; max HDTV 720p or 1 MP resolution at 30 fps. WDR - dynamic contrast. Video motion detection and active tampering alarm. Two-way audio and audio detection. I/O for alarm/event handling. SD/SDHC memory card slot for optional local video storage. Operation in -40C to 55C (-40F to 131F) powered by standard Power over Ethernet. Midspan not included. Includes smoked and clear transparent covers, weather shield against sun, rain or snow, and 5m (16 ft.) Ethernet cable with mounted gasket.
Must be a reseller to purchase this product.
Now whether they really enforce that, I cannot say.
Below you will find the NYS Office of General Services Security Solution contract number and the list of all the Security Manufacturers that Axinter has position to sale direct to all NYS & NYC Agencies and also position themselves whereas no one can voucher or qualify there Security contract direct sales.
BELOW IS ANIXTER NYS SECURITY CONTRACT NUMBER AND THE STATE SECURITY CONTRACT WEBSITE THAT VALIDATES ANIXTER SECURITY CONTRACT:
This is a contract that many System Integrators like myself are up against with Anixter and I still can't understand the logistic as to why Anixter would position themselves to sell directly to the "END USER" and put us integrators in a position where we can't be competitive with and another way that they position themselves to sale directly to your end-user is when you provide your customers information via any project registration, so unless I really have to purchase from them, that would be the only reason they get my business.