Synnex is collaborating with a select band of dealers nationally to establish WebShops for its 30,000-strong product line. But one reseller has hit out against the plan, claiming it could create further margin squeeze.
According to an email obtained by ARN that was authored by the distributor's WA branch manager, Billy Lin, the WebShop program was created to assist resellers wanting to penetrate the corporate space. It had chosen several partners around Australia to provide the tools and support necessary for each to run its own online store.
The trial will run until the end of the year. The distributor then plans to review the program and assess the viability of bringing on more dealers, according to the email. All products available on the site would be shipped directly from the nearest Synnex warehouse.
Perth reseller, Austin Computers, was one of the dealers selected to participate in the pilot program.
General manager, Chris Hicks, said the advantage was being able to provide all products lines that Synnex currently carried without having to store the goods in its own warehouse.
"About 90 per cent of the products are in stock at Synnex, so if a customer orders in the morning we can normally get it to them by the afternoon," he said.
"This gives us the opportunity to sell $20,000 printers we would never have carried in stock."
The Austin Online Megastore was launched last month.
It was hosted by Synnex and interfaced directly through to the distributor's database of products, Hicks said. As a result, Austin was restricted to listing only those products available from Synnex.
However, the reseller had the choice of which products it wanted to display on the site, and also determined the retail pricing.
Hicks said it was predominantly focused on the SME market.
"We have some products that don't go on the site because we can get them more competitively priced from somewhere else," he said. Because the costs of handling the stock had been removed, Hicks claimed he could also offer lower prices to customers.
But not everybody is pleased. General manager of WA-based PLE Computers, Jonathan Acaster, said the move was unethical and suggested it would bring the distributor into direct competition with its resellers.
Acaster also hit out at prices advertised on the Austin Online Megastore, claiming they were no more than 10 per cent above his store's buying price including GST.
He said this would force resellers to keep margins low in order to compete.
"I'd say this was the beginning of the end for the channel as we know it," Acaster said.
But Lin's email insisted the distributor was simply trying to improve its service to resellers and had no intention of going direct to end-users. Nobody at Synnex was available for comment at the time of going to press.