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Is the Internet Your new Distributor?

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For many years now, MSP’s and IT companies have been price-comparing distributors with Internet sources for goods to provide to customers. This practice has led some to completely walk away from distribution, where others have stayed loyal to their respective distributor.

With hardware sales becoming less of the MSP business, it is fair to question whether MSP’s still see a value in distribution? Most distributors discount based on volume, which may mean that MSP’s are less likely to compete with online resources. Considering that even box retailers are struggling to compete with online retailers this seems like it would be a fair assessment.

There are however a number of advantages that distributors provide over online retailers. They provide incentives, can facilitate MDF funds from manufacturers and vendors, they provide a single resource making invoicing easy, generally provide credit options and terms, as well as provide a dedicated personalized team to work with.

For some these advantages are worth the lower margin. Those that argue in favor of distribution would say that it ends up working in their advantage in the end. This statement holds some weight when you consider the potential issues with returns, shipping costs, and time spent dealing with issues.

On the other side, those in favor of Internet resources would have a similar argument. Many distributors have very strict 30day return policies, at times charge for return shipping and may require restocking fees. If there is a significant savings on purchases online, the subsequent difference may be slim.

Distributors are finding new ways to keep MSP’s and IT companies engaged in their programs. This includes creating cloud and service based products, mobile solutions, and partnering with vendors to provide better pricing on products.

As long as distributors continue to provide value added resources, they are a worthwhile relationship. The best method is to utilize quoting tools that will help to find the best deals across distributors and online resources. This will provide the best advantage to make the right choice and get the best margins out of any sale.

 


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