NetComm ISP causes channel disharmony
- 23 April, 2003 11:30
Pricing disparity in NetComm products has caused disquiet amongst resellers since they discovered an online retailer has been selling NetComm routers and modems for less than the products’ wholesale prices. Sydney-based, aussieisp.com, has been selling NetComm product sourced directly from the vendor allowing it to sell to end-users at ISP prices. The products are sold through the company’s retail arm, aussiepcshop.com. Meanwhile, other retailers continue to procure their product through the vendor’s distributors at a higher price. ARN has learned that distributors such as IT Wholesale, are buying NetComm’s NB1200 ADSL modem and NB1300 ADSL router for about the same cost as the recommended retail price that aussieisp.com is advertising on its Web site. But, according to NetComm, the problem lies purely with the distributor and its inability to negotiate a better deal. A NetComm spokesperson said ISP pricing on NetComm’s products was often lower than distributor pricing because ISPs usually made high-volume purchases of one or two products that caused the vendor to drop the price. aussieisp.com’s manager of ISP sales, William Shaw, said that although NetComm’s distributors might not be happy with their methods for gaining the best retail price, they should be trying to negotiate a better price with the vendor. “I can’t understand NetComm’s justification for having such a wide disparity between its ISP and distributor pricing," Shaw said. "NetComm should revisit the pricing they issue to distributors." NetComm said it had taken steps to try and prevent ISPs from on-selling NetComm products to retailers by making informal agreements with ISPs under which they were not permitted to sell unbundled NetComm products to retailers.