Distributors draw lines in the sand

Distributors draw lines in the sand

The appointment of Drive Control Corporation (DCC) as Western Digital's second distributor in Australia has raised the ire of the existing distributor Westan. Westan claims that DCC is trying to "buy market share" by undercutting the price of drives to unsustainable levels. DCC, in turn, says there is enough room in the Australian market for both distributors to build sustainable businesses.

Brad Darch, director of DCC, told ARN categorically that DCC is "not out to beat Westan -- just to improve Western Digital's position". He said that DCC is not going to try and lure resellers away from Westan, but instead will target resellers now selling Seagate or Quantum drives.

Maybe so, but it appears DCC has been in contact with at least one long-standing Westan reseller, Achim Schiller of MBI.

Schiller told ARN that MBI had received "many faxes and phone calls" from DCC, offering "ridiculously low-priced" drives. He said that MBI was sticking with Westan, because "the relationship you build with a distributor is extremely important".

When pressed, DCC's Darch told ARN that targeting existing Western Digital customers (Westan customers) had been a strategy earlier this year, but that the direction of the company's marketing had changed since then, and "if we're talking to any existing Westan resellers now, it's purely by accident".

Service the key

The strategy for DCC involves aggressive marketing (aided by Western Digital itself), along with "a high emphasis on service", with warranty replacement of drives within 24 hours and other extras promised for resellers.

Victor Tan, Westan's managing director, told ARN he didn't believe that his business would be affected in the short term, because of the loyalty of his customers. Longer term, he felt that DCC's pricing structures could not be maintained, and resellers would doubt the stability of DCC's business. He said that DCC had deliberately tried to lure Westan's partners away.

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