Tech Data 2013 Annual Report Download - page 9

Table of Contents
We generated approximately 21% , 25% and 27% of our consolidated net sales in fiscal 2013, 2012 and 2011, respectively, from products
purchased from Hewlett-Packard Company. In addition, approximately 12% of our consolidated net sales in fiscal 2013 were from products
purchased from Apple, Inc. There were no other vendors that accounted for 10% or more of our consolidated net sales in fiscal 2013, 2012 or 2011.
Customers and Services
Our products are purchased directly from vendors in significant quantities and are marketed to an active reseller base of approximately 120,000
VARs, direct marketers, retailers and corporate resellers. While we sell products in various countries throughout the world, and customer channels
may vary from region to region, during fiscal 2013 and 2012, sales within our consolidated customer channels approximated the following:
No single customer accounted for more than 10% of our net sales during fiscal 2013, 2012 or 2011.
The market for VARs is attractive because VARs generally rely on distributors as their principal source of technology products and the related
financing for the products. This reliance is due to VARs typically lacking the resources to establish a large number of direct purchasing
relationships or stock significant product inventories. Direct marketers, retailers and corporate resellers may establish direct relationships with
vendors for higher volume products, but utilize distributors as the primary source for other product requirements and an alternative source for
products acquired directly.
In addition to an extensive product offering from the world's leading technology vendors, we provide resellers a high level of customer service
through our training and technical support, suite of electronic commerce tools (including internet order entry and electronic data interchange
(“EDI”) services), customized shipping documents, product configuration/integration services and access to flexible financing programs. We also
provide services to our vendors by providing them the opportunity to participate in a number of special promotions, and marketing services targeted
to the needs of our resellers. While we believe that services such as these help to set us apart from our competition, they contribute less than 10% of
our consolidated net sales.
We provide our vendors with access to one of the largest bases of resellers throughout the Americas and Europe, delivering products to them from
our 28 regionally located logistics centers. We have located our logistics centers near our customers which enables us to deliver products on a
timely basis, thereby reducing the customers’ need to invest in inventory (see also Item 2, "Properties" for further discussion of our locations and
logistics centers).
Sales and Electronic Commerce
Our sales team consists of field sales and inside telemarketing sales representatives. The sales representatives are provided comprehensive training
on our policies and procedures, and the technical specifications of products, and attend product seminars offered by our vendors. Field sales
representatives are typically located in major metropolitan areas in their respective geographies and are supported by inside telemarketing sales
teams covering a designated territory. Our team concept provides a strong personal relationship between our customers’ representatives and Tech
Data. Territories with no field representation are serviced exclusively by inside telemarketing sales teams. Customers typically call our inside sales
teams on dedicated telephone numbers or contact us through various electronic methods to place orders. If the product is in stock and the customer
has available credit, customer orders are generally shipped the same day from the logistics center nearest the customer or the intended end-user.
Customers often utilize our electronic ordering and information systems. Through our website, customers can gain remote access to our information
systems to place orders, or check order status, inventory availability and pricing. Certain of our larger customers have EDI services available
whereby orders, order acknowledgments, invoices, inventory status reports, customized pricing information and other industry standard EDI
transactions are consummated on-
line, which improves efficiency and timeliness for the Company and our customers. In fiscal 2013, approximately
$10.8 billion (43%) of our consolidated net sales originated from orders received electronically.
Competition
We operate in a market characterized by intense competition, based on such factors as product availability, credit terms and availability, price,
speed of delivery, effectiveness of information systems and e-commerce tools, ability to tailor solutions to
7
• Consumer Electronics - We define our consumer electronics category to include car and home audio / visual equipment, blue-
ray and DVD
players, televisions and related accessories, cameras and related accessories, gaming and home appliances.
2013 2012
VARs
52
%
53
%
Direct marketers and retailers
27
%
26
%
Corporate resellers
21
%
21
%