Letter to the Editor: Remaining relevant in distribution

Letter to the Editor: Remaining relevant in distribution

Dear Editor, Hardware distribution is reverting to the early/mid 90’s model with the re-emergence of grey market/parallel importers making it tough for any legitimate Australian distributor, especially those in the highly commoditised PC hardware space.

For example, legitimate distributors Ingram Micro offer (as at July 24, 2009): § Intel E8500 retail box Core 2 Duo for around $274 inc GST. Grey market for around $239 saving $35. Direct import from China $US180 ($220). § MS Vista Home Basic OEM $118 (3 pack price). Grey market for around $90 saving $29. Direct import $US60 ($74) § Seagate ST3500418AS 500GB hard disk $83. Grey market for around $68 saving $15. Direct import $US50 ($62) § Kingston 2GB DDR3 $76. Grey market $49 saving $27. Direct import $US32 ($40)

These are all genuine products, not remarked or counterfeit – the latter can be obtained even more cheaply. A Whitebox assembler can save about $150 off a PC simply by going grey. Warranty issues are few and even the grey importers offer 12 months - all the consumer is entitled to. TodayTech’s departure from Intel was more because it has always tried to be an aggressively priced distributor and it could not compete with the grey importers whilst remaining faithful to Intel. If Jack Zhong, a very canny operator, wants to he can now offer loyal dealers parallel imported products and make more money than being a legitimate Australian distributor.

It is not Ingram Micro’s or any other legitimate distributors fault that they have to sell at a higher price – it's an ingrained part of the Australian distribution scene where the importers (Intel, Microsoft, et al) have to add margins to their landed prices to cover promotion, advertising, rebates, incentives etc., now demanded by larger chain store retailers but this has the unintended effect of driving smaller retailers to grey sources in droves. Perhaps its time major importers had a “no-frills” price and a more hardly normal price.

Ray Shaw AMM, AFMEA, FPRIA, AJA, B.Bus Com. IT JOURNALIST Intermedia Group of Companies and Event Planners Australia

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