I rarely write to editors of newspapers or publications because I question their true independence. From your editorial in ARN, May 30 issue, I would deduce you derive a major portion of your revenue from the distributors (the advertisers) not the resellers (the readers).
I have been in the IT reseller channel for over 20 years and, take it from me, distributors (with a few isolated exceptions) do not promote a product, support the product or have much knowledge or care as to whether a product will do a job or not. Maybe that is why their returns are so high.
I applaud Acer for its decision to provide its own distribution and support. I have not sold Acer product, but I will be taking a good look it now. I see no similarity between Acer's move and what Compaq tried to do, nor what Dell is very successful at. I would also like to dispute the myth you perpetuate, that distribution only makes 3-5 points. On some product, 10-15 points is closer.
It was not that many years ago that resellers all dealt directly with the supplier and spoke to people who knew and supported their product, and saw the end user as their customer.
I believe Acer's decision is not a knee-jerk reaction but the correct one. Acer does not need thousands of dealers, but perhaps 100 strategically placed dealers who market and support its product. These people should be allowed to make reasonable margins and be encouraged to support sub-dealers. There are some companies in this industry that still do this and are, and always have been, successful. However they do keep it quiet to avoid ridicule from vested interests in the industry. Highly technical equipment requiring a high level of support does not lend itself to mass distribution by box movers.
As the resellers have told you, brand loyalty is not an issue; the customer/reseller rapport, support and service is paramount. My customers buy what I recommend they buy. They know it will do what I say it should and know I will ensure it does.
Congratulations Acer. I hope you make it work. The pendulum is beginning to swing.
Yours faithfully,Jeff Trimming, managing director, Atrix Business Products.
There is no doubting Acer's one-tier model will be closely observed by all in the channel and, if successful, is sure to be copied by others. Acer is also convinced it can make a go of it or else it wouldn't have taken the step.
My scepticism lies in Acer's ability to match the service levels offered by good distributors and its estimation of the costs involved in managing a multitude of debtor accounts.
I firmly believe there is a
big difference between a vendor bypassing distributors
to deal with a handful of premier resellers and managing accounts with every Tom, Dick and Harry reseller. Time will tell whether the vendor has hit a nail on the head or itself on the thumb.Ed.