After more than two years of happy matrimony, inkjet distributor Star Micronics has dumped Lexmark in favour of Minolta. But Lexmark wasted little time securing a replacement by announcing Synnex as the new national distributor of its inkjets, low-end lasers and associated consumables.
Leon Howe, managing director of Star Micronics told ARN last week his contract with Lexmark had served its term and falling margins on inkjets meant it was "no longer a market we want to address".
He said it was a "bastardised" market with heavy infiltration from sales tax evaders and that he didn't want to have anything to do with it.
"We wanted to build up the laser side of the business where margins are much better. We informed Lexmark we would prefer to be out of its multi-distributor model and that we are going with Minolta because they gave us exclusive distribution rights," said Howe.
"Minolta has a good range and I didn't want my sales guys trying to sell two competing products. There would have been a conflict of interests if we were catering to two masters," he said. "Naturally, we now want to build up the Minolta side of the business which I am very confident of achieving. I think Minolta is one of the few lasers that can really attack Hewlett-Packard."
Michael O'Halloran, national distribution manager at Lexmark said Star played a pivotal role in getting its inkjet products to consumer mass markets and that sales generated by the partnership were significant.
"Most of the business they did with us was to do with inkjets but lasers were also in the equation. The value of the business they did for us would be measured in the millions of dollars," said O'Halloran. Howe claimed Star was selling as much as 80 per cent of Lexmark's inkjets.
O'Halloran said Lexmark could not provide the higher margins being sought by the distributor. "I'd like to think we parted on amicable terms," he said. "They really helped us get a foot into the inkjet market and get the Lexmark brand recognised."
Both Howe and O'Halloran pointed out that Star would continue selling Lexmark inkjets in New Zealand where margins have not totally disappeared.