I am writing to you in response to the article you wrote on Tech Pacific in a recent edition of Australian Reseller News (see ARN, June 10, page 58). We at CHA would welcome the opportunity to present our side of the story as one of the distributors that David Cullen so openly blasted.
Whilst I don't want to start a slanging match, I believe there were a number of points raised by David Cullen that were somewhat inaccurate.
He spoke of "a number of their more aggressive competitors who have been making some acquisitions recently" saying that such distributors are selling on price alone. This is one of the biggest untruths that I have heard in a long time as CHA sell on price alone.
There have certainly been times when I've gone to market at low prices for a competitive reason; however, our business has been and will continue to remain profitable by not participating in ludicrous price wars. He also raised the issue of such organisations not having the capital behind them to back up their strategies and I can say that this is also untrue.
Capturing market share
CHA is amongst many other distributors with revenues around the $100 million dollar mark that are all well backed by groups that have strong support in financial circles!
A funny example is with Toshiba notebooks at the moment. Tech Pacific is selling this product at a 1 per cent margin, however David condemns his competitors for selling at ridiculous margins of 1 per cent!
That's just one example and I could give you many more where Tech Pacific is setting the prices amongst distributors by going in at margins that are low just to try and capture market share.
The funny thing is that it can't offer much value add other than offering resellers the ability to look up their stock on the Techlink Web site.
Value add surely means so much more than that! Do they have a technical support team to back up the product and guide the reseller through setting up a particular solution?
I find it somewhat naive that David so openly mocks the likes of Ingram Micro, CHS and the other global distribution goliaths. These companies are coming to town and they are not planning on being quiet about it!
Their weaponry is smart and sophisticated and they are going to come to market offering some of the best world class distribution systems that this country has ever seen.
All I can say is that if David continues to take this approach, then his company is going to suffer - as these companies have Tech Pacific in their sights as the number one target and they'll do whatever it takes to knock it off its perch.
At the end of the day I think there's more to this story than meets the eye.
National marketing manager, CHA
My comments below refer to items published in the June 3, 1998 issue of Australian Reseller News.
On page 68, Paul Zucker is reported as saying (among other things): "Our charter is to give fair and balanced coverage . . . and . . . it isn't about using our position to have an unjustifiable go at someone we've taken a disliking to, either."
Well said; however, it appears your news editor, Mr Cameron Tomes, is not aware of that philosophy.
On page six a prominent headline reads "Rejection forces Westcon to eat its words". The body of that report indicates that a statement dated May 12 was released by 3Com in Australia to the effect that "Westcon to take control in Australia and New Zealand" and that the same press release was issued by Westcon two days later.
It appears that a 3Com New Zealand executive subsequently challenged the accuracy of the release by 3Com Australia (which I understand is the headquarters for 3Com in both Australia and New Zealand).
It then appears that Westcon has diplomatically backed away from the NZ situation. Your headline, with its connotation that somehow Westcon has done something deserving of ridicule, (which is how, as a reasonable man, I read it) is hardly supported by the story which, if anything, indicates a problem between 3Com executives in Australia and New Zealand.
On page 24, in an editorial by your Mr Tomes, Westcon is described as a "vulture" in the sentence "other vultures such as Westcon . . ."
It seems to me that to describe any company as a "vulture" without significantly more justification than Mr Tomes was able to provide in this edit-orial piece again displays a dangerous lack of balance as well as a lack of understanding of the realities of the world of commerce.
I do not believe it excusable for this person to simply brand himself as a "rabble-rouser" in order to overcome the basics of the laws of libel and your own magazine's stated policy of fair and balanced coverage.
Mr Tomes' effort to support his premise by asking the reader to consider - "What about Westcon's 'we are Westcon and we will do what is best for Westcon'?" - adds nothing to justify his "vulture" analogy. That philosophy is precisely what the directors of any company (including your own) must embrace as a matter of law.
Mr Tomes' reporting appears significantly less than balanced when it comes to the company Westcon.
McDonell Business Solutions
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