“...wholesale distributors selling tech products have demonstrated an ability to fluidly respond to changing market demand”
Stephen Baker, The NPD Group

Sales of tech products through wholesale distributors have increased over 8 percent in 2004, according to recently released numbers from The NPD Group's Distributor Track, a leading indicator of business-to-business IT technology trends in the United States. This growth has occurred despite falling prices for many IT product categories.

According to 2004 Distributor Track results, desktop computers grew over 13 percent year-over-year and notebook computers grew over 24 percent. The largest gain was made in the memory card category, which grew nearly 58 percent in 2004 when compared to 2003. Other categories that had notable gains in 2004 were PC chips (43 percent), servers (24 percent) and PC memory (20 percent).

“As evidenced by robust growth in 2004, wholesale distributors selling tech products have demonstrated an ability to fluidly respond to changing market demand for business critical IT solutions,” said Stephen Baker, director of industry analysis for The NPD Group. “As a window into the small to mid-size business (SMB) space, Distributor Track supports the notion that the SMB space represents a huge opportunity for the IT vendor community.”

By tracking IT product sales through distribution, Distributor Track enables the industry to monitor the customer category (or destination channel) into which distributors are selling. These destination channels include: retail, direct marketer, corporate reseller, value added reseller (VAR), original equipment manufacturer (OEM), consultant and E-commerce. The NPD Group’s Distributor Track product information is compiled and reported monthly by product category down to the SKU level by customer segment. This report provides a single source snapshot of virtually all product sales for the IT industry.

“Clearly, IT distribution has played a leading role in the IT spending recovery over the past few years,” said Tim Curran, chief executive officer for the Global Technology Distribution Council. “As the leading trade association representing IT distribution worldwide, the Global Technology Distribution Council serves as the conduit between several key players in the IT supply chain, notably distributors, vendors, and solution providers. Many vendors are placing increased emphasis on leveraging the channel to expand their market reach and distribution continues to play a crucial role in supporting an efficient and cost-effective go-to-market strategy.”