The extra warehouse space had become an absolute necessity because the expansion of D&H’s Canadian business was straining its capability to give its customers the service they expect.
The facility actually opened for business over the Victoria Day long weekend. However, Wednesday afternoon saw D&H Canada officially open its new office and warehouse complex in Brampton, with a ribbon cutting and open house with many of its vendors in attendance.
The new complex, which was a field last year, gives D&H about 100,000 square feet of space, almost twice the warehouse space of the old digs, and three times the office space, which has allowed them to add new staff. The extra warehouse space had become an absolute necessity because the expansion of D&H’s Canadian business was straining its capability to give its customers the service they expect.
“We have been growing 20 per cent each and every year, and we could not grow at that rate any more in the old building,” said Greg Tobin, general manager of D&H Canada. “Our old building was state of the art, but the size was such that we couldn’t scale the business and deliver what customers require – on time every time.”
Tobin said that outside of retail, few of their customers today maintain much inventory, so are dependent on the distributor’s ability to get them product fast, which means D&H has to be able to keep it in stock themselves.
“Very few of our customers today really inventory product,” he said. “The nature of business today indicates we have to have good inventory levels to support them, and not just the ‘cream of the crop’ type of product.”
Indeed, some of the vendors who have been added to the Canadian roster recently are a departure from D&H’s meat and potatoes products. For instance, they now have exclusive distribution rights in Canada to Dell Retail products, which include Dell’s consumer-focused product rather than the commercial brands typically handled by channel partners. They have also added Texas Instruments [TI] in another exclusive relationship handling a non-traditional product for most VARs.
“We distribute the TI calculators to support the educational channel,” Tobin said. “Anyone who buys a TI calculator in Canada gets it through these doors.”
D&H Canada is also using its new space to make new investments in wearable devices.
“Wearable is becoming stronger because of convergence,” said Jeff Davis, D&H’s senior vice president of sales. “It’s clearly a category that’s emerging over the coming year.”
“The bigger facility allows us to be more strategic – where do we want to invest and have the room to grow,” Tobin said.
Tobin said growth had actually accelerated since the new facility opened in the spring, and that 500 brand new customers a year have been coming on board. He acknowledged that their pyramid of customers is somewhat different from the big broadline distributors.
“We are much more diversified for the breadth of customer,” he said. SMBs and retail represent a much greater part of their business than their competitors. While their competitors are deepening their investment in enterprise data centres and the cloud, D&H’s customer base isn’t calling for that yet.
“They aren’t building out big cloud structures today,” Davis said.
“We initially focused 100% SMB at the start, but we are adding more etail, more retail, growing our DMR business,” Davis noted. “Our main focus is still SMB by far.”
“SMB is what the product portfolio is geared towards,” Tobin added.
Tobin said that D&H’s unique culture allows them to grow at two to three times the industry average while serving a clientele that some other distributors see as less valuable.
“It starts with our buying organization – good qualified buyers who spot trends,” he said. “We also have an average of 9.2 years experience per account rep with D&H.” That number is interesting, since D&H Canada has only been in business for seven years, since 2007.
“Some of our reps were specially brought in from the US team,” Tobin explained.
Because each customer has their own dedicated rep, Tobin said this gives them a major competitive advantage.
“It means the calls coming in are not going in to a large pool with a different person every time,” he said. “Even in the warehouse, every order is picked completely by one individual. That allows them to see that they did that, which gives a sense of pride.”
A few categories are underperforming relative to the others, although even those are not presently problematic.
“Leading up to the last calendar year, PC systems was low, but now all the tides are pointing to the right direction with the XP refresh,” Tobin said.
“Point and shoot cameras are down, and navigational aids declined, for similar reasons, because much of it is now done by the car or by the phone,” Davis said. “But even here we are still seeing positive on those.”
“We know our day will come in those categories though,” Tobin quipped about the inevitability of their decline.