A new equity deal with Digiland, the details of which still are not finalised, has given distributor eXeed the impetus to triple its vendor partners in the space of a fortnight.
Several weeks ago, eXeed was operating purely as a distributor of HP products, before announcing a move into the telecommunications space as a distributor for Hutchison’s 3G products.
Three weeks ago, Digiland announced that it would exit the brand name distribution business and focus purely on the whitebox market. The company would also hand over to eXeed its customer databases and brand name vendor relationships in return for a stake in the distributor.
The details of this equity stake are still not finalised, according to eXeed managing director, Michael Bosnar. “[Digiland] would like it to be a majority stake,” he said.
In the meantime, eXeed has taken on two of Digiland’s former vendor partners – Acer and Emerson (UPS) - and hired five former Digiland staff.
While doubling your vendor partners overnight might seem a tough ask, it is only the beginning for eXeed’s ambitions. The distributor has also signed new agreements with two additional vendor partners, Fuji-Xerox printing and Fujitsu (servers).
“We want to have a select number of best of breed suppliers in three categories – servers, mobility and print solutions,” Bosnar said.
In the next few weeks, eXeed is likely to announce distribution relationships with several more vendors, he said.
Only one of the five additional partners eXeed was looking to partner with were former Digiland vendor partners, Bosnar said.
Epson, one of Digiland’s key vendor partners, might remain with its existing distributor [Digiland] to focus on the whitebox market, he said. The distribution of Fujitsu notebooks was also still under negotiation.
Bosnar said there were new logistical arrangements in place with all of the new vendors to ensure fast product delivery to resellers.
He said that despite eXeed’s emphasis on sales and marketing support (over warehousing), eXeed was still holding some stock in its Sydney, Melbourne and Brisbane warehouse space.
“There are some hot items our customers will need the following day,” he said. “Holding nil stock would be ideal but it isn’t feasible when you are relying on other parties’ supply chain.”
Bosnar said the appointment of multiple vendor partners was a way of ensuring eXeed spread its risk.
“The reliance on HP, when there is not a huge amount of margin, when there are questions over their direct versus indirect strategy, would be quite dangerous,” he said. “It is not wise to have your total business locked up in one area.”
Bosnar feels the same way about IT products in general.
“We are placing less reliance on IT products, hence our move into mobility products,” he said.
Bosnar said he expected HP would make more changes to its channel structure in the near future.