Philips has angered its former distributor Vantage Point Technology by dealing directly with a reseller.
The action has additionally caused a dilemma for Philips in regard to its monitor products channel strategy (see ARN, May 27, page 10). By supplying product direct to resellers, it could be cutting across its established distributors, and this is what has raised Vantage Point's ire.
ARN has learned that following the cancellation of its distribution arrangement with Vantage Point, Philips moved to supply monitors direct to Canberra-based system integrator Approved Systems.
It is understood that Philips has extended what amounted to its previous distributor's price to Approved Systems. The move comes in consideration of the contracted business in its pipeline, and coinciding with a price drop as well as a further "special offer for May". In effect, Vantage Point now finds itself competing with its former supplier for its customer's business.
This follows a successful tender by Approved Systems, which includes the supply of a large number of Philips monitors to the Health Insurance Commission (HIC).
Steve Stuart, managing director of Vantage Point, told ARN that despite not dealing direct with the local Philips subsidiary, his company has still been able to source Philips' product to maintain its existing customers. He added that as a specialist monitor distributor Vantage Point is also supplying Sony, Panasonic and Acer.
Approved Systems director Jim Willis confirmed that Philips was supplying monitors direct to them for the HIC contract, and that he was very happy with its service. He added that Philips national sales manager Norelle Parker had been on hand to oversee the delivery of a recent consignment of monitors to one of the HIC Sydney sites.
Philips monitor business unit manager Jacqui Begbie confirmed that Philips is keen to support its channel, especially resellers like Approved Systems, which is willing to promote its products.
"Our distributor price will apply to distributors. They buy containers of product, warehouse them and provide support to their dealers," Begbie said. "We will also extend prices direct to resellers that buy in large quantities."
The problem for Philips is -- if or when it appoints a replacement distributor -- it will need to re-establish some channel pricing integrity, and state the criteria by which it extends virtual distributor pricing to selected resellers.