There’s a new kid in the market

ScanSource is the newest player to jump into the crowded security distribution sandbox
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Tuesday, March 1, 2005

GREENVILLE, S.C. - ScanSource Security Distribution marked the beginning of this year settling into its new role as a security product distributor and naming a new executive team to head up the division.

ScanSource Inc., a distributor of specialty technology products including communication, automatic identification and data capture, and point-of-sale products, moved into the security front in late 2004 as an independent distributor - promising not to compete with its dealers by selling to end users or private-labeling products. Current manufacturer partners include Altronix, Fargo Electronics, Datacard and JVC.

To lead the division, John Gaillard was named president of ScanSource Security Distribution and Tony Sorretino will serve as vice president of merchandising. According to Gaillard, the division will focus on a business model that separates itself from other distributors in the market.

“We have a centralized distribution model,” Gaillard said. “In the industry today, decentralized models with many locales seem very prevalent.”

Based here, the company operates its single distribution center in Memphis, Tenn. Gaillard said although the company fulfills orders from this one location, it doesn’t hinder its ability to provide products to resellers on a timely basis.

“We are able to provide a premium freight program by 8 p.m. and can ship in the same day,” Gaillard said. “We removed the barrier from having a brick and mortar presence.”

Another plus to the centralized model is the company can focus its manpower on its sales and marketing goals - that is working to enhance the name of the company and the manufacturer products that it sells.

“By having a centralized distribution, we have fewer people we need to dedicate to the distribution side,” he said. “ It allows for the sales and marketing engine to pay greater attention to driving the brands into the marketplace.”

The company, which employs 800 worldwide, according to Melissa Andrews, public relations manager at ScanSource Inc., chooses to work with a small number of vendors in one product area. It is not trying to be a company that distributes every manufacturer’s products.

“Having two or three solutions in each segment gives us the ability to give more attention to our manufacturers to market and sell their products,” Gaillard said. “They can receive more attention than when they are competing with many others for mind share with the reseller.”

The security arm’s parent company does business with approximately 15,000 resellers. It is with these existing resellers and manufacturer partners that Gaillard sees as built-in business opportunities.

“We believe that we will be able to tap into our existing customer base with those businesses that want to get into the security market,” Gaillard said. “Our customers are very loyal over time and there is good word of mouth.”