The last eight months may have been turbulent for Digiland, but the Victorian-based distributor is rapidly winning back the confidence of its vendor and reseller partners. Last week, Digiland announced it had been reappointed as an Epson Gold Seal Distributor. The company has also signed several new customers - most of them HP’ direct resellers forced to realign under the new and tougher HP credit terms.
Digiland lost its Epson Gold Seal Distributor status in November last year after it was discovered parallel importing Epson cartridges from Malaysia and selling the product at reduced rates. The distributor was supplying the grey marketed products in Western Australia, where it was not registered to distribute Epson cartridges. This was followed by the resignation of its former managing director, CN Low, in March.
Epson re-accepted Digiland under its Gold Seal Program after conducting months of auditing and training to ensure all Digiland staff understood the compliance conditions of the program.
The basic requirement for participation in the Gold Seal program is that distributors purchase Epson consumables only from Epson Australia, which the vendor polices by carrying out regular audits on its 14 Gold Seal distributors.
However, Epson’s auditing processes have done nothing to douse rumours that other Gold Seal distributors are or have been parallel importing Epson stock.
Director of marketing communications for Epson, Michael Pleasants, said he was aware of the rumours, but the vendor has found no conclusive evidence to substantiate the claims.
Recently appointed managing director of Digiland, Paul Kruss, said he was pleased with the re-appointment and was eager to put the Digiland’s past behind it.
“We’ve been working very closely with Epson to rebuild the relationship and show that we’re an important business to them,” he said.
There are no rebates involved in being a Gold Seal member so inclusion is purely a stamp of integrity. Pleasants said the effectiveness of the scheme depended on the regard in which it is held by the industry at large.
"The Epson Gold Seal Distributor program ensures that customers have confidence that they are purchasing genuine Epson consumables from reliable and trusted resellers. Without this high level of trust and confidence throughout the channel, the relationships between vendor, distributors and resellers may break down,” he said.
The biggest impact caused by the loss of its Gold Seal status was the loss of customer confidence in the distributor, Kruss said. Since taking the helm last month from former MD CN Low, Kruss said he had been focusing on developing customer relationships and rebuilding customer confidence.
“Digiland is getting back to what it did well – we had a great reputation for getting close to customers in every State we operated in," he said. "Since I’ve started I’ve been spending a lot of time make sure we’re focusing on our core strength.
“In the last six months we’ve rationalised our position in order to grow, we expect to grow 20 to 30 per cent in the next 12 months.” Kruss said that he was not concerned that the possible Dicker Data/eXeed merger would impact Digiland’s business, maintaining that although there was some cross over in the markets that they serviced, their businesses focused on different areas in the market.
He said Digiland had been busy signing up new HP resellers that used to deal directly with the vendor. HP’s recent enforcement of its credit terms with direct resellers is presenting the distributor with new customer opportunities.
”It’s been a fantastic opportunity for us," Kruss said. "We’re starting to engage a lot of the directs [direct resellers] that are now indirect; they are key customers that we believe we can help sell HP effectively.”