Tech Data boosting Saudi service

Next day delivery service from Bahrain hub aims to bring distributor even closer to resellers and build customer breadth in the Kingdom

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By  Stuart Wilson Published  June 28, 2004

Tech Data is developing a next day delivery service into Saudi Arabia based out of its Bahrain hub. Working in conjunction with logistics partner Aramex, Tech Data hopes that the improved delivery times will expand its customer base in the Kingdom. Adnan Al-Falah, managing director at Tech Data Middle East, said: “We are currently evolving the services from our hubs in both Bahrain and Jordan. We have managed to facilitate a process with Aramex to offer next day delivery into Saudi Arabia although some limitations still exist in the model. By offering this service we will be able to spread our customer breadth a great deal wider in Saudi Arabia than it is today.” “By doing this we can help the channel move away from the trader mentality where someone from Saudi Arabia comes to Dubai, does a deal in Jebel Ali, takes product out and ships it into the Kingdom, sell the product on to resellers who then sell it on to end-users,” added Al-Falah. “That is the inefficiency of the current channel model that we at Tech Data are trying to take out of the system by making these strategic investments in building up our hubs in Bahrain and Jordan. It will allow us to serve the small and medium sized in-country resellers and move the channel away from big stocking deals being done by companies not truly focused on IT distribution.” Tech Data’s drive to improve delivery times into major markets such as Saudi Arabia will play a critical role in building direct links with small in-country resellers. As major distributors pursue this path — frequently with the support of their major vendor partners — the channel becomes more efficient. A classic two-tier channel of distributors selling to the resellers serving end-users puts pressure on the extra layer of sub-distributors, traders and wholesalers currently occupying channel niches in the Middle East. This channel evolution will take time and much depends on distributors’ ability to provide value-added services that differentiate them from sub-distributors. “Resellers need credit with a supplier,” added Al-Falah. “They also need a supplier who can sell them what they want, not what he bought.” Speedy delivery appeals to those resellers selling fast moving IT goods and looking to keep minimal inventory on site. Tech Data’s logistics boost will target these customers in the Kingdom.

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