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EDITORIAL Australian distributors, don't look . . . you're on the menu!

EDITORIAL Australian distributors, don't look . . . you're on the menu!

Forgive me for sounding too parochial as I scan the marketplace, but it's time for Australian distributors to stand up and be counted; be creative and fight for what's yours. Or accept the consequences of living in a market chock-full of head-kicking "global" distributors intent on world domination.

Yes, that's right. The globalisation of the Australian distribution market is taking place by stealth.

Consider the list of "global" distributors which have made their way into Australian Reseller News over the last few months.

Hogging most of the limelight has been US giant Ingram Micro (see ARN December 3, page 5 and April 29, page 1). Other vultures such as Westcon, Brocker Investments, CHS Electronics, Avnet/Hall-Mark, and Viking Office Products, are impatiently circling.

What they are ready to sink their chops into is an insular distribution marketplace in desperate need of a clean-out, restructure . . . and more.

Sure, the likes of Tech Pacific and Express Data will stave off the vultures - such is their patronage and priceless value to the IT industry. However, it's the second-tier distributors that are on the menu.

Consider Ingram's comments about "a number of second-tier distributors" that are "failing to perform". What about Westcon's "we are Westcon and we will do what is best for Westcon"? And then there's the claim that "Australia has not seen the level of value-added distribution that Hall-Mark will deliver".

Call me a rabble-rouser, but I can't help thinking that resellers might jump at the chance to get a piece of this "new level of value-added distribution" action, for example, simply because it offers them something that seems unique.

And I can't help but think that loyalty counts for very little - margin is king and "value-add" is the magic word.

Take, for example, Toshiba distribution. Toshiba notebooks are going gangbusters but where are the margins?

Prion's managing director Michael Bosnar predicted that with two new national distributors in Dicker Data and CHA, margins will "probably drop" from a healthy 4 per cent.

Take a hint, Michael. Invest in niche markets, set up in booming Asia, set up a distribution co-op, and learn from Edge Technology and invest in the US. But do it now - the vultures are squawking.


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