In a victory for resellers, Tech Pacific has slashed its minimum order fee threshold from $1000 to $250. Orders under the value of $250 will still attract a $33 charge.
The fee had attracted widespread criticism from the channel since its introduction in May when Tech Pacific announced orders under $1000 would be subject to an additional charge. Many resellers vowed to use other distributors in light of the decision.
However, from the beginning of this month, only orders under $250, excluding GST, will draw Tech Pacific's $33 minimum purchase handling charge if ordered via fax, e-mail or regular mail. Orders placed via the distributor's TechLink online ordering site will only attract a $22 fee, excluding tax.
According to a letter obtained by ARN from Tech Pacific's managing director, David Cullen, destined for resellers, the same fee structure will also apply to all drop-ship orders.
The announcement has been met with praise from resellers, who feel vindicated that their pleas have finally been heard by the distribution giant.
"I think it is what they should have done in the first place," said Sigmacom's Mark Harwood. "$250 is a more realistic figure and quite workable. Small business people have to work on a just-in-time basis."
The managing director of Sydney-based reseller IT National, John Foxe, said he was "encouraged" by the decision. "We see it as a positive move," he told ARN. "I am happy Tech Pacific seems that to have been listening. It is of great benefit to our business because it means that the drop-ship program is more viable."
The $1000 minimum order had proven a boon for regional distributors, as resellers deserted Tech Pacific in search of more cost-effective options.
"We were taking away about $20,000 to $30,000 of business from them per month on principle," said Greg Youngberry, proprietor of reseller and OEM outfit Stud Computers in Townsville.
"I think they had to change it for the sheer impact on their business," said Sigmacom's Harwood. "My business will go back to Tech Pacific now because their system is very efficient and they have the volumes. The only reason we wouldn't deal with them was because of the minimum order fee."
However, for others the damage has already been done. "Unless a big black hole swallowed up every other distie, I won't purchase from Tech Pacific," said Adelaide-based retailer Rob Beaumont from the Berlin Wall Software Warehouse. "Express Data now gets my $30,000."
IT National's Foxe says that while he is happy to pay freight charges, he does not believe in a minimum order fee. "I think they have to drop the fee altogether."