Tech Data 2015 Annual Report Download - page 8

Table of Contents
No single customer accounted for more than 10% of our net sales during fiscal 2015, 2014 or 2013.
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 not wanting to invest 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 their highest 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 these services are important to our customers, 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 26 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 both
fiscal 2015 and 2014, approximately 45% 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 customers' needs, quality and depth
of product lines and training, as well as service and support provided by the distributor to the customer. We believe we are well equipped to
compete effectively with other distributors in all of these areas.
We compete against several distributors in the Americas market, including broadline product distributors such as Ingram Micro Inc. ("Ingram
Micro"), Synnex Corp., and to a lesser extent, more specialized distributors such as Arrow Electronics, Inc. (“Arrow”) and Avnet, Inc.
(“Avnet”), along with some regional and local distributors. The competitive environment in Europe is more fragmented, with market share
spread among several regional and local competitors such as ALSO/Actebis and Esprinet, as well as international distributors such as Ingram
Micro, Westcon Group, Inc., Arrow and Avnet.
The Company also faces competition from companies entering or expanding into the logistics and product fulfillment and e-commerce supply
chain services market and certain direct sales relationships between manufacturers, resellers, and end-users continue to introduce change into
the competitive landscape of our industry. As we expand our business into new areas, we may face increased competition from other
distributors as well as vendors. However, we believe vendors will continue to sell their products through distributors, such as Tech Data, due to
our ability to provide them with access to our broad customer base and serve them in a highly cost-effective and efficient manner. Our logistics
capabilities, as well as our sales and marketing, credit and product management expertise, allow our vendors to expand their market coverage
while lowering their selling, inventory and fulfillment costs.
Employees
On January 31, 2015, we had approximately 8,900 employees (as measured on a full-time equivalent basis). Certain of our employees in
various countries outside of the United States are subject to laws providing representation rights to employees on workers' councils.
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