Canon cuts distributor ranks

Former distributors told to start sourcing products through rivals

Canon has rationalised its distribution network following a year-long review. The vendor refused to disclose which companies had been dropped, but ARN understands as many as half of 20 consumer imaging distributors have now been told to source product through rivals via sub-distribution agreements.

Those no longer holding direct agreements with Canon include Also Technology, Galas Technology and Leader Computers.

Canon's refreshed distributors list consists of Dicker Data, Ingram Micro, Express Online, TodayTech, Cellnet, XiT, Alloys International, TopStar Computers, BMS Technology and CompuWholesale.

According to Canon, all have access to the full consumer imaging portfolio including printers and cameras. Its professional imaging products are maintained separately.

"This list was decided following a rigorous process to select the distributors that best fit our strategy," Canon national PR manager, Andrew Giles, said. "Our authorised distributor network will provide Canon with comprehensive national coverage that will enable consistent and efficient service across the country to allow us to focus on providing better marketing support to our resellers."

Galas general manager, Peter Xie, was told by Canon that it was no longer a distributor and had to start sourcing products from its authorised distribution network. He believes the decision was made official by Canon at the start of the month.

"We always had a direct relationship with Canon," he said. "I don't think their current distribution is going to totally fulfil their requirements."

Xie said Galas previously had access to the entire Canon suite.

"I wouldn't say they were significant to our business, but it represented a percentage that we considered to be valuable," he said. "We're still working out with Canon who we should be buying from."

Also Technology, managing director, Ming Ho, said Canon did not contribute much to its bottom line.

"About three years ago, they were probably a big part of the business, but now it's not. It's not a really big problem for us," she said.

Ho said Also will still carry some Canon products such as laser printers, digital scanners and accessories via a sub-distribution arrangement, but will now place a stronger emphasis on its Brother portfolio.

Impact Systems managing director, Peter Agamalis, said he had not been informed by Canon of any changes to its distribution relationship. Impact was sourcing the vendor's printers and consumables.

"I haven't heard or seen anything that says they've removed us as a distributor at this point in time," he said. "As far as I'm aware we're still a direct distributor."

In April, Bluechip Infotech cut ties with Canon. At the time, Bluechip managing director, Johnson Hsiung, attributed the decision to thinning margins across entry-level printing products as well as Canon's aggressive retail push.

Canon's Giles said it decided to streamline its authorised distributor network and added Ingram Micro earlier this year.

"Distributors not selected were offered the opportunity to deal with our authorised distributors when sourcing Canon products," he said. "This new arrangement is settling in and some of these companies already opting to handle Canon products through our new network."