Was a time when a wide selection of products, good prices and fast delivery were all the attributes a wholesale security equipment distributor needed to build and maintain a loyal base of installing dealer and integrator customers. No more. Commoditization, competition and economics have conspired to make those qualities mere starting points in the distribution conversation.

Today, distributors must go above and beyond to provide an array of additional services that enhance the customer’s value proposition and help ensure their success. These value-adds include premium customer service and after-the-sale support; flexible delivery mechanisms and payment options; online ordering and account management; technical and business training; system design and project bidding expertise; marketing tools; financial assistance; and even special events, loyalty programs and giveaways. At the same time, distributors must also keep their suppliers happy lest they circumvent wholesale distribution and sell direct.

To fully assess this state of affairs – the dynamics, challenges, key trends and ramifications for dealers and integrators – SSI interviewed representatives from the industry’s leading distributors. They are: John Sullivan, vice president of sales, ADI; Jim Ricker, vice president of marketing, security solutions; Karl Griffith, director, Enterprise Market, Graybar Electric Co. Inc.; Tony Sorrentino, vice president of sales, ScanSource Security; Jay Stone, vice president of sales, Systems Depot; Pat Comunale, COO, Tri-Ed/Northern Video Distribution; and Vic Korhonian, president, Video Security Specialists (VSS).

What are your top-selling product types this year, and what others do you see coming on strong?

John Sullivan: Video surveillance products continue to remain strong. The IP market has been growing as the need for networked security environments and central control and management continue to become increasingly important. Lower total cost of ownership has been helping to drive growth as it makes IP solutions more viable in smaller installations. Also, dealers are installing more to support home networks as more and more solutions are beginning to reside on the network.

Jim Ricker: As expected, we see growth in the network video space. IP cameras, encoders, storage products and video management solutions are areas that we see as great opportunities over the next few years. Customers are looking to understand how these products can be implemented and how they can assist in addressing their organizations’ current challenges and needs.

Karl Griffith: The surveillance camera segment is Graybar’s largest growing security products area. IP is the core of our surveillance offering and we continue to see those solutions grow. We also see access control and notification as growing areas as these solutions become more IP-enabled.

Tony Sorrentino: IP cameras, specifically megapixel IP cameras, are doing very well. We are also seeing great interest in wireless products – mesh networks, point-to-point and point-to-multipoint.

Jay Stone: Burglar alarm and CCTV. We also see access and IP products gaining some momentum.

Pat Comunale: The IP video category has been a strong performer this year. Through our IP training program and support teams we are keeping the dealer-integrator network current with the latest technology. They in turn will be able to sell these products to their customers.

Vic Korhonian: We have seen a substantial increase in sales in IP/megapixel cameras and all the related products to complete a turnkey solution. Examples would be NVRs or network surveillance systems both in SMB and enterprise level.

Which product types are underperforming and why?

Sullivan: The wire market has not been performing as well as we would like it to due to the slow recovery in the new construction and residential housing market, and the inconsistency in copper costs. The residential A/V market continues to remain soft as consumer confidence is just beginning to improve.

Ricker: I’m not sure that you would call it underperforming, but we are certainly seeing the traditional analog security market beginning to flatten. There is still a large market out there for analog, but the transition to IP is clearly taking place.

Sorrentino: IP solutions are continuing to have strong growth in the security market, as are analog solutions but at a slightly slower rate.

Stone: Structured cabling and entertainment. Both categories are directly related to the new construction/housing markets, and we all know what those numbers look like.

Comunale: The product segments having the most difficult time are those associated with new construction. Examples would be home theater, pre-construction projects, etc. Until new construction starts to pick up, those products will continue to lag behind the market.

Korhonian: I have not shared the same type of enthusiasm in regard to our intrusion sales. I believe our focus and energy has always been what we do best as our name, Video Security Specialists, indicates. Nevertheless, we are actively working to provide our loyal customers with an innovative comprehensive intrusion line we expect to have available in the fourth quarter of 2010.

What value-added services are you offering?

Sullivan: In addition to the 100+ conveniently located branch locations, ADI offers solutions from over 500 manufacturers and has more that 150 million products  in inventory. Along with a knowledgeable sales team to assist dealers, ADI has a systems sales & support team to help design installations and quote projects. At the branch level, ADI offers quick pick services and pick-up anytime rooms to help dealers easily get the solutions they need for each job.

ADI also offers numerous training opportunities across the country, including the Expo Training Series events, Electronic Security Association [ESA] courses, NICET training, IP training, CEDIA courses, Webinar training, branch counter days and more.

Ricker: Anixter offers a wide variety of value-added services ranging from simple methods of deployment to complex supply chain solutions. Most of these services are not ‘off-the-shelf’ offerings but are developed in conjunction with the customer in order to understand specific needs and challenges. The resulting service offering improves project efficiency and provides a lower overall cost of deployment.

Griffith: One example is Graybar Financial Services, which provides competitive, value-added financing solutions that support facility improvements for energy efficiency and enhanced voice, data and security systems. Leasing is a vehicle that Graybar’s integrator customers can use to help provide technology to their respective customers who may not have a technology upgrade in their capital expenditure budget.

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