Gateway: resellers add to users' costs

Gateway: resellers add to users' costs

Peter Lees, managing director of Gateway 2000, says that the company's recently announced corporate essentials program does not represent a move away from its direct sales approach.

The program will see Gateway seeking to drum up new sales via its existing partners and is part of the company's marketing drive offering customers a one stop shop for computing. Members include Wang Australia, finance company Interlease, Anixter and corporate training company Executrain.

"The corporate essentials program simply represents Gateway's attempt to establish a structure to sell its products," Lees said.

There are no contracts involved in the new agreement, according to Lees, which will work such that each member agrees to act as an "introduction agency" for the other companies.

"If the customer is dealing with Gateway 2000 we will introduce them to the other organisations and work with them as they progress through obtaining a total solution. The customer may also start by talking to any of the other business partners who would then introduce them to Gateway 2000."

Lees said that there were no hidden margins for any of the partners.

"We believe the future is direct, to cut out dealer profits and kickbacks," he said.

While Gateway has typically been strong in the small business and consumer market, this program is aimed at giving the company a leg up into the corporate and government sectors where rival direct seller Dell has a firm footing. Specifically, Gateway is pushing to win back its position on the Government's preferred supplier list which it once had as the late Osborne.

According to Rob Small, marketing manager at Dell Australia, the government and corporate sectors are particularly demanding of value added services.

Small said that while the direct sales model enables companies like Dell and Gateway to offer customers, amongst other things, faster delivery times, winning the big government and corporate contracts requires help from value adding partners.

"The traditional channel has failed to offer this to manufacturers," Small said. "Resellers have to look at what their area of speciality is."

Small said that Dell already has similar agreements in place with its business partners which include Wang. He said this should deliver a hard message to resellers. The big manufacturers are finding that they must add considerable value to their products in order to remain competitive. And, whether it be technical support, training or after-sales service they don't seem to be able to find it through the traditional channel.

The latest evidence can be found in recent industry rumours that both Compaq and AST are considering more direct sales and distribution models.

Managing director of Compaq Australia Ian Penman "has said himself that Compaq's sales model is flawed", Lees said"The erosion of the traditional channel is merely a process of maturation for the industry," Small said.

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