letter to the editor Some things to some people

  • Ray Shaw (ARN)
  • 09 December, 1998 13:20

I respond to ARN's article "Poor customer service infuriates Servex reseller" (November 25, page 4) and the reply from Select Approach [ACT's AOpen distributor] "On the contrary, the service is excellent" (November 25, page 58).

Intermedia Computers was, and still is, one of Acer's first distributors of AOpen components since 1992. Some time later, the AOpen division was hived off to become Servex as the aims, objectives, philosophies and marketing strategies of Acer Computer Australia (brand name completed systems) were not complementary to AOpen (mass distributor of clone PCs and indeed a direct competitor to Acer).

Servex will never win our award for best supplier but neither will it win an award for the worst. AOpen (a division of Acer which Servex represents in Australia) is, on the other hand, the best "holistic" component supplier in the world, making a complete range of top-quality, highly compatible, award-winning products. We have built our reputation on AOpen and, believe me, if there were better products we would be selling them.

Box floggers

Back to Servex. My major complaint is that they have become "box floggers" - with them it's all volume, volume and more volume. When you buy, there is little recognition of how long you have been a loyal supporter of Acer or AOpen - it's all about how much you can buy. To their credit their RA system is not bad, with most products being repaired or replaced on a seven-day turnaround.

But no matter how nice their staff are, they don't have the manpower or the technical knowledge to support either a large dealer base or provide in-depth technical support for the products they sell. The latter is the distributor's job and we (as I am sure Select Approach) do a good job keeping up to date with all technical issues and keeping new BIOSs on our Web site etc.

The problem experienced by Programmer's Paradise is due to two reasons.

Firstly, Servex should never have embarked on the "volume" strategy which it has done over the past 12 months. Servex used to support its distributors and large OEMs well (hell it only had less than a dozen or so Australia wide) and margins were such that there was enough profit for a distributor to sell to a dealer. But Servex got greedy or ambitious or both and opened direct sales to small local dealers (who don't really have to buy any minimum quantity).

It set dealer direct pricing at a few per cent above the distributor's price. (How would you like to earn $2 on the sale of a $200 motherboard?) The end result was a massive increase in Servex's customer base, an inability to service it well, and a lowering of profit margin to distributors. As a consequence, this high-quality brand is being flogged just like any other cheap item. It's akin to BMW or Mercedes adopting a high-volume approach at low profit - it would spell the end of their prestige brands . . .

The second problem is that selling computer components or assembled systems is a specialist area. We occasionally discover small problems with compatibility. We knew about the Celeron issue weeks ago because we were amongst the first to sell these boards and processors.

We simply didn't release the product for sale until the matter was resolved. We are big enough to do that.

Smaller dealers don't often sell enough to see these issues (except when they happen at the 11th hour) nor do they feel any responsibility to resolve them. To them it is simply a board that doesn't work. I am sure that if Programmer's Paradise had purchased the boards from a legitimate AOpen distributor (who in turn bought it from Servex), the problem would not have occurred. It would not have with us.

Servex - get the message. Stop trying to be all things to all people and support your long-term loyal distributors. Adopt a strategy to return AOpen to a premier, prestige product that costs a little more. You only get what you pay for.

Ray Shaw

Managing Director

Intermedia Computers