Staging A Comeback

Adversity is the stuff that shows whether you are what you thought you were'
goes an Italian proverb. When times are bad, it is very easy to buckle under
pressure and simply slip into oblivion.

But there are some who think otherwise. These are people who surmount all
hurdles life throws at them, battle it and then emerge victorious. They wear the
war wounds with gladness because it proves that when push came to shove, they
gave it back as good as they got.

Clichés aside, DQ Channels takes great pride to bring you some of the people
in the channel who were almost brought to brink of shutdown but bounced back and
are today well known names in their business areas. These are just a few of the
indomitable people out there in the channel. We applaud those who are featured
here and those who are not. Hats off to all you people there, who did not take
no for an answer.

Tested by Fire

As a newcomer to the channel business, Rajesh Saboo had a rosy ideas of
growth and prosperity. But an incident occurred that almost led him to down his
shutters.

At the time he started trading, the channel business was primarily fed
through the gray channel and most of the products were imported. Saboo too

would import various hardware from different sources and then sell them all over
the country.

Rajesh Saboo Saboo Computers Kolkata

With just Rs 2 lakh as capital and the rest backed by credit, Saboo bought
some imported hardware worth Rs 5 lakh, which was supposed to be sent to Mumbai.
He had assigned a private courier company to deliver the consignment. Though at
that initial stage this huge investment was a big risk, he was not very worried
as the consignment was insured.

But he was in for a rude shock as the wagon, in which the shipment was,
caught fire while stationed at Bagnan near Kolkata. All the contents were
destroyed. “I had never dreamt that what was supposed to be a well-calculated
risk, would prove to be a disaster and that too due to a fault committed by the
courier company,” Saboo recalled. “In those days except medicines, for all other
products shipped to Mumbai one would have to pay an octroi charge of two
percent. Naturally I had also paid for the same. But the courier company, in
order to save that money and to transfer it into their own account, declared the
consignment as medical goods. This treachery barred us from claiming the
insurance money and my entire business choked and recovery was difficult at that
point.”

Getting his business back on its feet was tough and it took Saboo a lot of
determination and hard work to recover, that too within two years. Luck favored
him as he got support from some of his dealers and partners, who offered him
credit. “They were confident about my intentions and knew that with their help I
would be able to bounce and repay back their money. I owe a lot to those people
who stood by me in my difficult times,” he stated.

The experience taught him that there's no alternative to fair play and clean
business dealings. It was because he did business with honesty and paid all dues
in time that people trusted him, which helped him in the end. Currently Saboo
Computers is Rs 40 crore company with four branches across Kolkata. It is a
distributor for Microtek, Seagate, Creative, LG, D-Link, Intel, Samsung, Sony,
Canon, TVS-E, Frontech, Epson, Asus, APC, Powercom, etc. Over the last two years
it has shifted its focus from pure distribution to create a successful retail
chain.

Restarting From Scratch

Any business is characterized by ups and downs. There have been instances
where partners got wiped off from the scene without a sign of regaining their
lost status. And there have been cases where partners must be praised for their
guts and efforts when they made a re-entry into the trade after losing
everything and giving tough competition to their peers.

RAJIV KHANNA Computer Touch Jalandhar

One such tale can be told about Rajiv Khanna who was a top dealer in
Jalandhar in 1993 and was doing business with Wipro, Shiva and PCS. Later the
dealer started dealing with PCL and became a leading distributor of the brand.

His business was good and he also roped in two partners to expand his avenue.
PCL was a leading brand at that time and was popular among customers for its
extremely low prices. The prices were so low that for six months no other
competitive brand could make its presence felt in the market, which meant good
business for Khanna.

PCL used to take 100 percent advance for each order and would give assurance
of delivering products within a month. Moreover, PCL had exclusive dealers in
each city and hence its distributors were quite small in numbers.

“I can't say whether it was intentional because I have been its dealer for
four years but one fine day PCL shut down and vanished from the market. I filed
a case in consumer court but it did not give me any fruitful results and I was
left with nothing,” Khanna recalled.

One of his partners left and settled in Canada, which further debilitated
Khanna. “Whatever business I had done of Rs 5 to 6 lakh in six months was lost
and I was facing a further loss of approximately Rs 10 lakh,” he said.

There were only two options for Khanna at that time-either he could quit the
business or start all over again. His indomitable spirit rejected the earlier
option and he started assembling PCs with his own brand. Later in 2001, he
started dealing with HP and Computer Touch started gaining ground.

Today, the company is on top and one of the oldest dealers in Jalandhar and
has a turnover of Rs 1.5 crore. Khanna is a leading reseller and service
provider of HP in the city. He has 18 people working for him and his customers
include SOHO, corporate and educational institutes.

Let Down By A Vendor

AK Pandey began his professional career as a Area Sales Manager for Wimco.
But after a year he decided that he was better off doing his own business. He
started Miraj Infotech in 1994 with the distribution of audio-visual products.
This was also the year Sony entered the Indian market as Sony India. Miraj
quickly signed up with the vendor as exclusive distributor and within the first
year of operations, clocked a turnover of Rs 2 crore.

Pandey's best professional phase was from 1994 to 1998 when his company was
almost synonymous with Sony in the local market. By 1998, it was doing business
worth Rs 17 crore annually.

This is when Pandey decided to get into the IT business and partnered with HP
for distributing their imaging products. “From 1999 till 2002, we were busy
doing business for HP day and night. But they took business market leads from us
and established direct contact with customers leaving no business for us,”
Pandey recalled in anger.

This was also the time when Miraj started doing business with other vendors
like Canon, Lexmark and Iomega. In 2002 though the company was showing turnover
of Rs 40 crore for HP and Rs 2 crore for Sony on paper, this was far from the
truth.

“We had actually exhausted all the profit we saved doing business with Sony
in the past. We never realized that we were doing business on loss on a daily
basis. Our bank accounts were almost wiped out,” he said.

At this point of time any other person would have shut shop but Pandey
decided to persevere. “We faced this trouble because of our blind faith in
vendors like HP, who do not think of the partners at any stage.”

Pandey along with nine other distributors took a stand in 2002 to stop
dealing with HP products, till the company addressed their issues. Pandey said,
“Within nine months, HP accepted our terms and conditions. But I had enough of
doing business with HP.”

Miraj then concentrated entirely on Sony, which it felt was more
channel-friendly. “Seeing our laid back attitude during 2000 to 2002, Sony had
appointed a partner for its audio-visual business. But they did not stop us from
distributing its media products,” he mentioned.

Miraj closed its Noida office in 2004 and Jaipur office two years later
because its maintenance was too expansive. Also, the rollout of VAT would have
made it redundant to have several branch offices.

Today, it distributes Sony's media products-both optical and professional. It
also started selling Samsung's media products recently. “In 2002 we were doing
only Rs 2 crore business for Sony while last fiscal we were able to increase
this to Rs 24 crore,” said Pandey.

In 2000, Miraj was an 18 people strong company but today it functions with
just two people. Pandey is now planning to add more products to his kitty, but
only those that don't need showrooms and what he terms as 'hi-fi ambience'.

Vendors Pulled A fast One

Jetage Computers was a leading distributor of Canon and Philips in Chandigarh
till 2004. But later it had to bid adieu to these principals due to
disagreements over business practices. At the end of it all, Jetage was poorer
by Rs 15 to 20 lakh.

Sanjay Walia of Jetage Computers claimed that these events came about because
Canon had unjustified policies compelling its partners to sell below cost price.
Moreover, the vendor had blocked Jetage's backend incentives for almost eight
months and this amounted to Rs 5 lakh.

SANJAY WALIA Jetage Computer Chandigarh

Walia tried his best to recover these funds from Canon. He even requested
eSys India, a Canon distributor, to resolve the issue but he claims that he did
not get any support.

That very year things also started souring between Jetage and Philips. As
part of an incentive package, the vendor was to take Walia to Australia but it
refused to do so. “I then asked them to give me cash against this incentive
scheme, but this too was rejected,” he rued. These two incidents led Walia to
suffer a loss of Rs 15 to 20 lakh and he has not been able to recover it till
date.

However, he decided to move on and over time signed up partnerships with two
more leading brands-Viewsonic and Microsoft. This gave Jetage a safe harbor and
soon he was able to recoup his business. Today the company's turnover is over Rs
5 crore. With 10 people on his payroll, Walia is now trying to get more channel
partners in his fold and tap the retail segment as well.

Coming back stronger

Alok Gupta had prepared himself for most business contingencies. But he had
not made any provisions for terrorist attacks to impede his business. And this
is precisely what happened.

When the Al Qaeda bombed the Twin Towers in New York on September 9, Gupta's
business was also hit. He had made huge capital investments in creating
infrastructure for his software business. But after the 9/11 bombing, the stock
markets were in a tizzy and recession set in.

ALOK GUPTA Samtech Infonet New Delhi

“The recession caused a great setback to my business and I could not get
access to the US market. We had offices in US and Europe and 80 percent of our
business was coming from them. Whatever investment we made suffered huge loss
and we could not regain it,” said Gupta.

With business being hit, Samtech's business registered a big drop and
turnover was reduced to half. Gupta had to shutdown his business in the foreign
markets and concentrate entirely on the Indian market. Over time, he has gained
ground by working on software designed for the Indian government and bagged some
good contracts.

Today, Samtech's turnover is around Rs 12 crore and it has around 200 people
on its rosters. This is no mean comeback for a company, which was as good as
wiped out just five years ago.

Changing Strategies To reach Higher

Computek India started with providing hardware maintenance and support like
installing or configuring computers, printers, file servers, web servers, or
other hardware to its clients.

SHASHANK SHAH Computek India Bangalore

Additionally the company also provided comprehensive networking solutions
that included entry level LAN. During the mid 90's, like many other players in
the arena, Computek too faced problems of shrinking margins and higher overheads
especially since they were not in a level playing field and faced huge problems
from the gray market.

The result was a slow down in business. Recalled Shashank M Shah about the
situation, “We realized the only way to survive was to grow big. Unfortunately
at the time when no bank funding was coming our way, the only route to grow
better was by changing our strategy.”

A strategy change was exactly what Computek undertook. Shah and his brother
Sunil decided that they would increase focus on software products. Their
determination and hard work paid off. “From mere box selling, we have today
become a solutions company with a growing installation base in government,
educational institutions, banks, PSUs, defense, corporate and SOHO segments,”
Shah claimed. Today the company has a team of 22 people and a turnover of about
Rs 10 crore.

VINITA BHATIA

With inputs from Piyali Guha in Kolkata, Amrita Tejasvi in New Delhi and
Subbalakshmi BM in Bangalore