Distributors Push Past Margins
The wholesale distribution channel essentially serves as a frontline in the dynamic electronic security industry. Executives from leading distributors discuss market conditions and their role in providing value-add services to their integrator partne
Talk about tradition. The connection between the installing security contractor and the wholesale distributor is steeped in the things that foster long-standing, mutually beneficial business partnerships.
To curry an integrator’s loyal business, many distributors offer a familiar banquet of value-add services such as product and solutions training, systems design support, flexible credit terms, Web-based ordering and account management, marketing collateral, purchasing rewards, and the list goes on.
More than a convenient products depot, installing security contractors can leverage a wholesale distributor partnership to gain a competitive edge in a fast-evolving marketplace. Long a venue for training on legacy equipment and related systems, many dealers and integrators can thank their distributor for helping them transition to IP-based solutions.
Yet to paint a picture of nothing but happy campers would be more than misleading. Installing contractors must select among local, regional and national distributers to find a partner that meets their select needs and expectations. Moreover, on the national level especially, some distributors are drawing strong rebukes from the integrator community because of increasing efforts to sell directly to end users.
To gain an updated view on current market conditions, SSI interviewed executives from four providers of wholesale distribution services. Learn which product categories are selling briskly, tips on how you can achieve a fulfilling partnership, upcoming training opportunities and more.
Top Product Sellers and Laggards
Ask wholesale distributors about which product and technology categories are pacing sales – or are lagging – and a bird’s-eye view of the marketplace comes into focus.
For example, IP-based video surveillance products and solutions have become a growth leader for distributors across the board to varying degrees. An increased focus on safety and security, lower total cost of ownership (TCO), along with the need for central control and management are making networked surveillance systems a more sought-after option, according to Michael Flink, vice president and general manager, ADI North America.
“Users are getting a better understanding of the benefits of this technology and it’s really driving the transition from analog to digital,” he says. “The IP infrastructure solutions that build networked environments are also doing very well, including routers, switches, PoE products, Cat-6 wire and more.”
PSA Security Network, which operates a wholesale distribution arm with more than 200 vendor partners, lately is experiencing increased sales in megapixel cameras, video management system (VMS) software and even video analytics, says Bill Bozeman, president and CEO of the physical security systems integrator cooperative.
While many installing contractors can be rightly accused for not jumping on the IP bandwagon sooner, Bozeman says, networked solutions and the various software products that operate on them are becoming more accessible to a greater number of integrators.
“The kinks are out, the prices have dropped, the demand is there and deployment is easier and achievable by the traditional integrator,” he says.
That’s not to say distributors are banging an analog is dead drumbeat. Not by a long shot. For example, the vast installed base of legacy systems across a range of market niches remain ripe for integrators to help end-user customers migrate to IP with hybrid solutions.
“Retrofit solutions continue to do well because they offer the flexibility of updating legacy systems without having to make a major investment,” says Flink.
While some analog peripherals and coaxial cable has a place in modifying a legacy solution, one time-honored device in particular is indeed suffering from IP envy: “Traditional standalone DVRs are cooling off,” Bozeman says.
Distributors also cited access control as a product category that continues to post sustained growth as end users are increasingly mindful of security needs in a post-9/11 world. And thanks to technological advances, projects that call for integrating video surveillance and access control are becoming more accessible to smaller installing contractors.
“Video surveillance and access control products are growing segments due to the increased need for security solutions in government, education, retail and other verticals,” says Tony Sorrentino, vice president of sales, ScanSource Security.
In the residential space, home networks and home control solutions are being looked to as a future growth category as users increasingly want an integrated solution that can perform multiple functions, Flink says.
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!