I've been working in Channel Marketing for the past 13 years and I'm still amazed at the complexity, yet ease of doing business in the channel. Up to 60% of IT products flow through the distribution channel1. A vast range of IT products including HDDs and SSDs by Toshiba are sold by manufactures to distributors. The distributors then sell the product to resellers and they move it on down the line to the end user usually with some service wrapped around the hardware or deployment.
If any one of these pieces is removed the entire "IT Channel" would cease to exist. Without a manufacturer there would not be any products to sell. Without distributors, resellers would need numerous employees dedicated to sourcing products directly from manufacturers. The simple act of building a PC would require calls to a manufacturer that makes the case, the manufacturer that makes the power supply, the manufacturer that makes the motherboard, the manufacturer that makes the CPU, the manufacturer that makes the RAM, the manufacturer that makes the optical drives, the manufacturer that makes the graphics card, the manufacturer that make the operating systems, etc, etc. This would be an extremely inefficient process for sourcing parts for a simple PC build. Increase the complexity of the project and the sourcing gets even tougher. Manufacturer's logistics and finance departments would be bogged down as they are not set up to handle sales to thousands of customers. Take out the $5 Billion in credit lines that distributors offer their customers 1 and business would stop instantly. Without resellers / solution providers who would help end users put all the different pieces of the IT solution provided by numerous manufacturers together?
The streamline flow from manufacturer to distributor to reseller / solution provider to end user is just a basic description. In reality all of the aforementioned parties communicate back and forth, over and around each other to put the right solution in place for the end user. At Toshiba we have great authorized distributors who service accounts with credit and fulfillment. We provide support through our sales, marketing, engineering, and post sales departments all along the way as we have many long term relationships with resellers / solution providers and end users. There is value created in each step of the channel ecosystem and every party specializes in what they do best. Year after year IT products continue to evolve but the way that the majority of them go to market does not. I look forward to working with my friends and colleagues in the channel ecosystems for years to come.
1Global Technology Distribution Council – Understanding the Channel. http://gtdc.org/understanding_the_channel.pdf.
The views and opinions expressed in this blog are those of the author(s) and do not necessarily reflect those of Toshiba America Electronic Components, Inc.