Wholesale Distribution
Distributors serve several purposes. Vendors use distributors to warehouse and balance inventory between resellers (i.e. CompUSA returns inventory to their distributor after taking down endcaps and it gets sent to
Fry’s). Vendors also don’t have to extend credit to as many resellers if they use distribution; they send inventory to the distributor and bill just a few distributors instead of hundreds of resellers (who often
require credit terms).
The disadvantage for vendors is that distributors increase costs 3-10 points (not the same as margin, but similar) and vendors do not always know which resellers are purchasing their product (the national resellers
will tell them, but they don’t know about all the independents and regional resellers). As a result, they must rely on the distributors to help them promote to part of their existing reseller base. Distributors also
request co-op and mdf funds so they can participate in promoting your product, and they sometimes setup terms that are not always advantages to the vendor.
Resellers like distributors since they have fewer places to order product (they can contact 2-3 distributors, instead of hundreds of vendors), plus it is easier to link their accounting and inventory systems into a
few distributors, than all of their vendors disparate systems. Distributors also help finance inventory. Resellers can often buy on credit (accounts payable terms)--hoping to sell the inventory and collect from the
end user, before it is due. Some distributors also provide value-added services; some help resellers with marketing, training, additional financing, promotions, inventory balancing, alliances, etc.
Following are the major North American high-tech wholesale distributors:
- Ingram Micro. 800-456-8000. They are the world’s largest wholesale high-tech distributor.
- Tech Data. 727-539-7429. Used to concentrate on VARs. Now universal.
- GE Access. 1-800-733-9333. GE is a relatively new technology distributor, but they always aim to be #1 or #2 in their markets.
- Merisel. 800-637-4735. Used to be the 2nd largest distributor. Not a major player anymore and are reducing their assets.
- Douglas Stewart. Distributor for schools.
- Navarre. Distributor for Staples and other office locations.
- Infogrames. Games distributor. Now Atari.
- Visco Entertainment. (888)291-1900. Entertainment distributor.
- EduTech.
- Dr. Bott (Mac Only)
- D&H Distributors. Handle PC, education, Home Entertainment , Security and Government products.
- Activision Value. Games distributor.
- Triad. Canadian distributor.
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