VAD Sales secrets

Vendors and channel partners are demanding much more from the ‘new age’ distributor, the spotlight is on these middlemen in the IT supply chain to prove their worth

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VAD Sales secrets DR Ali Baghdadi, president and ceo, Aptec holdings group
By  Manda Banda Published  May 16, 2012

Vendors and channel partners are demanding much more from the ‘new age’ distributor, the spotlight is on these middlemen in the IT supply chain to prove their worth. Just how are regional distributors coping with the new challenges and what is the next big channel opportunity in value-added distribution selling in the region?

Distributors in the Middle East region have been talking about value-added services for quite some time now. Many agree that it’s the only way to survive in the emerging highly competitive scenario. But most channel partners hold a different view and argue that value-added distribution is hardly visible, except for a select few distributors who have developed this model. Many channel partners claim that most distributors do not provide any value-addition to the hardware and software products they sell to the channel.

And while most distributors do have service centres, provide quality products and services, supplying high-quality products and service reliability is no longer enough. Both IT manufacturers and channel partners are demanding much more from the new age distributor. So what does value-addition mean in the current sense of the term?

Dr Ali Baghdadi, president & CEO Aptec Holdings, said a distributor is an essential link in the supply chain of IT products and services. Baghdadi said distributors always have to adapt with changes in products and their optimal supply route to market.

Consequently, said Baghdadi, the distributor’s role may combine elements from different functions, such as: logistics, marketing, technical pre-sales support, technical post-sales services, telesales, field sales, channel marketing, end-user pull, break and fix services, research and development (R&D), hosting, finance and credit, and geographical coverage. He said no one company can do everything, but what is vital is that the distributors must choose the path that’s suitable for their business model, skill up and be best-in-class in what they do. “This will depend on the products and solutions being carried,” he said.

Baghdadi added that value addition means providing an edge to a product in the form of technical services or additional technical features, which create additional profit opportunities to the reseller and an enhanced solution to the end user. He said in order to achieve this, a value-added distributor (VAD) must invest in technical expertise that can deliver pre- and post-sales services, or invest in technology development capabilities that can enhance the products being offered. “VADs sell solutions through value-added resellers (VARs) aimed at businesses and the commercial sector,” he said.

Aman Manzoor, channel sales manager, Kaspersky Lab Middle East and Turkey, said VADs could enhance the vendors’ offerings to the channel by accentuating the various programmes launched by IT manufacturers to the channel community. “I have to commend the role that our distributors are playing in today’s marketplace. We appreciate our distribution partners’ efforts and support they provide to the channel,” he said.

Like Aptec Holdings, Redington Gulf has become increasingly involved in the VAD business model and has set-up a dedicated division to manage its value solutions offering to partners across the Middle East region.

Ramkumar B, vice president, Redington Gulf-Value Division, said: “VAD within the IT space is an evolutionary concept which is expanding its scope over time. In a broader sense, any activity in the channel that requires a service beyond logistics and credit facilities or lines, could be considered as adding value.”

Today, said Ramkumar, distributors are adding value through pre-sales services, marketing consultancy, channel enablement or even providing post implementation services to their reseller partners. “With new technologies coming, we may see a lot of innovation within the VAD space in the region, which could look different from the current distribution models used widely now,” he said.

While many distributors in the region have similar approaches to how they define and approach their value adding strategies, WestconME Group has taken its own path.

Steve Lockie, managing director, WestconME Group, Middle East & North Africa, said value distribution at Westcon defines clearly what products, tools and services are available and match these to the individual partners’ needs.

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