Do Not Trust ADI For Product RecommendationsBy John Honovich, Published Aug 27, 2021, 09:29am EDT
Do not trust ADI for product recommendations. While they are arguably security's best box mover, they are also arguably the worst distributor for product recommendations.
This debate flared when community members called for a security integrator to be banned, as the clip below shows:
However, the integrator told IPVM that he trusted and believed ADI's recommendation:
we buy so much equipment from ADI. [ADI] said that they had a whole lot of Hikvision. And that they were selling a whole lot of Hikvision for this... So Hikvision apparently was selling quite a bit out of ADI. And that's, of course, our main supplier, and we trust them and believe in them
Many online argue about who would trust ADI for product recommendations but this $500,000 deal underscores that many big purchases are made based on ADI's recommendation.
Inside this note, we examine what ADI is good and bad at, what various industry professionals have to say about the issue, and the risks for security system procurement.
Strengths of ADI
ADI does many things well, even exceptionally. They have the most local branches. They have lots of stock of the products they sell. They carry a wide array of products. And ADI does not make many mistakes in moving boxes.
ADI surely knows this as well. Anixter, now Wesco, the next closest is hardly a threat, and most every other security distributor is far, far smaller. Everyone has to buy from somewhere and ADI is the most common place to buy.
ADI has market power.
Problems of ADI Recommending Products
All distributors have fundamental risks in recommending products but ADI's approach amplifies it. By design, ADI will rarely ever recommend products they do not carry and ADI frequently recommends products where manufacturers will give it the steepest discounts or rebates (e.g., historically Hikvision). This is fairly typical.
What is atypical is despite ADI's immense size ($3 billion a year and hundreds of millions in profits), while they have the resources and scale to actually understand what products work, they do not have the culture to prioritize this. Their management hires and their e-tailing promotion tactics are about maximizing immediate revenue. It leads them to deceive customers with risky moves like secretly relabelling NDAA-banned Dahua in 2021 and pushing fever cameras in 2020 to customers like the Georgia integrator.
Ongoing LinkedIn poll voting results show that most do not trust ADI for product recommendations:
Profitable For Ignorant ADI Customers
Even if statistically most do not trust ADI, still that leaves hundreds of millions of dollars of deals where ADI can drive the product selection. The Georgia integrator claimed he did not know Hikvision's relationship with the PRC government in mid-2020, which makes him amazingly ignorant for a professional in this industry. However, he is surely not alone, ADI has tens of thousands of customers and surely many dealers are like him, looking for ADI to recommend products.
For ADI, this likely works out well. They are so big, that most dealers will still buy through ADI for the box-moving advantages, even if they do not trust ADI for product selection. At the same time, those that do trust ADI, allow ADI to make even greater profits.
Former ADI Person Comments
A former ADI employee emphasized that many dealers do expect ADI to design their systems:
I used to be “ADI counter person” and the amount of high-level technical knowledge the customers expected me to have on dozens of brands was mind-blowing. Corporate expects you to be a high-volume box mover, the customer expects you to design their systems, and you get stuck in the middle.
Adding that most of their customer base was effectively trunkslamming, switching from product to product based on what ADI put on sale:
One of the reasons I left distribution was 95% of customer base was focused exclusively on price. I was spending my days doing camera quotes in 3 different brands depending what was on sale that month.
Most respondents, though, emphasized that integrators should be responsible:
Any integrator, true integrator would know that and do his own homework on products before making that size of a selection.
I don’t know this mom and pop “security” company per se but if you had a true national integrator yeah relying on ADI recommendations alone is problematic as a true integrator should have consulting and design in house
ADI moves the boxes in this situation. All on the integrator for using HIK in the first place. Plus, why would ANY distributor say no to a 500k deal
Integrators fault for not doing their research and trusting a company who's sole job is to sell equipment.
To get the prices down, requires not paying there staff enough to where they soon leave. Anyone in the industry knows the talented distribution employees leave to take factory jobs. To trust your business to a counter person at an ADI is foolish....
Distribution companies tend not to have high level expertise. Manufacturers reps tend to offer a solution that includes all of their solutions that could be used. I never use these sources or even the manufacturers for a complete system design. I want to know and understand the solution and be responsible for the design vs. getting a BOM and not knowing how and why it works.
You have to be an educated customer to shop at ADI. Know what you want and why. Then they will get it for you. That integrator is responsible for his decision on tech.
Challenge for Integrators
The challenge for integrators is that it is hard for most to have the time, energy, and expertise to figure it out on their own, making asking sellers like ADI an expedient, if risky, tactic.
Question: How can we or others help integrators make better product selection decisions?
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