Resellers approach NACIT on HP's unfair trade practices

The recent raids on partners selling fake HP cartridges has brought to fore differences which Registered Supplies Resellers (RSRs) have been having with HP for sometime. About 10 RSRs have accused HP of dumping stocks on dealers in the name of targets, not allowing them to do business freely and diluting their marketshare by appointing more and more Original Cartridge Stores (OCS) as well as RSRs in upcountry regions.

The Computer Media Dealers Association (CMDA) has taken up this matter with the recently formed National Associations of Channels of IT (NACIT) Speaking on the issue, Chetan Shah, Secretary, NACIT, says, ”Right now we are waiting for more documentation from them, and therefore, I cannot conclude anything.”

Partners also complain that vendors use unfair and restrictive practices to stop them from selling compatible cartridges, refilled/manufactured cartridges, toners and spares related to inkjets. Further, they are restricted from selling these products in other regions too. Argues a reseller, "Why are only we targeted when principal companies themselves encourage it abroad? They also have shops where they feature such products." Adds another reseller, "In the last two years, we have approached HP innumerable times complaining about policies, but they always turn a deaf ear.”

Resellers further complain that HP's marketshare is reducing day-by-day due to the flourishing counterfeit market but the company is doing nothing to curb it. However, the recent raid on a shop at Connaught Place selling fake HP cartridges was welcomed by CMDA. "We hope that this is the beginning of the war against the counterfeit market," informs Manoj Khanna , Secretary,
CMDA.

RSRs have now decided not to accept any targets. They are literally pushed into buying what they don't want and then targets are set for them by the vendor. Partners find it difficult work in such a situation. According to Manoj, many resellers prefer to be a micro-dealer than a
RSR.

There have been no positive outcomes of the CMDA-HP meetings. States Manoj, "We have had three meetings with the company, which was sort of a deadlock. But we are optimistic that a solution would be reached, which requires certain flexibility from both the sides." Because of this, wholesalers are at a receiving end as their payments have been halted. "We have told them unless this issue is resolved we can't do anything,“ says a reseller.

Informs a prominent CMDA member, "Most of us have been doing business in negative margins and if we go by this, the company should pay a compensation of Rs 1 crore to each of the sub-distys.” He adds that if HP can't assure margins to its dealers, partners should be allowed to deal in compatibles and refilled cartridges. 

KARMA NEGI

NEW DELHI