Tech Pac's service fees

Tech Pac's service fees

As part of the company restructuring announced last week, Tech Pacific has hit its reseller partners with a service and handling charge for orders with invoice values of less than $1000 at the same time as toughening up its no-fault-returns policy.

In a letter to all its resellers - a copy of which has been obtained by ARN - Tech Pac announced that from May 14, resellers submitting orders under $1000 by phone, fax, e-mail or post will be charged $33. Meanwhile, orders received via the TechLink Web site will attract a lower $22 handling charge.

Tech Pac MD David Cullen defended the move, explaining it is designed to encourage resellers to consolidate their orders and run their businesses more efficiently.

"We have come to the conclusion that orders of under $1000 are inefficient, unproductive and unprofitable," Cullen said. "As a broad-based distributor we have to maintain high levels of efficiency. This is not a revenue push, it aims to drive resellers to be more aware of their own work practices."

While Tech Pac may well have good reasons for implementing such fees, small resellers feel they are getting the thin edge of the wedge.

However, it appears the other distributors have no intention of following Tech Pac's lead.

Renato Catalan, marketing executive for distributor Achieva, believes it is important for distributors to remain flexible and attuned to the requirements of even their smallest resellers.

"We don't charge a handling fee," Catalan said. "Even if people are small we are prepared to take the risk in order to grow their business."

Catalan believes fees or restrictions on less lucrative orders would restrict reseller flexibility and complicate the business models of some of the smaller resellers.

Others in the industry see some sense in the Tech Pac move, admitting they are often forced to fulfil smaller orders at a loss. Fiona Dicker, managing director of Dicker Data, confirms the company has no plans to implement a minimum order system, but does not rule out the move in the future.

"We don't have any plans to do this at the moment," she said. "But I guess we will have to see how the market goes."

Regional players have responded favourably to the move, pointing out they stand to gain from disenfranchised Tech Pac resellers. David Hein, marketing manager of Adelaide-based Hitech Distribution, said that while orders were occasionally taken at a loss, keeping resellers on-side was a central business objective.

"I can understand why it may not be worth their while to deal with smaller orders," Hein said. "From our perspective we are used to dealing with some very small companies, so we adapt to their needs."

However, Tech Pac's Cullen stands by the servicing fee decision.

"We are in this business for the long haul, and that means maintaining a business model based on profitable practices," Cullen said. "Besides, if you are placing orders under $1000 you have to ask yourself if you are a real reseller."

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