The distribution in IT business is evolving along with the changes taking place in the technological landscape and business dynamics. The distributors have to revamp their distribution strategies according to the changing conditions to boost sales. Today, the buzz word is Value Added Distribution (VAD). To survive and thrive in the present conditions of high competition and shrinking margins, distributors have to do value addition. The days of box-selling are gone. A VAD has to be a consultant, trainer, project implementer, provider of pre-sales support and after-sales support to the System Integrators (Sis). They have to act as bridges between the OEMs and the SIs. Those who are focused soles on box-selling and pushing products could no longer able to survive. This discussion focused on how value added distributors work, overcome challenges and grow successfully.
Moderator: Mr. Sukanta Dey (A senior ICT Industry expert & veteran)
Panelists Participated: Mr. Debraj Dam, Chief of VAD, Supertron Electronics VAD; Ms. Garima Mishra, Sales Head of Apple India, Redington Ltd; Mr. Gaurav Ranade, CTO, RAH Infotech; Mr. Sewak Nautiyal, MD & Founder, Spark Technologies Pvt Ltd; and Mr. Satish Arora, Sr. GM – Sales & Operations, Savex Technologies Pvt Ltd.
Moderator: Mr. Sukanta Dey (a senior ICT Industry expert & veteran)
“When it comes to distributing normal products, they are just supplied by the national distributor (ND) thorough the state level distributors and other layers to the end customers, but when the ND distributes complex tech products, he has to impart the knowhow about the products to the partners down below and educate them so that they can help the end customers how to deal with the issues that might arise. A VAD also should take care that his products and most importantly services are reaching the partners in the smaller towns, in addition to larger towns. This value addition differentiates the Value Added Distributor (VAD) from the normal distributor. I pass on the discussion over to the eminent representatives from the leading distribution companies sitting here with us.”
Panelist: Mr. Debraj Dam, Chief of VAD, Supertron Electronics, VAD
“Distribution work on two different dimensions – value-addition and volume. The ND is the bridge between the OEMs, the SIs and the end customers. A VAD, unlike the regular distributor, needs to be a consultant—he should educate the SIs and others in the supply chain what the end customers need to know while using the complex tech products, give demos and even help them implement the products. The VAD also needs to help the partners understand the TCO, ROI and other financial or operational factors. In some cases, we helped the SI partners to digitize several hundreds of classroom with effective hardware and much lesser prices than those being provided by others.”
Panelist: Ms. Garima Mishra, Sales Head of Apple India, Redington Ltd
“The VAD has to add that value which will enable the product and its technology to reach the partner and then the end user and satisfy his need. It happens when the VAD adds the right value to the products and solutions and reaches them to the end users through the partners. To put it in simple terms, a VAD has to fill up the gaps which the OEM could not fill in terms of tech knowhow, pre-sales and post-sales support and sometimes credit support. We also help partners with CRM and stock management. On one occasion, we met a partner and told them we expect him to reach Rs. 1000 Cr turnover in 4 years which he did not believe. We helped him reach that figure in 3 years time, and he was so overwhelmed by this unbelievable success, he personally thanked us for the education, management support and encouragement we gave him. Apple may be a great brand, but if it does not reach the end user, it makes no sense. Another factor we at Redington keep in mind is our partners gain on both bottomline as well as topline. Different kinds of products have different margins and different types of demands. We keep this in mind before we set short-term and long-term objectives to our partners, and accordingly we give them education and support.”
Panelist: Mr. Gaurav Ranade, CTO, RAH infotech
“Nowadays, it’s more Solution-Centric than product-oriented. So educating the partner how to integrate the products & services is important.
Educating partners on integrating products and services is crucial, as is sensitizing customers to potential issues and their resolutions. This education is vital for creating and retaining demand. Value-added distributors must act as trusted consultants and effective providers.
At RAH Infotech, the ecosystem enables them to reach system integrators (SIs) in remote towns, supported by service centers across the country. With state governments focusing on developing these areas, RAH Infotech is well-positioned to extend their reach. As India’s leading value-added distributor and solutions provider in the Network and Security domain, continuously introducing cutting-edge technologies to the market. The company ensures their products, services, and technology evangelization extend to even the most remote locations. Ranade highlights that India is undoubtedly developing and growing, and RAH Infotech’s comprehensive approach aligns with this growth trajectory.”
Panelist: Mr. Sewak Nautiyal, MD & Founder, Spark Technologies Pvt Ltd
“Initially, we started as a dealer in 1990s. At that time, dealers used to get the products from the ND and sell them to SIs, and there ended the dealer’s job. Over time, distributors grew more resourceful, started dealing directly with the Sis and other bigger customers eliminating dealers and sub-distributors in the chain. This compelled us to transition into a VAD from being a sub-distributor. Today, it is from ND to SI to end-customer directly, with no other levels in between. As VADs, we have to be consultants, give demos to SIs, give SIs demo equipment so that they can demos to the customers, give them the pre-sales education, see that the products are installed, projects are implemented, run as planned, post-sales support and then manage the accounts receivables.
Panelist: Mr. Satish Arora, Sr. GM – Sales & Operations, Savex Technologies Pvt Ltd
“Today, a lot of SI partners are adopting new technologies. As VADs, we have to educate the SIS and assist them in funnel creation and enablement. Pre-sales, project management and post-sales support to SIs have become indispensable actions for the VADs to be successful. For large transactions, most SIs need leasing and credit support. We at Savex try to provide the best possible financial assistance, besides other forms of assistance to our partners. To put it in a nutshell, a VAD today should provide end-to-end support to the partners in terms of pre-sales, training, managerial and post-sales service support.”
To Sum up
Today, several layers that used to exist in the distribution chain are getting eliminated. It is now direct from the ND to the SI to the end client. To be successful, a VAD has to be a consultant, educate and assist the SI partners on adopting new technologies and in funnel creation. An SI has to provide SIs the knowledge of new technologies, pre-sales, management and post-sales support. For large transactions, SIs also should be provided the leasing and credit support.
Covered By: NCN MAGAZINE / Value Added Distribution
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