NSW-based distributor, BJE Enterprises, is closing its doors, effective immediately. According to a letter sent to customers on April 17, the decision followed a review of operations and discussions with vendors.
"It is clear that the role of distributors going forward is primarily one of fulfilment rather than value-add," BJE managing director, Bernard van't Hof, wrote. "The market is already well serviced by large distribution and courier companies prepared to operate on wafer-thin margins, with vendors more than happy to take up some or all of the value add."
Hof established the BJE business more than 25 years ago. Key vendor partners included D-Link, McAfee, Logitech and Labtec. He declined to disclose BJE's staff numbers.
Hof is now working with vendors to take back remaining stock and transition customers. BJE was focused on the retail market and worked with several key mass merchants including Harvey Norman, OfficeWorks, Bing Lee and Harris Technology.
"We have brilliant infrastructure which does everything efficiently - it's a shame to turn the switch off, which is effectively what we've done," he told ARN. "There's not many of us smaller players left, especially on the retail side, which is where most of our business has been over the last seven years.
"With three of us selling the same product into Harvey Norman, it's been game on."
Hof said selling the business could have been a realistic option a year ago, but he elected not to go down that route. He stressed BJE had been debt-free for the past six years.
"How the vendors work globally has changed their view of distribution even in the past year or two - they see distribution as a necessary evil, rather than a partnership. The message I got clearly was that vendors essentially want a fulfilment partner - one even told me the perfect distributor is a combination of a courier and a bank.
"As a small distributor, we offered a level of service and tremendous internal efficiencies, but courier is not the business I want to be in."
Hof plans to have a well-earned break and take stock of his options for the future.