Alloys - The non-traditional approach to distribution

Alloys - The non-traditional approach to distribution

Why going against the grain is generating new levels of reseller value.

Paul Harman - CEO, Alloys

Paul Harman - CEO, Alloys

Almost 10 years ago, in 2008 to be precise, Paul Harman and his team gathered around the boardroom table.

With brainstorming underway and ideas flowing, the conversation stopped.

“I kept asking my team to explain what was special in our business, but they kept telling me everything that everybody else did,” recalled Harman, when assessing the brand value of Alloys in the Australian market.

Harman wasn’t interested in the competition, but as his team explained — “to understand yourself, you have to understand everyone else.”

Through assessing the marketplace in Australia, Harman and his team constructed criteria for ongoing success in the channel, built around the notion of being different.

But as Harman acknowledged, advocating a point of market difference is one thing, instigating change over the best part of a decade is another.

“We created a new category in the marketplace called non-traditional distributor,” Harman explained. “It’s a combination of our values and what we sell in the marketplace.”

According to Harman, Alloys goes to market through key values based on knowledge and flexibility, bringing new levels of expertise to commercial relationships along the way.

“There’s lots of different ways we can add value,” he added. “The way we train through our showrooms, the seminars we run and what we’re prepared to do in a non-traditional distribution sense.

“Distributors are traditionally thought of as being a combination of a post office and a bank — and we don’t want to be that. We actually want to help our partners survive and thrive which means we have financial conversations with our channel, rather than just focusing on products or supply chains.”

In going against the grain, Alloys has exposed itself to a range of new reseller and vendor partners, with demand for true value-added distribution prevailing in a market continually challenged by changing customer requirements.

Paul Harman - CEO, Alloys
Paul Harman - CEO, Alloys

“There’s always been demand but the execution has been difficult,” Harman acknowledged. “It requires a level of communication and interest that doesn’t always work at the bigger end of distribution.

“The larger players are more motivated by having to sell these many boxes today which means that the rate of speed makes it impossible to stop, think and assess the core purpose of a distributor.”

Likewise, Harman accepted that traditional vendor behaviour also encourages bad business habits in resellers, with the channel still bound by conventional methods and archaic methods of thinking.

“Lots of vendors put effort into programs for resellers and for us as distributors that generates the absolute wrong set of behaviours for what they want in the marketplace,” Harman said.

“They actually have programs that are cash flow negative for resellers, that don’t provide sustainable growth and only provide profit if partners place themselves in business jeopardy. And these behaviours have an impact.”

Hence the importance of the non- traditional distributor, a distributor Harman believes has the time and expertise to understand a vendor program and to advise resellers accordingly.

“We say no more times than we say yes to vendors because we want to be the specialist in our category,” Harman said. “We’re creating a printing and technology focus and when we look at the market, we want to be able to partner in a meaningful way.

“We don’t see value in taking on vendor brands when we can’t be either number one or number two in the market, and we don’t want to be a printer supermarket for the channel.”

Despite acknowledging the dream of resellers having no choice but to buy product through one distributor, for Harman, such aspirations go against non-traditional Alloys thinking.

“It defeats the purpose of being a non-traditional distributor,” he said.

Reseller value

Operating as an extension of the reseller, Alloys operates Reseller Business Centres across Adelaide, Brisbane, Melbourne and Sydney, providing a fully equipped showroom for partners to demonstrate products to customers.

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