SMB Distributor says it is Bucking the Recession Trend

Even as some of its larger rivals seem to be struggling with flat sales, distributor D&H, which is known for catering to resellers serving the small part of SMB, says that it saw a 13 percent increase in sales year over year for its fourth fiscal quarter ended April 30.

Now, keep in mind that D&H is a privately-held company, so unlike Ingram Micro, Tech Data and Avnet, it is not required to report its financial results, and so it can pick and choose the numbers it does want to report.

That said, while Ingram was “surprised” by Q1 softness that pushed revenue up by just 4 percent, and weak server sales meant Avnet did not meet its own revenue expectations (although Q1 sales still rose by 14 percent), D&H was seeing a spike in sales for the first quarter, and year-over-year sales for May grew by 15 percent. And D&H’s results did not include the accretive effects of any acquisitions.

Not surprisingly, the company’s new Co-President Dan Schwab attributed the robust sales performance at D&H to the company’s strong relationship with its resellers. “D&H’s customer service really stands out in the channel,” he says. “Resellers are looking for distribution sales reps that are consultative” and that is something that D&H has been able to provide, according to Schwab.

Particularly hot technologies included servers, networking, notebook and mobile devices, digital signage and storage. According to D&H, all these categories are expected to exceed 20 percent growth during the first half of the company’s fiscal year, which began on May 1.

D&H has also taken proactive measures to help its resellers through any residual effects of the credit crunch, according to Schwab, such as extending an additional $10 million in credit to its resellers. Schwab says that other distributors have reduced open lines of credit. “We feel the onus is on us to invest in our resellers. We did it to make more capital available so that they wouldn’t have any restrictions on their business.”

For resellers, Schwab recommends to always look to offer complementary products. “In mobility, it’s not just about the notebook, but also about the VPN, remote access, and whatever they need to run their business remotely,” he says. “The resellers that are having the most success now are the ones that are proactive in presenting solutions to customers.”