How AVAD’s Business Continues to Evolve

Three years after being purchased by mega-distributor Ingram Micro, the 11 original independent owners of AVAD distribution companies are gone.

Former president Bob Gartland is gone, and Ingram Micro now has one of its own executives at the helm.

So how have the changes affected the distributor?

CE Pro sat down with Wally Whinna, executive vice president of marketing, and new president John Soumbasakis at EHX Spring.

According to Whinna, Soumbasakis has been a great asset because he comes from a consulting background. "He knows how to ask the right questions and direct our activities to accomplish the goals that we need to accomplish in this kind of environment," Whinna says. "All of the partners have left … except me, I'm still here."

New Regional Structure

The duo says it has implemented a new regional general management strategy and increased its national presence. Ingram Micro also has no plans to merge AVAD with DBL Distributing, which it purchased last year.

"It's going to be separate businesses and separate systems," Soumbasakis says. "Frankly, they are separate value propositions and categories of products. We don't have any plans to integrate."

The company transitioned last year from 11 separate sales territories to three national territories under the direction of individual general managers.

"It has actually been beneficial from an execution standpoint," says Whinna. "We can create a plan and more easily execute it. We don't have 11 separate operating systems, we don't have 11 separate opinions so to speak."

"It certainly is business as usual," says Soumbasakis. "Nothing has really changed. Yes, I'm here and Bob Gartland isn't. Since the CEDIA Expo, we're still very focused on making sure we can provide local support to our customers. At the same time, we're at more of a national footprint now, and more unified footprint."

Consolidating Financial Functions, New Phone Support

Whinna says Ingram Micro has implemented two big changes:

• Consolidation of financial functions
• National rollout of technical phone support

"So if a customer calls a branch and it's lunchtime, and that branch is really busy with dealers who are coming in, that phone can bounce to the closest branch to get answered," Whinna says.

"Whereas before, they were independent phone systems, and demand is very "spiky" at any given time in a branch … it can be really busy at one branch and not so busy at another branch."

Ingram is not involved in the operations at all, according to Soumbasakis. "AVAD basically has its own financial system. We make our own decisions."

He says one big benefit of being part of Ingram is that the parent company has $500 million in cash on hand. "It makes this economic period perhaps a little bit less challenging for us than it might be if it was a much smaller independent company," Soumbasakis says.

To that end, Whinna says AVAD is working with dealer on credit terms.

"It's a big issue for them, and with the 36 locations, and as John said, we have $500 million in cash, so we can afford to stock a little deeper than a lot of the independent distributors can now," says Whinna.

Branching into New Product Areas

Soumbasakis admits AVAD has not been as active as it should have been in non-core product areas, such as home healthcare, commercial, IT and other areas. He says dealers are now asking for help to branch into other areas.

"Frankly, we haven't traditionally been the source of product for some of those other spaces," Soumbasakis says. "So what we're doing now is actively looking, and we have the resources and the people to go out and actually expand our categories if we need to so that we are that one-stop shopping, and continue to be their primary source for everything."

Whinna says lighting control is a hot category right now. "We've been Lutron's largest home theater distributor forever and actually lighting is up," he says. "Lutron is up with us this year, so dealers are looking for new profit centers. They have a great green story."

Whatever happened to AVAD's D2B (Dealer to Builder) program? Soumbasakis says it's still active, adding that the company has actually signed more contracts with builders this year than ever. They're just not building the houses.