Philips strategy stirs up anger in the channel

Philips strategy stirs up anger in the channel

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.

Approved Systems director Jim Willis confirmed that Philips was supplying monitors direct to it 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 sights.

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. The problem for Philips is - if or when it appoints a replacement distributor - it will need to re-establish some channel pricing integrity.

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