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GTDC: Distribution the most cost-effective route to market
Organisation shares its latest report encouraging vendors to deepen their involvement with disties
The Global Technology Distribution Council (GTDC) has shared research that underlined the position of disties as the most cost-effective way for vendors to get to market.
The GTDC report, Building the optimal distribution strategy, is the latest study that the organisation has shared to illustrate the benefits of working with distribution and steps vendors can follow to improve their channel relationships even further.
The study was led by former global channel chief and partner route-to-market specialist Donna Grothjan, who was able to lean on her own experience and reach out to others across the industry to produce a guide that combined the views of both disties and vendors.
The conclusion is that it would be hard for a vendor to find a more cost-effective way of going-to-market and the value of distribution is rising as more recognise the size of the investment that would be needed if they chose to go direct or single-tier.
Having established the need for distribution, the next step that follows is the choice of partner, and the GTDC report found there were some challenges for vendors around picking the right mix of disties.
“One of the most critical responsibilities of a channel leader is ensuring their company achieves strong and profitable sales growth, and building an optimal distribution coverage plan should be a key focus of their overall business strategy,” said Grothjan.
“Successful channel vendors regularly evaluate their objectives, company characteristics and market maturity, and then match those variables to each current and potential distributor’s unique value proposition and capabilities to ensure resilient, scalable outcomes,” she said.
Five-step process
The report outlined a five-step process that would help vendors make the right distribution decisions to ensure they had the right mix of partners, covering a wide number of routes-to-market.
Vendors were advised to look for partners that would strategically align with growth ambitions and be prepared to back them with decent margins.
There was a warning that appointing too many partners would have a negative impact and reduce opportunities, tighten margins, and generate unhelpful competition in the distie ecosystem.
On the cultural front those vendors that were going to be successful with distribution were those that viewed it as a strategic relationship. Beyond logistics, recruitment and enablement, the distie is also a key plank of any growth strategy.
Keeping in the spirit of looking at the bigger picture, there was also advice from the GTDC to view digital platforms as an opportunity to expand the business for the channel, taking advantage of distribution market knowledge and skills to expand market reach.
Finally, the fifth step vendors should follow is to avoid the mistake of running with a one-fits-all strategy, and being prepared to tailor programmes and goals to specific partners to increase the chances of success and strengthen relationships.
“To achieve a resilient channel ecosystem, vendors must align their key partnerships, capacity needs and investments,” said Frank Vitagliano, CEO of GTDC. “Distributors have become an even more vital component of IT suppliers’ market and sales expansion objectives in recent years, especially in the ultra-competitive cloud, cyber security and AI fields that require fast, cost-effective growth. An optimal distribution strategy boosts channel performance and ROI, and provides greater incentives for everyone, including current and potential investors.”
