Distributors must get more responsible: Trivandrum

Bangalore

September 5th, 2007

Just imagine placing an order on the first of August and not getting the
order delivery sanctioned till the 27th of the month. Add to that only a partial
order has been shipped while the rest of it is yet to come. This is the story of
a channel partner in Trivandrum who is livid that the distributor in question
has not only delayed the shipments but also caused the partner an additional
expense since the shipment has got delayed. If that is not enough, the wrath of
the customer is a bonus that the partner has got. This is a story that is most
common for many partners in Trivandrum. While delayed shipments are the biggest
cause of concern, partners in Trivandrum are also upset with the fact that
distributors are not responsive to their queries when contacted.

Pouring out their woes at the recently held DQ Week IT Panchayat, channel
partners in Trivandrum demanded that distributors as part of the ecosystem need
to get more accountable. Participating in the discussion, Gokul Govind,
Proprietor, Compu-Needs said, "The biggest problem we face with
distributors here is that they are non-responsive to our problems. As it is we
work under such thin margins and issues like delayed product delivery worsens
our situation." Agreeing with him was Biju Abraham Pazhoor of Pazhoor Ideal
systems who said, "When it comes to payments we never get an extension, but
when it comes to product delivery there is a delay. Partial shipments are the
worst thing that can happen to us. We are left in the lurch with no products on
hand and have to face the wrath of our customers for no fault of ours."

If that is not enough, over stocking of products by the sub-distributors
seems to be another point of concern for the partners in Trivandrum. Sub-
distributors get a huge discount and tend to over stock. But when it comes to
releasing the products for delivery they always throw their weight around, said
partners during the discussion.

Unfortunately no distributor representatives were present at the event to
answers the queries on hand.

Another major issue that bothers the partners in Trivandrum was the fact that
dealers from Cochin were cutting into the Trivandrum market. "Increased
competition has resulted in Cochin dealers undercutting the price of their
products. When that happens, partners in Trivandrum are left in the lurch,"
Govind said. "There must be some way to protect the genuine dealers of
Trivandrum and prevent this under pricing and the distributors have to play a
major role in ensuring that kind of discipline, said Shibu of Vettooran
Computers. Agreeing with him was Hari Kumar of Logtech who felt that
distributors have to help in maintaining the discipline in the business of IT.

While partners agreed that distributors also had tough targets to reach and
faced problems of heavy workload and decreasing manpower, they still believe
that distributors need to play a more proactive role in order to sustain the
faith of their channel partners.

These two issues apart, partners in Trivandrum are also worried over the
changes that will be brought due to the tax (VAT) rate in the state. So far the
tax for all computer products has been four percent. But rumors are around that
this would soon increase to 12.5 percent "With no official comment on the
VAT rate as yet, we are absolutely confused. It is time that we are informed of
these changes by either our principals or our distributors. Else there would be
unnecessary chaos," lamented Govind.

With so many issues on hand, the biggest problem for the channel in
Trivandrum is the lack of a strong IT association. With no active association,
distributors do not fear the channel and partners have to battle it alone.
According to Biju, "It is only when all partners stand as a united front
that the distributors will realize that they are up against a group. That will
also ensure that they get more responsible. It is unfortunate that we are split
into groups of large and small players here. It is time to shed our egos and
become one. Only then will we find amicable solutions to our problems."
Agreeing with him was Govind who said, "Unity is strength and unless we
unite, the distributors will not fear us. Besides we cannot expect to get
solutions for all our problems by tackling it individually with our
distributors."

Participating in the discussion, Ruchika, Channel Head-Sales for Realtime
systems that were the sponsor said, "A united association of partners would
certainly make them more audible. As a principal we would agree to that. We are
here to tap and explore the Kerala market and are looking to sign up with
like-minded partners. We are using this platform to announce that hence forth
all our products would carry a three-year warranty instead of one."

Making his presentation and participating in the discussion, Sameer Deo,
Software Marketing Manager, Tutis who also sponsored the event said, "At
Tutis we believe that Kerala is a growing market and we would want to increase
our penetration here. We are using the IT Panchayat as a platform to look for
probable sign-ups with participating partners which would help us grow
better." Partners at the event also got to see some of the products kept on
demo by both the participating vendors.