ScanSource, Inc. (SCSC)

ScanSource, Inc. operates as a wholesale distributor of specialty technology products, providing distribution sales to resellers in the specialty technology markets. Its product line includes Automatic Identification and Data Capture (AIDC), and Point-of-Sale (POS) products. AIDC products comprise of bar code printers, hand-held and fixed-mount laser scanners, mobile and wireless data collection devices, and magnetic stripe readers, whereas POS includes computer-based terminals, monitors, receipt printers, pole displays, keyboards, peripheral equipment, and integrated processing units.

The distribution channel in which ScanSource operates includes, a manufacturer selling to wholesale distributor like ScanSource, who in turn sells it to resellers, who finally sells them to end users. ScanSource enjoys competitive advantage as the other specialty technology distributors, that compete are smaller in size. Specialty technology requires value-added knowledge that ScanSource possesses. Further, its large inventory position allows for a better customer fulfillment and lower costs.

Recently Cisco has added ScanSource to its list of distributors in the U.S. With this relationship, ScanSource resellers will have access to Cisco’s Unified Wireless Network products and solutions. It will offer Cisco wireless solutions including access points, controllers, network management software, security, switching and routing products to their resellers across the United States.

The risk of international expansion, expanding in Latin America and Europe as well as investment in new infrastructure is new to the company. However, investors can take exposure in this stock, given that ScanSource provides with strong, long-term revenue and investment opportunity.