For the last few months there have been ramblings in the channel partner space. Especially in sub-distribution where the margins have thinned and many vendors and even some national distributors have been trying to go directly to the consumers. Things certainly did not look too rosy. With this backdrop we at The DQ Week decided to organize the Disti Summit.

The idea was to provide a forum of interaction between sub and regional distributors and vendors, with us acting as the third party facilitator. The response to the concept initially was skeptical-–what would we do there? Will it make a difference? How would sessions that you have organized help us? The queries were many and at that time the answers were few. Sometimes it made one wonder if we would be able to answer any of the queries.

Now that we have just done the first summit in Hyderabad, the post event response from the participants, has vindicated our stand that sub-distributors are vital for the IT channel space. Not only that at some level we were able to provide some insights into what can be done to better the business and how can that be achieved without major changes. The response to the keynote by Jitendra Kulkarni, or JSK as he is commonly known, was amazing.

Shivangi Yadav

Let me share some of the learning's from the session. First and foremost JSK reiterated that despite what the naysayer's might lead you believe, sub-distribution, as a model is not going to perish any time soon. It might require a bit of tweaking, to go with the times but as a model it is here to stay.

Firstly and most importantly the sub-disti needs to control credit and make sure policy enforcement is happening regularly. If payments are overdue or products are lying unused then you have no one but yourself to blame. Earlier the distributors sustained financial viability because of high growth rates and relatively higher margins, which is no longer true.

The best thing in these times is to have a broader product portfolio. Even when one vendor is giving you great business, keep on adding products and other vendors. Also keep looking for alternate business models. Scaling up business is another option as is expanding in adjacent industries like telecom, consumer electronics, white goods and mobile devices. And with the world embracing retail, why don't you do the same.

The one takeaway is that there are always options for doing better and don't give up on sub-distribution because as a business model it is here to stay.

shivangiy@cybermedia.co.in