It was one-year ago this week that D&H entered a crowded distribution market in Canada, and as it reflects on the milestone the distributor says the expectations it set have been surpassed.
It was last July that D&H Distributing, a 90-year old IT distributor based in Harrisburg, Pa., announced it was coming to Canada, tapping industry veteran Greg Tobin as president of the Canadian subsidiary D&H Canada. A 38,000 sq. ft. warehouse facility opened in Mississauga, Ont. on July 8, 2007.
One busy year later, Tobin says the first year has exceeded the goals the company had set at launch. The target was 1000 customers in year one, and over 1450 were signed. And after starting with 29 vendors they now have 121, including new additions such as Linksys and the most recent addition, HP.
Headcount has also quadruped since opening day, says Tobin, adding D&H is continuing to invest in customer-focused sales and product management.
“The most incredible thing is with all the growth the team has gone through they remain focused on their jobs and their customers, and they never take for granted that customers have options where they buy,” said Tobin. “If you treat the customers well, and give them a great level of service and great value, you’ve got a winning formula.”
The year has seen a number of highlights, says Tobin, from the first day they did $100,00 in sales to their first $1 million month. Also memorable was an unsolicited customer thank-you e-mail, which he says just blew him away.
“The Cisco authorization in December was also a big moment for the team,” said Tobin. “It was an acknowledgement that we’re here to stay, and that other vendors see the value of the model.”
Looking ahead, the focus for D&H in Canada is building-out destination areas with the goal of gaining market recognition for strength in key solution areas, such as storage and networking. They feel they don’t need to carry all vendor lines, says Tobin, but they want the strong ones in each category, as well as some new and emerging technologies.
“We’re going to continue to increase our presence into the SMB channel,” said Tobin. “We believe our core competence is the smaller PC retailers and SMB resellers that target the SOHO market.”
The economy is booming in Western Canada and Tobin says while adding a western facility is in the long-term plan, it won’t be happening in the immediate future. They have hired field sales staff in the west though, he says.
“We’re actually a little surprised that the business from the West is, as a percentage, higher than we’d anticipated when we first did our planning, and it’s continuing to grow very nicely,” said Tobin.
D&H’s success has come from differentiating itself in a competitive distribution landscape with a high-touch model, and fundamental to making that model successful, says Tobin, is getting repeat and sustainable business from those customers.
“Even more important, when I talk about growing the number of customers, is continuing to have regular purchases from those regular customers,” said Tobin. “A loyal customer that purchases on a regular basis is our number one priority for the year.”
It’s about customer service
A regular D&H Canada customer since the distributor’s launch one year ago has been PC Cyber, a computer retailer with four locations in the Ottawa area. They work with all the major distributors but Laura Guillemette, a purchaser with PC Cyber, says it’s the level of service from D&H, and the fact they kept contacting them and giving them specials, that won them over.
“They were really hard-working to get our business; that was one of the main attractions,” said Guillemette. “The people that work there are really great. They’re really easy to talk to and they work hard to get us what we need. They never say no. They’re always looking to do things for us and get us the best deals.”
It’s customer service that impresses her most about D&H Canada, says Guillemette.
“They go above and beyond for us,” she said. “I think the other distributors, perhaps because they’ve been around for a long time, don’t tend to put as much care into keeping us happy. At D&H that’s their number one priority.”
While PC Cyber still works with the other major distributors, Guillemette says she’d like to see D&H bring in more vendors and products to be more competitive with the line cards of the other distributors. As D&H does add vendors, Guillemette says she’ll likely shift more of her business over to them.
“I’d like to see them get Microsoft onboard, because we do buy a lot of Microsoft products and unfortunately I don’t think they have that relationship yet,” she said.
Targeting the SOHO with HP
One of the newest vendors to join D&H is HP (NYSE: HPQ), with the recent announcement that D&H Canada will carry the vendor’s Pavilion and Presario desktops and notebooks, MediaSmart Servers and connectors, as well as monitors and accessories.
They carry Acer for the enterprise space; Tobin says with HP the focus will squarely on the SOHO market. Tobin says he sees opportunity around HP’s move from an authorization model to open distribution, a change he feels his competitors haven’t done a good job of educating the market on.
“HP has great product. It’s a great company with great programs, with the success of leading-edge technology,” he said.