Channel News

By Richard McCaffery

Privately held D&H Distributing is jumping into the federal market for the first time in its 81-year history.

The Harrisburg, Pa., company has formed a unit dedicated to the federal sector to provide government resellers with a wide range of computer products and services.

The unit, called the Government Services Division, will offer resellers product discounts from most vendors, a dedicated staff of government specialists, direct fulfillment and other back-office services. A team of employees is being assembled.

D&H is fishing in a good spot, but it will have to fight for space on the bridge. Competitors include Ingram Micro Inc., Tech Data Corp. and Merisel Inc. as well as a range of niche companies with both feet in the federal market.

Fred Humbert, formerly government sales manager at Iomega Corp., Roy, Utah, has been named D&H director of government services. Humbert, who started putting the division together a few months ago, said the company will rely on its relationships to build a presence.

"It comes down to people," he said. "Customers want to move product, be told the truth, and they want to depend on things."

This is not the first time D&H has looked for new pastures. In 1995, the company formed an IT distribution unit to pursue resellers in the education industry. That unit grew quickly by applying its commercial approach to education customers. Humbert expects the same approach, which offers resellers a lot of hands-on support, to work in the federal government.

D&H got its start distributing retreaded tires. It now peddles computers, peripherals, consumer electronics and other IT products from companies such as Iomega, Advanced Micro Devices Inc. and The Panda Project Inc. The company had $600 million in 1998 sales, has 350 employees and distribution warehouses in Boston, Chicago, Dallas, Miami and Visalia, Calif.
Merisel Inc. of El Segundo, Calif., which in April switched on its new SAP-built information system, is leveraging the massive tool it installed to automate its business processes at Merisel to help government resellers.

In early August, Merisel plans to put its resellers' General Services Administration schedules onto its SAP network. For resellers, this means the system automatically will update schedule prices, products and promotions; salesmen will not have to dig through stacks of paper to find the latest prices or crunch the numbers by hand, said Curt Cornell, director of Merisel's government and education division.

"It's all automated in real time," Cornell said.

It also gives multiple prices for each product; prices vary depending upon whether the customer is selling to the government, a university, a high school or the commercial sector.

"Multiple pricing on a single [product] is a big advantage," Cornell said. More than 100 resellers' schedules will go into the system, he said.

Merisel started the process in May at the request of resellers, and further SAP enhancements are on the way this year, said Cornell.

He stressed that his sales force will be able to spend more time helping customers and less time digging through paper.

Merisel distributes more than 25,000 products and services to resellers throughout North America. The company had sales of $4.6 billion in 1998.