What They Say
Big news in the world of broadline distribution this week as Tech Data announced a deal to merge with Synnex in a move that would move Ingram Micro into second place globally. The two firms have combined revenues of around $57 billion, with 22,000 staff (about $2.5 million of turnover/staff member – often an interesting metric!).
Tech Data was acquired by a private equity firm a couple of years ago (What Bob Saw on the Net 18/11/2019) and Ingram was also acquired at the end of 2020 (Links for the Week)
What We Think
I don’t really know Synnex, as its focus has mainly been on the US market, but over the years we had good relationships with both Ingram Micro and Tech Data. We had data sharing agreements with both companies when we were involved in market research, sometimes officially and, for a longer time, unofficially 😉
The arrangement started when Ingram in Germany, but covering Europe, had problems with its internal systems. The company had separate IT systems for sales and for invoicing. It’s dealers and staff could query product databases by specification, but the invoice reporting was by sku, with no product detail. We took the data, which gave us model level sales volumes and pricing and matched it with our own product databases. We then used our analyst knowledge to help the firm identify ‘sweet spots’ i.e. which features were most profitable and where there were gaps in its range, which helped it to identify partners and optimise their supply chain.
That worked really well until the GTDC <fx:spits> came on the scene and gave distributors ‘loads of money’ for their data on an exclusive basis. While the firms wanted the money, they didn’t want to lose insight so, as happens so often in life, a work-around was found 😉 We later did the same for a number of distributors, including Tech Data, in the LFD category, where there was no GTDC deal. (BR)
