Ian Kilpatrick, chairman of VAD (value added distributor) Wick Hill Group describes how the company has not just survived, but also prospered during the recession, having increased sales by 49% in the last three years. The company was recently named by Deloitte as one of the Top 1000 best performing businesses through the recession.
The recession impacted many of the players in distribution, both in the UK and in Germany, our two key markets. At Wick Hill, we took the opportunity in the recession to increase investment in marketing, technical support services and financing initiatives to support our channel and help grow their businesses.
Alongside that, we carried out significant market-making activity for and with our suppliers, to increase their market share. This came about both organically and from competitors.
We, and perhaps more importantly, our channel partners, have experienced notable success with this approach. Their success has helped us grow sales significantly during the recession. Alongside that, M&A activity certainly hasn’t been a detriment to us, with some weak and some stronger competitors acquired to our benefit.
Our services model is based on supporting our channel partners to grow, particularly with solutions that require services. As such, we focus on providing the training, consultancy and support services to enable our channel partners to maximise their services revenues.
While we have a large skilled engineering team, our goal is to use them on a knowledge transfer basis. Unlike many other distributors, we do not treat these services as a profit focus for us, rather as a service to enable our partners to get up to speed for initial deals (or to support them at times of overload) so that they can then make their own service margins.
Good reseller relationships
A golden rule is that we do not sell anything direct. Our goal is to market-make for and with our channel partners to maximise their success. That success then feeds directly back to us. On the services front, we are using those services to support partners to get a bigger piece of the cake. We’re not trying to eat their cake.
The more successful we can be for our partners, the more support we get for them from our vendors, the more successful they can be. It’s a virtuous circle and it’s particularly effective in a recession when many vendors and distributors are cutting back rather than investing.
Focus, focus, focus – that’s the core of what we do. We have deliberately chosen to restrict our portfolio to ensure that we are able to provide significant focus on our suppliers and to ensure that we are able to focus on the specific areas where we have solutions.
By investing our money alongside our suppliers and customers, we are able to increase the size of the market for solutions, either organically or by taking market share. This is recognised and appreciated by our customers and is one of the reasons we have increased sales in difficult times.