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UP THE CHANNEL: Naming and Shaming

UP THE CHANNEL: Naming and Shaming

A customer buys a product from an IT reseller, which fails during the warranty period. The customer takes it back, full of angst, to the reseller, who tests it because many disties charge a testing fee if it is not faulty. Having established that it is faulty and that there isn’t a replacement in stock (you might ask why it should be replaced from new stock anyway), the reseller sends it back to the distie at his own expense, where it is tested at leisure and, sometimes very much later, a replacement is sent out.

In theory this is fine but the delay from start to finish is seldom less than a week, usually a month and very frequently even longer. It seems that the cheaper the goods, the longer the repair or replacement times involved. In cases of longer waits, state consumer laws mean resellers are often forced to refund or replace products because they are deemed to be the supplier. Financially, the delay increases cost for the reseller while also further straining relations with an already unhappy customer. And even when the reseller does finally get a repaired product back from the distributor it can often be difficult to sell at a profit because prices have dropped in the interim.

I have heard from ethical resellers that the cost of providing consumer warranty is about five per cent of turnover. They moan that when you are selling goods at very low profit margins customer service is the first thing to go.

It is time that the whole channel — importers, disties and resellers — looked carefully at the relevant consumer laws and adopted some standards: like consumer warranties that start from the point of sale to the customer, not to the reseller; like guaranteed return authorisation (RA) turnaround times; like offering refunds for goods no longer available; like new for old replacements. This might sound like some kind of Nirvana but it has to happen or we risk the wrath of the legislators. Most other white and brown goods have moved to these models and are reaping the benefits of increased consumer loyalty and profits.

Meeting these standards would inevitably have a compliance cost but might also help to stop the downwards margin trend. I think consumers would vote with their wallets if a salesperson said: “Would you rather have brand X — a cheap grey market import with a pathetic, almost non-existent warranty — or spend a little more for Brand Y with a full, money back consumer warranty?”

Some disties do a really good job in managing RA (a euphemistic two-letter acronym for faulty goods) but most do not. Come on resellers — nominate good or bad disties and tell me your horror stories — a list might just shake up the industry.


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