Axed resellers urge rethink
- 13 August, 2006 14:09
Terminated resellers have accused Ingram Micro of challenging the validity of smaller players. The claim follows the broad-based distributor's decision to close more than 3000 inactive accounts.
But Ingram has insisted it will retain bona fide resellers that can present a valid argument for having an account.
Blue Mountains, NSW-based IT consultancy, RedRock Solutions, was one partner to receive a termination letter.
Company owner, Paul Julian, said he had written to Ingram expressing his dissatisfaction.
"My concern is that I am going to have to buy from another company that adds more margin to the sale," he said. "I am a reseller and should be able to buy from a distributor."
Julian said his average Ingram spend could fluctuate from nothing one month to $2000 the next. In recent times, he had sourced product from a partner that had a larger account with Ingram to ensure quicker delivery times.
"I just did a job with $35,000 worth of gear, including high-capacity HP SCSI drives," he said.
"More than half of this would have been bought from my other supplier through Ingram.
"Most of my customers are small businesses that don't spend hundreds of thousands of dollars on equipment in a year. But when they need stuff, they need it quickly. I have to buy big-ticket items through Ingram."
Home and small business IT provider, JLW Information and Technology, also had its account closed.
Staffer, Warren Campbell, said the Blacktown, NSW company had been sourcing HP and IBM PCs, clone machines, peripherals and software. Its monthly spend was just under $1000 per month.
"A few months back we spent about $30,000. But there could also be odd months where we didn't purchase anything," he said.
Campbell said JLW had integrated Ingram's pricing list into its accounting system, which staff accessed remotely via PDAs. It also used the information for its online store. It was now looking for an alternative supplier to offer similar facilities.
"We want to give the best service with the least amount of hassle or our customers will go elsewhere," he said.
As previously reported in ARN, Ingram has closed about 3000 accounts from August 1. Those who spent under $1000 per month over the past three quarters were sent termination letters.
Commercial and solutions director, John Walters, said the notification included a feedback form allowing unhappy resellers to state a case for being retained. Ingram had already received 600 responses, with at least half of those aiming for reinstatement.
Rather than severing ties with infrequent buyers, Julian suggested Ingram limit them to online purchasing.
"I use the Web 99 per cent time of the time and it covers my needs," he said. "It's a convenient way to purchase goods. It also means you're not using Ingram's in-house resources as much."
While agreeing the idea was theoretically sound, Walters said many resellers would still call trying to get a better price. He argued those purchasing stock infrequently should go to larger resellers, such as Harris Technology or Corporate Express, or order from Ingram's sub-distributors.
"Is their core business reselling stock, or are they doing this only when a specific opportunity comes up?" Walters asked. "We get a lot of complaints from other resellers when we sell to these guys. If someone isn't spending $1000 per month, I'm not sure they are bona fide.
"We have a group of high quality resellers spending $20,000-$100,000 per year. We're not trying to upset anyone at that level. The challenge is to determine who is legitimate."
The distributor will continue to review low spenders every six months.
Campbell said Ingram's Tech Pacific heritage had been built on small businesses but accused the distributor of concentrating on larger resellers since the merger.
Competing distributors of all sizes have expressed an interest in the trade.
Managing director at Adelaide-based Saratoga, Ivar Stanelis, said smaller resellers were its bread and butter.
"I'm happy to sell to a reseller spending less than $1000 per month," he said. "I'd be very pleased if all of my resellers spent that much every time."