February’s Business Issue of SSI features my article on what’s new with wholesale distribution (“Reeling in Resellers”) in which I interviewed representatives from a half-dozen of the industry’s leading distributors. Several of the participants went into much greater detail than the print piece allowed, so here is ScanSource Security President Tony Sorrentino expounding on a number of trends affecting the channel.
How are trends/technologies like IP, HD video, wireless, mobile connectivity, apps, integrated solutions, PSIM/VMS, mass notification, GUI keypads and cloud/interactive services impacting your business?
Tony Sorrentino: These trends and technologies continue to drive the growth of our business. Traditional security resellers are continuing to become more network savvy and increasing their overall network capabilities. Having a background in these areas also allows dealers new entrants into the security market. By having expertise in all of these technologies, dealers provide their end-user customers with one source for the products and services. It’s what we call the “one throat to choke” approach. The easier it is for an end user to do business with a dealer, the longer the relationship will last.
What is a product area or market security dealers/integrators should focus more on and why?
Sorrentino: As hardware solutions continue to move to the cloud, dealers need to be less dependent upon hardware margins and consider adding managed services to their offering. By offering managed services to their end-user customers, dealers are able to create an ongoing contractual agreement in which they remotely monitor, manage and update their customers’ technology devices, systems and services. We see new technology sales leaning towards 30% hardware, 30% software and 40% services, which are being billed on a flat-rate monthly plan. This allows end users to look at their solutions as an operating expense instead of a capital expense, providing greater budget management and flexibility.
How do you build dealer/integrator relationships so they trust product recommendations and advice?
Sorrentino: At ScanSource, we have dedicated sales representatives for our dealer and reseller partners who work closely to help our partners develop their strategy and enhance their product offering. Thanks to a limited line card of the best manufacturers in the industry, our teams spend an extensive amount of time researching, testing and demoing the products we offer, ensuring our sales and technical support teams are extremely knowledgeable about the products we offer. Our technical support team is highly trained and able to assist our partners with the majority of their product needs without having to escalate them to the vendor. We also continue to create tools, such as our Fast Catalog and SNAP app, that help dealers view our inventory and find the best product to meet their end-users’ needs.
How can security dealers/integrators combat margin squeeze and product commoditization?
Sorrentino: Providing a complete solution, not just parts of the solution, enables dealers to add more value to their end-user customers. Also, being able to offer a different brand of product or a unique solution that their competitors aren’t offering allows dealers to differentiate themselves. Adding managed services to their offering can also provide a new way of doing business and added efficiencies to the end user.
What does your company do to help dealers/integrators manage inventory and timely delivery to customers?
Sorrentino: We work closely with our dealers to understand the projects they are working on so that we can bring in inventory and hold it for them, as well as work with their purchasing teams to make sure our dealers can have the products they need on the shelves when they need them. We pride ourselves on having products in stock when others do not. In fact, we overinvest in inventory to ensure we can make that happen. Our dealers have access to real-time inventory in our Fast Catalog and receive free second-day shipping.
How have dealer/integrator ordering habits evolved, for example online vs. in person, using apps, demos, volume?
Sorrentino: Over time, more people are ordering via our Web site, but many of our dealers still want that personal interaction, and we are thankful to have some of the most knowledgeable, well-trained sales and technical teams in the industry. For ScanSource, it’s providing multiple ways to order and interact with us, so that we meet the individual needs and requests of our dealer partners.
What are the top challenges facing security distributors today? How is your company dealing with it?
Sorrentino: We work hard to ensure we have a variety of financing options to help our customers finance their projects and close their deals. We also ensure we are providing our dealers with the latest, most innovative technology solutions to best meet their needs. It’s not just about having the right brands, it’s about carrying the right products, the right inventory mix.
How do you ensure your dealer/integrator-facing personnel deliver the best possible customer care and technical service/support? How do you keep your personnel adequately trained?
Sorrentino: Our sales and technical support staffs go through nearly 150 hours a year in training, so that we can provide the highest level of service and support without having to escalate it to the vendor. Because of our centralized model, we have two offices – no branch locations – which allows our manufacturer partners to easily visit our offices and talk to our entire sales teams. This ensures ample opportunity for continuous training.
What are the biggest reasons a security dealer/integrator should do business with your company vs. a competitor?
Sorrentino: Our dealers tell us that we make it easy. We are easy to do business with, are knowledgeable about the products we offer, and have systems in place that make sure the experience goes as flawlessly as possible – from presale questions and design on through to product delivery. Another extremely important reason is the fact that we never sell to end users – we never compete with them. What’s more, we have comprehensive inventory readily available and offer some of the highest inventory levels in the industry. We also offer many different financing options to help even the smallest customer close the largest deal.