OTTAWA – Like major banks, IT distributors know that they are only as good as their latest price point.
“Once you get past the availability of the product and the price, we look a lot alike,” said Rick Reid, president of Tech Data Canada Corp., which deals with about 6,000 resellers across the country. “Therefore, it boils down to the people.”
Tech Data has started honing the talent of its people and some its VARs through its TechSelect program, an invitation-only group of 43 VARs from across the country. Each pays $2,000 a year to belong.
Their latest conference – the seventh to include Canadian members and the third solely for those members – took place last week here. Among the highlights over three days was a chance for participants to showcase various tools that they have developed to manage their operations, as well as a no-holds-barred discussion of best practices in compensation covering how much employees are paid and why.
Attendees were able to gain insight into their businesses and the markets they are trying to serve, meet with Tech Data executives and vendors as well at attend workshops to share administrative skills.
“You wouldn’t share that among your competitors in your local geography, but you would with a competitor 3,000 miles away,” said Reid.
He added the atmosphere extended well past the confines of meeting rooms, making for lively and valuable exchanges at local watering holes or, this year, a season-opening grudge match between the Toronto Maple Leafs and the Ottawa Senators. Hopefully TechSelect members also contact one another later for advice either directly or by posting a general query on the newly-launched discussion forum accessed through a restricted portion of the Tech Data Web site.
Greg Myers, Tech Data Canada’s vice-president of marketing, acknowledged that the idea of bringing the most promising resellers together is hardly original. But by combining that idea with aspects of community-based marketing, he notes, TechSelect members become well-placed to address problems and solutions in their rapidly changing field.
“They’re no longer just individuals attending a conference,” he says. “They’re members of an association with a common interest and a common focus, and likely experiencing many of the same challenges.”
Although their makeup varies significantly, the average TechSelect member has about 30 employees, and does around $5 million in business annually. What distinguishes them for Tech Data is their combined strength as a group serving much of the country region by region, representing about 20,000 accounts in all and some $350-$400 million in revenue.
“We’re looking for people who are around for the long haul,” said sales director Ed Galasso. “They focus on solutions, not just moving the boxes, and they’re well respected within the IT community.”
Tech Data is also interested in those solutions, especially when it can help them serve vendors in a marketplace where users are demanding increasing volumes of IT equipment that has had a steadily decreasing profit margin.
“Our notebook sales in units this year grew at close to 50 per cent,” Reid offered by way of example. “But our revenue – less than 20 per cent.”
Meanwhile, Tech Data continues to absorb shipping and inventory expenses, pulling in some Leading resellers in order to highlight the company’s IT distribution potential for manufacturers. For instance, the distributor might take advantage of the regional clout of TechSelect members by helping them mount sales shows with nearby resellers, reaching out to small and medium Businesses in places that might otherwise remain underdeveloped.
“It represents an ability to get that market that most manufacturers want at, the SMB, the hot market space of today,” said Reid.
