The direct channel is a flight away

The direct channel is a flight away

The direct channel is a flight away

If your first few weeks back at work have been anything like yours truly's, this year promises to become even more hectic.

From a news perspective, the surprise of mega mergers has proved an interesting start, but there is something more sinister going on, I'm afraid. Excuse me for sounding dramatic this early in the year, but I'm worried there is a real storm brewing that I suspect many of us have not had the time to notice.

I suspect vendors with direct intentions have their eye on new business partners outside the scope of what we like to think of as the traditional IT channel - logistics companies such as Federal Express, DHL and UPS.

The only thing that stops a FedEx from becoming part of the channel is a management decision to accept responsibility for the product it delivers, known as taking title. This gives it the ability to warehouse and resell product.

To illustrate, I read an article in our sister publication, Computerworld (US) last week and started thinking I'm glad I'm not a time and place distributor.

FDX Corp, now known simply as Federal Express, has announced a new service called FedEx Home Delivery in many major US markets.

Dan Sullivan, CEO of FedEx Home Delivery, said the service is for online shoppers who can customise delivery days and times, including scheduling deliveries on Saturdays and during the evening.

And here's the kicker - FedEx Home Delivery will also offer customers a money-back guarantee - the equivalent to taking title. Assuming FedEx starts delivering IT products such as PCs and peripherals, it will become part of the channel. But don't assume that just because it's in the US we will not be affected. Global logistics companies are by definition global, and extremely efficient.

Arguably, a company like FedEx has the ability to cut out both distributor and reseller if we assume the savvy online IT buyer does not need personal services such as home PC installation.

Of course the enterprise or high end of the reseller and distribution chain would appear safe for the moment. But I believe logistics companies have the ability to eat away at the existing crowded marketplace.

What would be interesting is if aggressive online retailers in Australia decide to avoid the local channel in favour of a deal with FedEx and its vendor partners.

All it takes is a central warehouse somewhere in the Asia-Pacific region and regular flights to key destinations to fulfil Web-based orders from either resellers or e-tailers.

In this issue we have introduced the Global Channels section (page 16) with the aim of providing you with an insight into the workings of the IT channel in regions such as the US, Europe, South Africa and Asia.

As the FedEx example indicates, it is becoming more important for the entire IT channel to watch the world with interest. No country is an island, as they say.

Specifically, Global Channels will use a combination of international stories from IDG's vast international editorial resources, in addition to local stories about Australian channel companies spreading their wings beyond our shores.

So, if you have a story to tell, let me know. In addition, do you agree or disagree with my concerns about the changing face of logistics? I look forward to hearing your opinions.

Mark Jones is editor of Australian Reseller News. Reach him at

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