Ingram Micro Inc. wants to do more than just deliver your next Hewlett-Packard Co. computer or router from Cisco Systems Inc.
The Santa Ana-based company, which distributes technology products from manufacturers to retailers and other resellers, is going after services for those on the receiving end.
Ingram is offering help with finding workers, marketing and getting more money out of product warranties.
“Services are becoming a more important part of our business,” said Justin Crotty, Ingram’s vice president of channel marketing for North America. “We’re obviously very interested in the services business or we wouldn’t be doing it.”
The interest stems from profits.
Ingram, Orange County’s largest company by sales, makes less than a penny on a dollar distributing computers, software, networking gear and consumer electronics.
Wall Street has to take Ingram’s operating profits out two decimal places to evaluate how the company’s doing.
In the recently ended quarter, analysts questioned the fact that gross margins were 5.34%, down from 5.38% a year earlier.
A tough European market got the blame.
Services offer better profits and “help us be more successful with the existing customer base,” Chief Executive Gregory Spierkel said.
The company may be able to get slightly higher prices from a technology reseller that’s already used to sending business Ingram’s way for its services, Spierkel said.
For the past decade or so, Ingram has helped computer resellers,technology shops that buy computers and software and then customize and install them,with contracts and billing.
Ingram also helps hook up resellers from across the country to work together on big projects.
And the company provides technical support for setting up a network or installing software.
Bigger Push
Ingram’s latest move marks a bigger services push.
In April, Ingram unveiled a “full-service” marketing agency, offering advertising, marketing and public relations services to resellers.
The agency, an extension of Ingram’s own marketing group, helps resellers build their brands, shape marketing plans and generate business leads.
Ingram also wants to help resellers get more out of warranties on the products they sell. It’s started a Web site where resellers can track warranties and service contracts.
The site tracks who has a service contract and who doesn’t (a potential lead for a contract sale) and when a contract is up for renewal.
Ingram’s big retail customers, including Best Buy Co., have mined extended warranties and service contracts as a source of easy profits.
But smaller resellers have been slow to go after them, Ingram’s Crotty said.
“Resellers don’t sell enough of these contracts,” he said. “They’re leaving money on the table.”
The third part of Ingram’s service push: workers.
In March, the company said it formed a staffing and recruiting operation for resellers to find workers.
Ingram is supplying temporary and project workers as well as full-time hires and temps that could be hired for permanent jobs down the road.
Ingram helps with resume searching, payroll processing and interview scheduling.
Job Board Rivals
This puts the company in competition with local headhunters and national sites such as Monster Worldwide Inc.’s Monster.com and Careerbuilder.com, a joint venture of newspaper publishers.
Ingram deals with technical reseller issues every day and has the know-how and the national reach to find workers, said Jason Beal, group manager for the Ingram Micro Services Network.
“We certainly have the knowledge because of our 25 years of experience,” Beal said.
Reseller Reacts
One of the larger technology resellers in OC, GST Inc. in Brea, is considering tapping Ingram Micro for its staffing services, said Kobi Iseri, vice president of technical services.
Ingram has done a good job helping GST find other resellers to work with and could help finding workers, too, Iseri said.
The company is pitching its services as a way for smaller resellers to piggyback on a big company.
“It clearly is enhancing the small-business reseller, making him look bigger and more capable,” Spierkel said.
