-John V Kinny Jr, Director (Business
Development), Ingram Micro Asia.
Ingram Micro, the world's largest
distributor of IT products, with a sales of $25 billion, has been appointed as the new
distributor of Seagate products. John V Kinny Jr, Director (Business Development), Ingram
Micro Asia, announced the partnership in India. An Electronic Engineering graduate from
Pratt Institute, Kinny has worked with companies like Iomega, Bell Canada and APS
technologies. Here Kinny talks to Gagandeep Kaur, Cyber News Service about his company's
reseller focus and how it helps the company grasp the pulse of the market.
As one of the largest distributors,
how do you keep in touch with your customers?
When I talk of customers, I mean
resellers because we don't sell to end-users. We want to get as many resellers as we can.
We want to get as many system builders as we can. And then there is the technology base to
get close to the customer. And internet right now is very popular. In the United States
and Europe, 90% of our sales are through phone.
Is it an automated telephone kind of
an arrangement?
The more we are involved with the
reseller, the more we get to learn about what the customer demands. And this way we
deliver the very product which we feel the customer wants to the reseller. Ideally, it
should be 'just-in-time.'
What are the automated systems that
you are using for 'just-in-time' transactions?
Impulse is a worldwide process,
which is not specific to India. We have done the evaluation of what the current processes
are, and what needs to be. And now we are in the process of installing the hardware.
Basically, it is telecom, LAN and satellite-intensive. Hardware is already in place and we
just need to install the system, which needs minor modifications like tax tables and
octroi.
What is the inventory turnaround
time going to be with this system?
On the global basis, we do about 99%
of our transactions in 24 hours. About 18 turns a year in inventory. Eighteen turns
essentially means we turn over our entire stock 18 times a year. So every
one-and-a-half-months, we are down to almost zero inventory.
If the volumes increase, do OEMs
negotiate with you or the manufacturers?
Actually, most of the manufacturers
in India do not have the infrastructure in the country to provide warranty or support, so
they often depend on the distributors or resellers like us. And there are certain
advantages in this set-up; for example, we fund the duty and all the taxes. Then, we are
only marginally more expensive and sometimes maybe cheaper to what they would get
individually for a little volume.
What are the sort of margins which
exist for your channel partners?
Margins vary, and they are different
for each reseller, depending on how much value they are providing. There are companies
that can trade your product but they don't touch it. And then there are companies that
create an entire ERP system out of our components and the margins can be 50% to 60%. It
also depends where you are doing business. For instance, Australia is more expensive than
China. In component products, right from the manufacturer to the end customer, you'll be
lucky if it crosses 15 points. It's very tough.
So does the hardware maintenance not
come to you, but go to the reseller?
Right now, it is hardly anything. We
are hoping that as we take more burden, both from the reseller as well as the
manufacturer, we can translate that into revenue too