Hewlett-Packard resellers in the habit of engaging competing distributors in price wars will no longer have a chance after the vendor realigned its big ticket DesignJet printer channel last week.
Tech Pacific knocked out Prion and Digiland in the battle of tenders to win the rights to exclusively distribute the high-end printer range, which includes the DesignJet ColorPro GA and ColorPro CAD products, effective from November 1.
The move will also replace the existing supply agreement between corporate resellers such as Leading Solutions, Applied Microsystems and Centari, which currently source the products direct from HP.
Both HP and Tech Pacific refuted suggestions a single distributor model would impact pricing, pitching the change as an opportunity for distributor value-add and consistent pricing.
David Cullen, Tech Pacific's managing director, said "our value-add will increase", and that "prices never rise".
HP reports Tech Pacific has the ability to ship the products directly to the customer site with the reseller's invoice.
Michael Bosnar, Prion's managing director, commented that he was puzzled by the decision to go with one distributor. "The price is going to vary now," he said. Bosnar said resellers were the "victims" because they will lack choice.
In addition, he said he was not sure how HP would achieve its desire to gain credibility in the graphics market by using a time-and-place distributor like Tech Pacific.
HP views the story differently. Greg Trigger, HP's national wholesale manager, said the restructure decision was taken after "engaging our wholesalers the whole way through".
He said the consolidation marks a significant change in HP's focus on this segment of the channel and believes Tech Pacific will introduce efficiencies into the supply chain for its large format printers that typically post an RRP of between $20,000 and $30,000 each.
"We have made a decision that we need to centralise the whole supply chain around Tech Pacific," he explained. "Somewhere along the way there are going to be a hell of a lot of freight costs carved out [of the channel]."
The refocus coincides with HP's push to promote its Large Format Image Partner program, which Trigger explains will no longer discriminate between current HP direct resellers and indirect resellers dealing with the distributors.
Tech Pacific's Cullen admitted the incumbent distributors may not be happy with the decision but argued Tech Pacific already had up to 60 per cent of the business so the effect of the decision would not be great. "There is always going to be an element of frustration from their side," he said.
Trigger claims the other distributors "understood" why HP made the decision.
"Both of them suggested the process was fair and [agreed] it was not a core business," he said.
Trigger said HP predicts it will gain revenues of between $15 and $20 million over the next 12 months from the DesignJet range.
Executives from Digiland were not available for comment by ARN's deadline.