The nuts and bolts of distribution

The nuts and bolts of distribution

Queensland distributor, XiT Distribution, is celebrating its fifth anniversary this year. Its boss, Santo Pappalardo, is a veteran and pioneer in Australia’s IT distribution landscape, having built up IT Wholesale before selling the business to Cellnet in 2000.

Can you tell us a bit about your background?

I started in this business in 1983 and have been in the industry 25 years this year. I had an Apple dealership called The Byte Centre, which was the first Apple Centre in Brisbane. We did a lot with Macs in the early days – we were chosen by Apple to be the tertiary supplier in Queensland. At the same time we ran a wholesale business called Q*Soft and were the Microsoft distributors for Queensland. That was the really early days – Microsoft hadn’t even floated on the stock exchange. I sold out of both businesses and started Printer Wholesalers, which eventually became IT Wholesale.

Did you always want to be in IT?

I got into it by accident. My brother-in-law and I came across the Commodore Vic-20 and we went out and bought a couple. A few months later Commodore released the 64 and we decided to upgrade, so we put the Vic-20s in the ‘weekend shopper’ and were inundated with calls. We called Commodore in Sydney and told them we wanted to open a computer store and got a dealership. We got an Apple dealership six months later.

How did Printer Wholesalers evolve into IT Wholesale?

I ran Printer Wholesalers as a one-man band for a couple of years. All we did was distribute Panasonic printers and faxes. After a number of years we got IBM and that became the backbone of IT Wholesale. We got many other printer brands along the way and all sorts of things. We had two branches – Brisbane and Sydney – and we became IBM’s largest distributor in Australia, even though we were up against the likes of Ingram Micro and Tech Pacific at the time. We sold IT Wholesale to Cellnet in 2000 after running it for 12 years.

How long did you stay on with Cellnet?

I stayed on running IT Wholesale and then became a director and COO of the whole group. Basically, I couldn’t get along with Steve [Harrison]. He had the support of the board which was unfortunate because none of them had any experience running an IT distribution company. Eventually I was asked to leave, so I did. Jim [Watson] and Marney [Robinson], my partners at IT Wholesale, were still at Cellnet. They and a few longstanding employees of mine left and started XiT Distribution. I joined them once my restraint of trade period had ended.

What do you like about the current job?

I’m back doing what I enjoy doing. My main project at XiT has been to expand into the audiovisual industry. We now have a separate AV division that distributes into that channel. Being masters of our own destiny again is great.

What’s the main business objective behind XiT?

Our philosophy has always been that we don’t want to have a million brands; we’d rather have 10 or 12 brands and be a major player for those vendor partners.

Is distribution the same now as it was in 1988?

This is what amazes me with vendors and distributors who try and reinvent the wheel every few years or bring in a new management team. I’ve been doing this for 25 years and it’s simple: You buy things, 100 at a time, add a small margin and sell them one or two at a time. You have customers who want to ring your phone, speak to somebody, get their orders in and shipped out on time. If you do those simple things well you’ll be successful.

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