Shifting focus, not boxes: AV distribution in 2025 and beyond

Distributors are moving beyond a basic sales function to providing a range of services. What will an AV distributor look like in 2025 and beyond? Paul Milligan speaks to distributors and their customers.

Distribution has always been an absolutely vital piece of the AV channel. An essential conduit between integrator and manufacturer. But it hasn’t always enjoyed the best reputation in the market. 
 
The intense competition in the projector and then the flat panel display segments between the bigger players has led to accusations that distributors were creating a ‘race to the bottom’ when it came to pricing, which saw products quickly become commoditised and left little margin for anyone in the channel. During this same time the phrase ‘box shifters’ started to make an appearance in the AV world. As you’re probably aware, the term wasn’t a compliment.

The accusation levelled at these companies, and the staff who worked for them, was that they were only interested in hitting monthly sales targets. Once the sale was made they were done. What we’ve seen in the last five years is the majority of distributors trying to distance themselves from the ‘box shifters’ tag, by providing a range of additional services. Which has itself given birth to another new term, ‘value-added’ distributors.

above: prase showroom

We gathered distributors across EMEA and their customers (system integrators) to find out what these services are, and if they were actually being utilised, to help get a clearer picture of what it means to be an AV distributor in 2025 and beyond.

Is the role of an AV distributor merely to give some product guidance and pricing, or have we moved past that point now? “I think any modern day distribution organisation needs to add more than selling boxes. A box sale today doesn’t justify the true value of what is required as a distributor. The important part of the distribution business is having pillars of successful areas where they can develop from pre-sales to a post-sales, delivery adding value across the board to our partners and to our business,” says Dino Drimakis, strategic director from Middle East distributor NMK (a Midwich company).

“The days have gone of people who just shift boxes and give a price. As integrators we need a little bit more than that. They give us help and in-depth knowledge whenever we need something or there’s a specific new technology that’s coming out. The distributors that offer a more technical piece are the ones that add value back to us,” says Kristian Cutting, joint managing director from systems integrator GVAV.

It depends on the distributor says Stuart Dingwall, business development director from integrator LSI Projects. “Some of them are just box shifters, and some of them are investing in their people and systems in order to provide that extra support, which is reassuring. We are always going to pick somebody like that over somebody who is literally just moving something from A to B.”

above: Prase offices

The big question you need to ask yourself as a distributor says Mark Flanagan, head of marketing from distributor Audiologic is where does your business sit? How do you add value? It’s not just selling products because it’s hard to defend that and it’s hard to protect that business model. Everybody says value added partner or value added reseller. It’s the same in IT world as well, the substance of that is providing subject matter expertise.”

To do that Audiologic has built a team where the split is nearly 50/50 between sales and service positions. It’s the same logic shared by distributor Prase confirms Ennio Prase, the company’s managing director. “Out of 56 staff today between two offices we have 11 master class engineers, which is a lot when you realise we aren’t producing a product.”

There move is part of a seismic change says Bas Scheepens, vice president of distributor TD Synnex Maverick Europe. “The conversations we are seeing more and more are not just around the products and the solutions, it’s really around asking your business partners where are you heading? Where’s your customer heading? How do you make sure that you provide the right business outcomes for those customers? And how can we facilitate and support you on that journey? In the past it was more around we’ve done a lot of business with each other, how can we do more?”

To support integrators during this period of change, are any of the distributors helping with tenders or proposals? “We will very often get a tender emailed to us and be asked to pick the bones out of it and quote on the audio part,” says Andy Lewis, managing director of Audiologic. “What we find in some of the extreme occasions is that customers will just use us as their audio department.”

The integrators we spoke to were keen to remain protective of how they facilitate the tender process. “In terms of providing information to us for our tender proposals, distributors can help, but they certainly don’t write the tenders, we do our own. But if we need certain pieces of information to support our bids, if there’s some architectural elements that are needed before the submission stage, for sure they might help us with that,” says Cutting.

Others, like Chris Lebrand, managing director of integrator Runtech, wouldn’t go to distributors for help with drawings, “I find that too personal, and we have our style”.

above: Audiologic technology education suite


In offering an increased range of services, is there a danger for distributors they might scare off an integrator who feel they are encroaching on the role that SIs have always played? We do have to play nice with consultants admits Drimakis, “We don’t ever want to be competing with our partners, whether it’s a consultant, an end user, whoever it may be. We need to play very smart and add true value at positions where needed by the consultant.” Often distributors will reach an agreement with the system integrator to participate in the bigger projects due to the complexity involved says Prase, “because the customer wants to be extra safe and sound. We are not standing in their shoes, we are still performing within our limits and within our role, but this added value element stretches to supporting them on site.”

As Prase mentions there, do other distributors go to site to help integrators, or would integrators even want their help on site? NMK is used as the first level of support on many occasions says Drimakis, “whether it’s a post-sale online call or whether it’s an actual physical on-site visit or it’s a combination of the two. Post-sales service is critical for our business, its critical for the clients, its critical for the systems integrators and that’s why a lot of people tend to spend with us because they know we will be there.”

There are two clear advantages for an integrator to becoming truly ‘value-add’, the first is that it separates you from the competition who don’t offer those services, secondly if you are helping with tenders or drawling plans or going on-site to help, it puts you closer to that customer when spending decisions are being made. The problem is those added services aren’t typically charged for, and there is actually no guarantee that the integrator who has accepted your help with a tender or completed some drawings for you will actually still buy kit from you when it comes time to put in an order.

It’s something distributors are all too aware of says Flanagan. “There’s a challenge in how we commercialise and protect value-added service. In order to provide that expertise, which is effectively outsourced consultancy, it doesn’t strictly come with strings attached, the assumption is that it’s part of a business transaction, but the client is still free to purchase components from somewhere else, so that’s an evolving business risk for us and a challenge for all distributors as all this evolves.”

Previously when Prase was only selling pro-audio kit, which typically held a higher margin than video kit, this profit would compensate for the time spent providing these added services: “When we were audio only, we were working on much higher margins and this was allowing us to provide these resources free of charge. Due to the fact that we don’t have so many AV consultants in Italy we are still not charging for these services. Will we in the future? For sure, because it becomes unsustainable.”

above: Prase demo room


Integrators are expected to be aware of every AV product on the market, this is clearly impossible, so could this be where distributors provide real value to integrators, by offering specialist help in more niche products – XR, spatial audio etc? We can’t be masters at everything admits Cutting: “I don’t think anyone in the AV world is. When you get an inquiry and a customer needs a certain type of specialism, that’s where distributors are good. They help us to show ourselves as a capable entity. With their help, we can bring in the right people to ensure we put our best foot forward with our customers. We do use their specialist services, on LED for example they might do help us with the architectural side. It’s normally a piece within the jigsaw puzzle that we need. Then we can focus on what we do best, and that’s the integration piece.”

Scheepens from Maverick Europe agrees, highlighting the collaborative nature of many large projects which often require specialist skills. “Nobody can know every product, nor can we, that is a challenge we all face. This is really where your ecosystem comes into play. The question is which partners do I want to collaborate with in a strategic partnership for the long run?”

When LSI Projects does accept specialist help from a distributor, it’s typically at busy times admits Dingwall: “If we do reach out to the distributor, it’s probably just a bandwidth thing on our side that the technical team is swamped with other things, so we need to outsource that particular bit of programming to somebody.”

The subject of finance has always been a tricky subject when it comes to integrators and distributors. The rule of thumb is that the larger the distributor the bigger the financial package they can access to help integrators on large projects. The problem that comes with that is that the larger the distributor the greater the number of internal processes it has to go through increases. Which slows the process down, but also increases the risk of being rejected as it has to go through so many different levels of approval. Smaller integrators have less processes but less money to access. What would integrators like to see in 2025 and beyond from distributors when
it comes to product financing options?

The key is to involve financial people in meetings when a big project is on the horizon says Scheepens: “In reality there’s a lot more possible that people think, but we need to have that conversation because very often it’s specific to how you get to where you want to go.” Because of Maverick’s size, it can lean on its parent company, which has its own finance subsidiary (TD Synnex Capital).

“I’d like them to have more flexibility on credit terms because companies are losing out on a lot of business because they’re just not willing to bend on certain rules and not even give you a chance. It’s missing that human element,” says Matthew Johnston, operations of director at RunTech.  “We always pay on time, when you have a long record of doing that it’s then quite galling if someone just says no, the distributors that say yes is why their relationship [with us] grows.”

Cash flow can be difficult to manage at times says Dingwall, so any help here would be appreciated. “On the projects we do cash flow is king. Nothing gets paid quickly. We do a lot of work in the Middle East, and we can be 90 days from getting something delivered to us to actually being able to claim for it, or expect payment coming in. Our supply chain has been curated over the years to the ones that will help support that. Payment upfront is not great for us, although I know some manufacturers put that upon their distributors. If it’s the regular 30 days and the suppliers would support us with 60 days that would make a huge difference, because that gives us a chance of being able to receive, turn around and ship the equipment to site. It then has to go through a receiving and sign-off process. It never matches up, but it’s the difference between being several months out of kilter between money in and money out.”

Smaller is better,” says Flanagan. “We can make those calls, as opposed to it being a larger, more corporate, managerial executive making those decisions. It’s knowing most of these customers, understanding that may find themselves in this situation, and ultimately two people can get in a room and make a judgement call within reason. But based on experience and sometimes if we need to take a risk, and judge it to be managed, that can be done whereas you won’t get that necessarily in much larger organisations where there’s much more governance.”

This is a tricky time for distributors because as you can see above, not all integrators want or will accept help/advice from them, even though that could be providing technical drawings, or writing parts of a time-consuming tender document, or coming on-site when there’s a problem. It’s a tricky balancing wire distributors have to walk right now between offering more services and worrying they are encroaching on what integrators charge their clients for.

It’s clear why a sizeable chunk of the distribution channel is keen to distance itself from being seen merely as a box-shifter. Distributors that just sell kit will not survive as there will always be someone willing to sell that LED videowall a few euros cheaper than you are, just to get a sale. Moving to a more service oriented model is to be applauded, and it’s great to hear how many distributors are adding skilled technical service staff. That can only be good for the wider AV industry. As mentioned above these services are given away free of charge right now to help foster longer relationships, but these services could certainly be chargeable in the future. If integrators are as time poor as appears they are, wouldn’t it make sense to accept help when offered it? The battle distributors are going to have is getting integrators to accept that a larger, more collaborative model of working will actually benefit everyone.

Article Categories




Most Viewed