Manufacturers Sound Off On DistributorsBy John Honovich, Published Aug 12, 2015, 12:00am EDT
Integrators, you think you are upset with distributors?
That's nothing compared to manufacturers.
Here is a representative quote of their feedback to IPVM:
"Overall, they are all a disappointment. They talk about adding value, being solution-driven, but in reality, they are merely box movers and ambulance chasers. Always have their hand out after they hear a deal is won, and want to know how we are going to cut them into the deal. Yet, they love charging for marketing programs, roadshows, etc. as marketing is a profit center for them."
In this note, we share survey results from 50 manufacturers about their experiences and problems working with distributors. We conclude with their choice on worst and best distributor.
Poor Product Knowledge
The most common complaint was lack of knowledge, placing the burden back on the manufacturer to both inform and support:
- "The biggest issue is their lack of concrete product knowledge. They are jacks of all trades but masters of none."
- "Lack of Product Knowledge (salesman). Most do not offer tech support. At the end of the day if I have to figure out all, why do I need a middleman?"
- "Not being knowledgeable on the product lines they carry"
- "Distributors that do not know the product well are always causing headaches for our support team when things do not run as expected."
- "Selling the wrong product for the application due to a variety of reasons such as lack of training in security design or selling to sell..."
- "They don't understand technology and even if they did, they don't/won't take the time to explain it to whomever is purchasing the product."
- "Physical Security Distributors: Not able to really support the new IP world (if they do it is one really smart guy in the whole group)."
- "Regardless of how much time a manufacturer spends at a branch, the account managers (who tend to be very young and inexperienced in sales, let alone video surveillance best practices and techniques)quickly forget or are immediately disinterested in what information you are presenting to them regardless of if there is a benefit to them. They are all too concerned with getting back to their desk, but are very happy to eat your free donuts!"
One manufacturer had an interesting counter argument - manufacturers simply need to lower their expectations:
"If one accepts that Inventory/Credit/Logistics are their strength and anything beyond that is a bonus then you're unlikely to be disappointed. It is high volume relatively low margin business and as such the caliber of talent is paid within those parameters. The expectation by manufacturers that distributors should know their product forwards and backwards is unrealistic given the number of SKUs, let alone the relative time they are trained on each product line."
On the other hand, since most distributors market their expertise, many are not living up to their own billing.
No Value Add / Box Movers
Manufacturers repeatedly labelled distributors 'box movers' who do not add value:
- "Distributors don't want to be called box movers, they should stop acting like that is all they want to do. They want to control the sale process but add very little value to that process in most instances."
- "It is difficult to know what value they are adding if they are just box shifting and not providing training or technical support"
- "Most simply are box movers that bring little value beyond local stock and being the bank for vendors. Pre and post sale support are typically limited, which forced Manufacturers to do the heavy lifting"
- "Most of them are just box movers and do not provide customer service like first line of support. Most of them simply rely on manufacturer work"
- "They work with very opportunistic approach and don't add value to the chain."
- "They are box movers. I did a report 2 weeks ago on all deals closed recently and - to my surprise - over 95% of them were brought to the distributor and not coming from them."
Worst - Anixter
Like our integrator survey results on distributors, Anixter did the worst. However, the ratio of negative experiences for manufacturers was even greater than that of integrators:
- "Worst: Anixter - arrogant, hard to deal with, different offices operate very differently"
- "Anixter is by far the most frustrating. They demand crazy margins, want existing business transferred to them while funding their margin, set high expectations of their value, and invariably disappoint on delivering that value."
- "For me personally Anixter is probably the worst and the best. They have the most potential, which is great when it goes well, but also seem to be the laziest."
- "ADI & Anixter types more interested in selling something, anything."
- "Small and regional are becoming the best Partner. Definitely the worst is Anixter."
- "The worst I would have to say, unfortunately, is Anixter. Their sales people are inexperienced, are seemingly only interested in taking orders, and are very quick to throw the manufacturer under the bus for their lack of proper inventory management."
- "Anixter seems too big to know what's going on with any other part of Anixter."
Tri-Ed, who Anixter acquired last year, did notably better than their parent company, as one manufacturer noted:
"So far, in my experience in my territory, the best is Tri-Ed. Pre-merger Tri-Ed specifically. They have a more seasoned sales staff that is willing to work with you. The worst I would have to say, unfortunately, is Anixter."
ADI fell in the middle, with some praise, like so:
- "Best - ADI Product specialist teams and good support from management down."
- "ADI - Easy and local access to commonly used products stock"
- "ADI seems to be the most savvy about inventory management and credit for customers."
However, with a similar number of objections:
- "ADI - Worst - no desire to learn about manufacturers or their products"
- "ADI are all order takers and discounters. Very little value added to a project."
- "The worst: ADI usually the highest price with limited inventory in the branch"
Best - Scansource
Like the integrator survey results, Scansource was, far and away, the best rated by manufacturers surveyed:
- "Scansource - they understand true value a systems integrator brings and stay way from the end users"
- "Best: Scansource - extremely easy to work with, great internal systems"
- "ScanSource and Wynit are the best by virtue of the support they provide and ownership they take on."
- "ScanSource is the best, they have respectable markups and they are easy to work with on projects."
- "Scansource is the best because they stock everything and their ordering process is fast/efficient. I never heard customers complain about scansource."
- "The best: Tri-Ed and Scan Source. Their people are knowledgeable about the products. The also really compete for the business"
- "Best big distributor was probably ScanSource in terms of their efficiency and willingness learn the products they were selling."
Smaller Distributors Generally Praised
Though too small to get many mentions individually, smaller distributors generally were more praised versus their larger counterparts. The common theme was that smaller distributors knew more about products and/or worked harder for manufacturer business.
Opening for Amazon
Given that sellers (manufacturers) and buyers (integrators) both have issues with large distributors and the lack of value provided, we see an opportunity for Amazon (who is expanding into business sales generally) to grow in the security industry. If you are going to accept that most distribution is just box moving, you might as well go to Amazon who is great at it and does it with lower costs.
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