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Editorial: Skimming the cream

Editorial: Skimming the cream

Despite having spoken to more than half a dozen HP imaging and printing group (IPG) partners this week, the reasoning behind its decision to double the number of dealers with direct access remained unclear (see page 1 of ARN October 26 edition).

From a reseller perspective, it will give the new 'direct club' members another option when it comes to sourcing product. But the general consensus seems to be that it will have little effect on the way most of them do business.

Executives from two companies that have recently been given access to direct pricing, Data#3 and Southern Cross, seemed underwhelmed when contacted by ARN this week. Both already had direct access to HP personal systems group (PSG) products, but one thing that was clear from talking to them is that neither had been lobbying HP for the right to bypass distribution. In fact, they were both unable to tell ARN why HP had decided to make the change.

According to several dealers that can buy direct, HP pricing is little different to that of the distributor that has been selling to these companies, Ingram Micro. Which raises an important question: Why exactly has HP decided to skim more cream from the top of its dealer channel?

It took an eleventh hour phone call from the head of its IPG Asia-Pacific operations, Rebekah O'Flaherty, to set the record straight. While her suggestion that it has taken three years to align tier one PSG and IPG dealers following the Compaq merger is surprising, it is believable. Synnex managing director, Frank Sheu, admitted his distribution model would be pretty much unaffected by the realignment because it concentrates largely on SMB business. But whatever the reasoning, it must be a bit of a kick in the teeth for Ingram Micro, which stands to take a hit from the new arrangement.

While it is important to remember no resellers have been adversely affected by the decision to extend direct access to IPG products, conversations with several of them suggested they were unhappy with the continued progress HP has made along the direct to end-user path during the past couple of years. This trend is probably more prevalent in IPG than anywhere else in the HP Australia business.

About 15 months ago, IPG announced it was going to take as many as 200 of its largest end-users direct in an attempt to convert them to a cost per page model. This was most likely a response to lagging behind traditional copier heavyweights like Canon and Xerox in the converging printer/copier channel. These companies had clearly stolen a march on HP in that space.

Despite the reasons given by HP, it has proved to be a less than popular move with resellers. Several have since indicated that they were looking to move away from HP imaging and printing in favour of vendors that they believed treated them as more valued business partners. After all, there are two sides to every partnership satisfaction sheet and it isn't like there's a shortage of printer vendors in the market.

On a lighter note, it will be November next week and the Christmas retail rush is about to get into full swing. With that in mind, we have had a chat with several resellers and vendors in an attempt to give you a flavour of what will top this year's selling charts. Anybody that hasn't realised iPod's nano and Sony's PSP will be big sellers has probably spent the past few months living in a cave. But neither of those is going to swell profits anytime soon.

The key to this Christmas, in much the same way as it was last year, will be to accessorise. Lead with the hot ticket items but make sure you have plenty of bits and pieces in the sub-$200 category to keep those numbers ticking over. Let's hope a happy and profitable time is had by all.


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