Distie quits Samsung over margin squeeze

Camera wholesaler, Adeal, has resigned as distributor of Samsung's line of digital still cameras, claiming the vendor failed to offer enough margin for the long-standing relationship to continue.

Effective as of July 1, Samsung will bring the distribution and sales of digital still cameras in-house.

"It's purely a financial issue," managing director of Melbourne-based Adeal, Brian D'Arcy, said. "The margins available on these products have made it unworkable.

"Electronic products in general tend to have low margins. The competitive situation for digital cameras has got to the point that, when you consider the services and all that's required to market a product, you come out in the red."

Samsung refused to comment on the news - but sent out a statement confirming that from July 1, distribution will be handled by a newly formed Portable AV Sales & Marketing Team which will manage the sales and marketing of Samsung digital still cameras, digital video cameras and MP3 players.

These products will be imported by Samsung, stored at its warehouse in Sydney's Homebush, before being distributed directly to retailers.

"Bringing the digital still camera business in-house is part of Samsung's strategy to offer a broader range of portable AV products directly to retail partners," the company said in a statement.

D'Arcy said Adeal - which mostly deals in accessories for hardcore camera enthusiasts - was in no hurry to sign up another digital camera vendor.

"We'd only consider it if the circumstances were different," he said. "But if one looks at history and the way things are going, that's unlikely."

Indeed, history doesn't look good for digital cameras and wholesale distribution. Several other boutique camera wholesalers have dumped vendor partners since digital became the norm.

Rudolf Gunz handed the wholesale agency for Olympus cameras back to the vendor in 2002 to focus on distribution of dental equipment, and fellow wholesaler Maxwell Australia did the same with Nikon in October last year.

"We're a strong company, and I want to keep it that way," D'Arcy said. "It's better to act early than to run into trouble."

Adeal recently became the exclusive distribution partner for flash memory vendor TomatoFlash. It also remains the exclusive wholesale distribution partner for Leica (cameras), Hama (accessories), Hoya (camera filters), Manfrotto (camera accessories), Stormcase (equipment cases), Gitzo (camera stands), SunPak (camera accessories), Tokina (lenses) and Naneu Pro (camera bags).

Adeal employs 65 staff but D'Arcy admitted that losing the Samsung business would 'require some adjustments'.