Service, the bottom line

Service, the bottom line

Resellers appear indifferent to Tech Pacific's executive exodus, which has continued into 2002 with the resignation of Australian managing director David Cullen. The priority, regardless of who takes the chair, is whether the distributor will deliver on resellers' needs, and on this front the channel is a split field.

For large systems integrators and service providers, the battle between the top-tier disties for local market-share has reaped more proactive service and competitive pricing - benefits which have not filtered down to smaller operators.

For small resellers the problems of dealing with Tech Pac began 12 to 18 months ago, when the distributor set about decreasing its overheads by limiting small orders and matching technical support levels to the dollar value of stock ordered per month.

"[Tech Pac] aren't particularly cheap," said Sven Bjornsson, general manager of Arev Computer Centre in Sydney's Castle Hill. "They're $20 to $50 more expensive than anyone else, which on a product with a $100 margin is a substantial amount. But I was happy to order from them because it was easy and reliable."

However, for Bjornsson, Tech Pac's introduction of a small order fee in April last year (a $33 handling charge for orders of less than $1000) proved a deal breaker. The majority of Arev's product is now sourced though small disties like Altech, Global Business Technology (GBT) and Wholesale Printer Technology. Bjornsson said he is not tempted to switch back, despite Tech Pac's decision to revoke the small order fee - a move that suggested the initiative failed to improve the distributors' bottom line as anticipated.

Fintan Persse, manager of WA-based services firm Aussie IT, said he too scaled back his involvement with Tech Pac after the distributor's support started to deteriorate about 12 months ago. "Tech Pac divides their customers into categories based on spend. [Since then], technical support is nigh on impossible to get. We find it easier to source product from local WA disties such as Compu Wholesale and RDT," said Persse.

The ability to get the right stock quickly and at the best price means small resellers like Aussie IT and Arev are dealing with eight to 10 distributors at any one time. For larger resellers this number is reduced to three or four, and much of the support difficulties are overcome due to direct relationships with vendors.

"The differentiator for larger players is price, availability and quality of service in a logistical sense," said Stuart Hendry, managing director of services firm Logical. "We don't look to distributors for specialist technical support because we have it in-house or talk directly to the manufacturers."

At the same time, Hendry says this lack of dependency on support makes it hard for distributors to differentiate themselves, which in turn makes it easier for resellers, large or small, to move between distributors.

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