BC: In terms of establishing an industry body, how serious are these conversations among larger resellers?
SE: There's a groundswell, certainly. The larger resellers will act as one to move the industry back into profitability.
MH: It stands to reason that if 3 per cent is an average return in the core hardware space, people will find a way to adjust their businesses and get out of it - be that telecommunications or just pure services. There will always be somebody else coming up through the ranks but are they going to do a decent job and represent the vendors well?
CM: It [a reseller organisation] would benefit the whole industry and I would subscribe to it.
BC: What would be the next step in making that happen?
DA: I don't think it's going to happen.
BC: Why? What are the barriers?
DA: You can't stop people from opening accounts with Ingram or any other distributor; you can't stop people from approaching customers. It's ludicrous; it's not going to happen. There are some pretty high profile resellers in this room. If we don't have good enough relationships with the vendors and distributors to be able to get better discounts then we shouldn't be in this business. These one-man bands shouldn't bother us at all.
MH: When some of those guys turn up as a consultant at a good client of yours and are happy to make two points on a reasonable buy price, which causes you to drop your pants and destabilise the margin, that's when it becomes a problem, and it is evident.
MB: With some of the industry bodies that are being set up it is Data3#, Volante and all the usual suspects. You can't change an industry in the way the big enterprise resellers want to see it run. There are a lot of good operators out there running small businesses. I take your point that there are a hell of a lot out there that might order one or two products a month and take an opportunistic approach to hammer the margin down. But without hearing those voices, an industry body won't work in my opinion.
MH: Fundamentally, if somebody is buying from a wholesaler it should be for the purpose of reselling. And yet if you are a software developer, you can get an account with anybody. Is that right?
MB: If you are offering services, is that any more of a reason to be given access to product? There are so many different arguments out there.
MH: There are but you have to start somewhere. I think the big disties are certainly prepared to listen. They have got a lot riding on four or five major accounts that would represent 30-40 per cent of their business.
MB: There should be minimum spend or minimum frequency. I thought [former Tech Pacific boss] David Cullen had the right idea but the $1000 mark [per order] was just a bit high. We are probably one of the worst offenders - we haven't stopped a single item in the 13 years I have been doing business. Even if somebody orders a $15 ink cartridge it is still up to Ingram to deliver it. We are certainly not going to stock it, shelve it, price protect it and hope somebody comes along to order it.