True to our national characteristic, channel players are often the worst enemies of the channel. Have resellers given a thought on how much a role sub-disties and regional distributors can play in IT business? Talk to vendors like Canon and LG, and they would tell you what regional distributors have done and can do for them.
After a few years of virtual monopoly of national disties, the regional distribution model appears to be on the rise again after a period of tough adjustments to the new realities. One reason for its re-emergence has been the efforts being made by some vendors to redefine the value add to their core business.
Regional distributors have inherent advantages of a territorial exclusivity which can ensure deeper penetration for vendors, allowing them come closer to end customers in smaller cities and rural India. Needless to say that as factors like consistent programs to reach multiple towns in a region weigh in the mindset of vendors, the regional distribution model has to be preferred.
There are also other positive aspects to the model. As in the past, this model can help address specific needs of the market – for instance, striking a proper cord between the end customers and the brands and also to get a quicker feedback on product(s) and the local market requirements.
Regional disties can play quite a catalytic role in building up a brand whereas national or large distributors have seldom shown inclination or devoted time for this. In this context, it’s also proper to have sub-distributors redefine their role. Lexmark’s GM, P G Kamath, for instance, would favor sub-disties don the cap of regional distributors.
Also, sub-distributors are traditionally known for engaging themselves in fulfillment of multiple brands. Picking up utilities, packing and shipping them have remained at the core of their business and would also continue. But evangelization is one aspect they can take advantage now to reap higher margins on a limited brand profile.
The channel front is already aware of cut-throat competitions and shrinking margins. In this backdrop, it is time resellers graduate themselves as sub-distributors and with vendors coming forward with open arms sub-distributors can take the mantle of regional distributors.
After all, at the end of the tunnel, what matters is customer’s satisfaction. Whatever distribution model one prescribes to it ought to benefit the customer to ensure good and quick Return on Investments for all three players – the vendor, the distributor as well as the channel partner.
Having said all that, another truth remains that every model has its own lacuna also. In the Indian setup, when it comes to regional distribution model, poor credit standing and absence of tech expertise are twin issues which cannot be ignored and ought to be addressed properly.
This is a an opportune time for the distribution channel to reap the harvest. But it ought to be also stated that the regional distribution model is yet to mature in terms of pre- and post-sales and marketing support required by vendors.