Consumables market a boon for channel

Consumables market a boon for channel

For years now resellers, distributors and vendors have built their livelihoods on sales of printers, fax machines and an assortment of hardware and software products only to largely ignore the sleeping profit giant that is consumables and supplies.

And make no bones about it, if you're into gross profit the next two years will be the time to break into the market, according to local market research group Standard & Poor. The research company estimates that printer cartridges now generate more sales than salty snack foods, despite not being readily available through convenience locations.

Riding this tidal wave of success is value-added wholesale distributor Daisytek Australia and its 3000 active resellers. Last October, Daisytek acquired the then leading distributor of computer consumables Lasercharge, and has just posted $36 million in revenue from consumable sales.

Its secret, according to Daisytek managing director Paul Connelly, is simple. Understand that the needs of end users are changing and that resellers, distributors and vendors can no longer conduct business while carrying the costs of warehousing and freighting.

"The channel is experiencing a flattening of margins right now," Connelly claimed.

"Unless organisations want to become channel dinosaurs they will need to seriously consider changing their distribution strategies and embrace new technologies such as electronic commerce to drive cost savings," he added.

Connelly said that one of Daisytek's best assets is its ability to act as a middleman between resellers and customers by warehousing consumables and then shipping the product direct to the end user.

Daisytek's marketing manager, Illka Gobius, refered to a couple of trials the company has set up for Harvey Norman and BP Express. Daisytek installed a touch screen kiosk in one of Harvey Norman's Sydney stores that links back to Daisytek's warehouse in Alexandria. If a customer wants a product that is not on Harvey Norman's shelves Daisytek can deliver it direct to the customer.

BP Express has also been targeted for the sale of inkjet printer cartridges at about $50 a piece. Connelly said the initiative "generates a lot of in- store traffic and is a glimpse of what could be 24-hour access to consumable products for home users".


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