It has now been three months since Tech Pacific acquired Merisel and became the largest distributor in Australia, but the question presently being asked by many resellers is "Has TechPac bitten off more than it can chew?"
In response to feedback from Australian Reseller News readers, ARN spoke to 10 resellers across Australia about their level of satisfaction with the performance of Tech Pacific. Criticisms included being unable to get through to the company on the telephone, pricing going up as a result of limited competition, product arriving either late, incorrect or not at all, and a general lack of interest in the reseller's business.
A number indicated they are actively looking for alternative forms of supply. Many of the resellers attributed the poor service to the staff at Tech Pacific being overworked, possibly as a result of the increase in business volume bought on by the Merisel acquisition.
Although he was presented with ARN's findings, Tech Pacific Australia managing director David Cullen declined to comment.
Sales manager of Sydney-based APEK David Bowden said prior to the buyout his company did a lot of business with Tech Pacific and Merisel. "You used to ring them, and sometimes you got held up, but in the main you got through and everything was fine. Now you can try all day and not get through. We can send an order in, and instead of getting it the next morning or the next afternoon it could be two days down the track," he said.
Bowden feels lack of competition from other distributors may be partly to blame. "Basically, now you've got two choices - you either deal with Tech Pacific or you don't get it. And what we're doing is ferreting around interstate or whatever to find individual dealers where we can buy things at least at the same price so that we needn't bother with them. It's become such a point that we're spending a lot of our money elsewhere. Of the 100 per cent that we used to buy from Tech Pacific we've dropped back to maybe 60 per cent now," he said.
Purchasing consultant at Geelong-based Evtek Systems, Ron Vahland, agrees that getting through to TechPac on the telephone is the hardest part. "We always found them to be considerate, courteous and helpful, but it seems very difficult to get a connection going. It's been tough simply to call them and have someone there. We thrive on our service level, because we can't compete down at the Green Guide pricing. So if we don't have the service there, that is going to steer a lot of people away from us to go for the bottom-end price," he said.
Word go to woe
Greg Robeille, manager at Mode Computers, says he has experienced numerous problems with lost invoices, wrong goods arriving and the responsiveness of the company, adding he has encountered problems with half of the 20 orders he has made in the last two months. As Mode Computers is located in southern NSW, Robeille said the lack of a 1800 number is also a problem. "And then you get put on hold from word go to woe. Ten minutes later you get someone and they don't know what you're talking about and then they put you on to someone else. It's hard to find out what they've got in stock and how much things are." Robeille told ARN about a recent problem of the wrong floppy disks being supplied and said it took four people's efforts before any progress was made on solving the problem. Later that day he was still awaiting a call from Tech Pacific.
Robeille says he is at the point of sourcing product elsewhere through companies such as DataFlow. "We don't compare prices, we just buy from DataFlow, because we know that DataFlow is so easy to deal with."
Nigel Mason, sales manager of Sydney-based Magmedia, believes stock pricing went up around two points when Merisel was purchased. He said in one instance the Microsoft Value Pack went from a dealer price of $501 to $517. "It's not a huge amount, but when you're quoted a price and you're losing $16 on something that is not a huge margin, $16 makes the difference." Mason said he also had some substantial orders for Windows NT based on pre-closure Merisel pricing, but when he checked with Tech Pacific after the buyout he found the price was three or four points higher. He confirmed the difference with another distributor based outside NSW.
"We don't only want cheap prices, what we need is service and to get something when we want it, because our customers want that. And Tech Pacific makes it difficult. I cringe when my clients ring me and want software I can only get from Tech Pacific," Mason said.
Earning the right to do business?
For Mark Roberts, sales manager of Standard Computers, high staff turnover has been the cause of problems. While he previously dealt with the same account manager for five years, he has now dealt with four account managers in the past nine months. Roberts believes that having a good contact at Tech Pacific is vital in doing effective business.
Mark Spence, owner of WA-based reseller Worldnet Systems, said that during his time working for a larger retailer he found Tech Pacific easier to deal with. Now that he is on his own he believes that has changed. "I constantly get the impression that I have to earn the right to do business with them." Spence said that while Tech Pacific's failure to provide pricing on quotes has been a major issue, he has also lost business due to orders going missing or incorrect product arriving.
Spence said that although he only does a limited amount of business with Tech Pacific now, this is due largely to most of his business with it having resulted in problems. On one occasion Spence said he ordered a copy of Lotus SmartSuite 96 on CD-ROM. After first being told it would arrive in a week, it arrived two weeks later marked "not for resale" and in disk format. He then waited a further eight weeks, and was then told the CD version was produced to order only. "I rang up Lotus, and they actually sent me a complimentary CD." Spence said Lotus also told him there was stock in Australia on CD all along. On three occasions Spence said he has been told the product would arrive the next day, only to receive a fax from Tech Pacific every time to say there would be a further one or two-week delay.