Channels resolve cartel issue

New Delhi
5 March, 2007

The DQ Week has once again been instrumental in terms of providing critical
information when needed the most. As a reaction to the story “Chandigarh
channel fight cartel formation' carried in the Feb 26-March 4 issue, the
channel community of Chandigarh has been able to solve their issues with the
distribution
community of the region.

“It would have been impossible without The DQ Week's help. Please keep up
the good work,” said the jubilant channel community of Chandigarh.

“Even we had not expected such a huge impact from the recent story
regarding our concerns about the distributor cartel. One of the distributors
called us for negotiations immediately after the release of your latest issue
(which had covered our stance on the 'distributor cartel' on Compaq Presario).
The Chandigarh branch manager of this distributor said that he actually came to
know of our problems only through The DQ Week. In fact, your write-up had
explained the actual problem so well with the desired statistics, that it became
easy for them to understand that our concerns were genuine. They also understood
the fact that ours was not a fight to increase our profits, in fact it was
primarily meant to reduce our losses,” informed Rajesh Kumar, from Chandigarh-based
Beyond Computers.

The channel community of Chandigarh further added that the issue was gaining
national momentum with sub-distributors from Ahmedabad and Goa also showing keen
interest. “Due to a lack of communication, we could not touch base with them.
Meanwhile, fearing a snowball effect, distributors have taken constructive steps
in time,” he added.
 
Formula that worked
Kumar
explains how the formula worked:
1. Stock rot and pile up with Ingram worked
wonders and the distributor suffered a huge loss of marketshare in Chandigarh.
Not only did we not pick
up any product under the cartel from any
distributor, in fact no product was picked up from Ingram at all. So Ingram sat
with almost no billing from us.

2. We did not pick up a single Presario during this period from the
distributors. This in fact helped us as in that phase we sold all the old models
that were stuck with us.

3. We were clear that the fight was not with the parent company (HP in this
case) and we kept buying and selling HP Pavilion range and also the commercial
range of notebooks and PCs. At the same time the stocks of Presario started
ageing with the distributors giving them sleepless nights, more so because newer
models (with Windows Vista) of Presario were launched, whereas they were still
carrying the inventory of older obsolete models. The tide seems to have turned
in our favor as the company is now seeking our help in liquidating those models,
with even heavier discounts than before.
 
“With things turning
in our favor I am wondering that we were just four sub-distributors from
Chandigarh who were actively involved in this fight against distributors and we
could break them. What if the entire channel community in the country had
replicated our formula? If the complete dealer/sub-distributor fraternity fights
them out like this, they will understand  the meaning of 'partners'.
Then they will probably take the partners in loop
before taking such Godly
decisions like 'zero discount',” Kumar opined.