D&H co-President Dan Schwab was in attendance at the Toronto show and gave his views on the event and their Canadian business in general.
MISSISSAUGA – On Wednesday, 41 vendors and over 400 resellers flocked to the Mississauga Convention Centre for D&H Canada’s Toronto trade show, to hear D&H co-President Dan Schwab give his assessment of the company’s situation in Canada, and to see if they were among the winners of $10,000 in prizes. Ten partners who ordered $1000 or more in qualifying merchandise from D&H over July and August were selected in a random draw.
The show is larger than last year, and while the improved Canadian economy – up 4.5% in Q2, the strongest in six years – doesn’t hurt, the strength of the economy doesn’t significantly impact D&H’s position around these kind of events.
“You always have to be investing for the future,” Schwab said. “We are old school. This business is relationship driven. The shows are where we break bread and get to know our customers, their spouses, and their business. They see that we aren’t just a call centre.”
“We only launch one or two major new vendors a year,” Schwab said. “We handle the training as if we were the manufacturer and we want to be sure we don’t dilute our efforts.”
D&H, in its 99th year of business in the U.S., is now approaching a $4 billion business, of which $300 million comes from Canada.
“It’s not rocket science what we do,” Schwab said. “We aren’t building a better mousetrap. We take care of the customer, take care of the vendors and take care of our employees.”
Schwab told an assembly of the vendors attending the show that their business model has been enormously successful in Canada.
“When we arrived in Canada ten years ago, a CDN [Computer Dealer News] article quoted another distributor saying that Canada was overdistributed, and that we would leave Canada with our tail between our legs,” he said. “There were a lot of distributors – but not the right distributors – someone who did the heavy lifting to create demand for small business. That’s why we have done over 20 per cent every year since we have been in country.”
Schwab elaborated to ChannelBuzz why D&H is able to post high profits working with smaller resellers that some other distributors tend to see as net drains on their business.
“We are able to be successful in this market because we have a different go-to-market strategy,” he said. “The larger distributors tend to do very large deals at incredibly low margins – so their services and pricing for small business are different. This is where we live and breathe. We have helped small businesses sell to more advanced users, train them to go from the 50 seat opportunity to 250 seats. That earns their loyalty and we do a much higher percentage of the business with them.
“Many distis are like a supermarket,” Schwab continued. “They offer everything to everyone. We offer best of breed brands to small business resellers. Our sales reps are much more up on those specific techs – because they are selling three things instead of 15. The resellers then lead with those vendors and we become the beneficiary.”
Schwab also stressed that their sales reps work differently than is typical in IT distribution.
“70 per cent of our business comes from outbound sales calls,” he said. “The industry average is 10 per cent. We aren’t an order-taking organization.”
Schwab also emphasized that D&H has a different sales philosophy than the broadline distributors.
“They are deep sea fishing, going for the big fish,” he said. “We would rather sell five units to 1000 customers, than 1000 units to five customers. That’s why engagements and relationships are so critical for us. At these shows, we fly up our inside sales teams to meet with customers for over three days. We offer 6-8 hours of free training for our resellers. We also do smaller breakouts where they bring technical people and we train them in 2-3 hour sessions. The pre-sales support is all free. It’s our job to train customers, to give them the tools to go to their end-users.”
Schwab noted that earlier in the day, he had been at a Meraki training session at the show where 150 sellers had attended.
“For pure efficiency, these shows are one of our best messaging tools – this and webinars,” said Greg Tobin, D&H Canada’s general manager. “Everyone in this business wants to call themselves technically proficient, but we can all learn a little more, and that’s what this is all about.”
Earlier this year, D&H opened its first office on the west coast in the Vancouver area, which was an immediate success, with over 400 active resellers in the first 90 days of business.
“Having the west coast coverage was a missing piece of the puzzle for our North American strategy,” Schwab said. “It used to take us four days to service a customer in western Canada. Four days as part of a project can be fine. But there are always parts of an order that need to be expedited, like when something breaks. Now we can take an order at 530 pm and deliver it the following morning.”
Schwab noted that distribution in North America has seen some consolidation with Avnet and Westcon being bought by Tech Data and Synnex respectively, but that there had also been new entrants, mainly riding new opportunities created by the cloud.
“Historically we want to be at the leading edge in bringing in new techs, and have been first in things like the Internet of Home Devices,” he said. “You have to invest for things which will be strong in the future. However, we play with our own money. Sometimes we may invest later, but then do it better. That’s what we have done with cloud – and uniquely tailored it to the small business reseller.”