D&H Canada has announced that it’s going long-term with its 60-day terms available to solution providers through a deal with financing partner DLL, extending the program through the end of 2021.
The distributor has offered 60-day terms in concert with DLL since last spring. The program was originally announced as running for the second quarter of calendar 2020 but was later extended for the third and fourth quarter calendar. With COVID-19 numbers spiking across the country and pandemic-related restrictions still in place and in places being reinforced, there’s no doubt the market is still being impacted by the pandemic. But Matt Riley, director of credit and financial services for D&H, said that now, the company feels comfortable enough with forecasting to extend the program through the end of the year.
“It’s been a differentiator for us, and that flows downstream to our partners, serving as a differentiator for them too,” Riley said of the program.
He noted that there had been two distinct phases of how partners have used the extended financing terms. In the early days, he said most solution providers looked at the 60-day window as a way of coping with slow-paying customers concerned about their own cash flow in the early days of pandemic-related economic slowdowns. But as time provided additional insight into what “the new normal” looks like, many partners have shifted from using the additional financial flexibility to aid cash flow to “taking a more aggressive position” to win new business.
“There are still a lot of customers looking for technology refreshes to accommodate work-from-home and learn-from-home, and we think that’s going to stick around,” Riley said, noting that the longer terms allow some solution providers to take on additional inventory in anticipation of customer refresh demand.
To date, the company has engaged about 130 Canadian solution providers with the extended terms offer, and Riley anticipates that number growing by between 20 and 30 partners this year. Those partners have driven a significant increase in the volume the D&H/DLL partnership has facilitated.
“We doubled the dollars between 2019 and 2020, and I’d be surprised if we didn’t see it doubled again this year based on the effort we’re putting behind it and the growth we’re seeing,” Riley said.
He said simplicity has been the key to the success of the program.
“The best programs are the ones you can explain in one sentence, and ‘Sixty days on everything you buy’ fits that bill,” Riley said.
Along with the terms through DLL, the distributor currently has extended-term offers with some vendor partners. Most notably, Lenovo is still offering 90-day terms for the current quarter.
Riley said that in addition to the extended terms, D&H’s financing priorities in Canada include continuing to grow its options for combining hardware and software with services and warranty and selling the whole bundle on an “As-a-Service” basis. He reported the program has “started to gain momentum” in the United States” after launching there a couple of years ago. The push is newer in Canada, but Riley said he expects to see similar growth in this country. D&H figures to realize that growth much more quickly as it expands its marketing and communications around the offering, he said.
“We see the value of it, and if our partners get used to selling like that, it helps them retain business much easier,” he said. “The more [solution providers are] educated on it, the better it will be taken up.”