Resellers' reaction to Compaq's plan

The revelation that Compaq is in the process of establishing a national retail chain has sent the channel into shock. Most feel threatened, some see it as an inevitable change in the face of competition from direct sales by Dell and Gateway. Others are even optimistic enough to call it an opportunity, if the current channel is given the option of participating in the new retail model.

"They [Compaq] will destroy their channel. Even if they revert to a 100 per cent channel model again after a year or so, they will never get the channel back. No one will give them a second chance.

"With HP and others also going direct via Web sites, the channel is not only concerned but distrustful of any manufacturer wanting a slice from their piece of the pie. Once that trust has gone so has the relationship and so have the sales."

Brenton Wight, managing director of reseller Binary Logic"I think the little reseller could be extinct by Christmas. The reason I say that is because of the massive build-up of computer inventory by the big retailers and the growth of online sales.

"I am not overly optimistic about the next six months. In retail, it is all boiling down to who has the best deals and the most marketing dollars. Unfortunately, that is not the little guy.

"It is going to be very difficult for anybody who has an expensive store - high rent values and other overheads. They are the ones that will cop it the toughest. The bigger your overheads, the faster you will sink when it hits the fan."

Don Bastian, proprietor of reseller Best Software and Computers"Compaq doesn't currently have the infrastructure or the core competencies to set up as a direct retailer.

"It wouldn't impact on our business as long as it's not in competition with our resellers. It all depends on what their target audience is, and what their plans for fulfilment are."

David Cullen, Tech Pacific managing director"Just because you are a great manufacturer of computers doesn't mean you will be a good retailer.

"Although they haven't been able to get me any specific details at this stage, they are telling me that all retailers, and certainly Harvey Norman, will be involved in those plans.

"We have had a very good relationship with Compaq over the last six years and it has been a very profitable one for both parties. I don't think that will change."

Tony Gattari, Harvey Norman's general manager, computers and communication"I have no major issue with the concept of Compaq franchises as long as it stays a level playing field.

"If they [the franchisees] get preferential treatment, that would piss me off, and also, I would hope it's available to existing resellers."

Derek Merdith, managing director of notebook specialist retailer, Laptopland