There's No Support From Vendors, Distis: Madurai Channel

Marching ahead with the focus of highlighting the issues of the channel
partners in the region and enabling smooth business, the IT Panchayat reached
Madurai. The event was organized in association with The DQ Week and DQ
Channels. Even the rain couldn't stop partners from attending the event, where
almost every member of the Computer And Media Society (CAMS), Madurai was
present.

In the panel, G Ravikumar, President, CAMS; K Senthil Nathan, CEO, Premier
Systems & Peripherals and M Selvaraj, CEO, PCWorld represented the channels,
while from the distributor's side, R Ramesh Kumar, Madurai Branch Manager,
Ingram Micro; V Ramesh, Madurai Branch Manager, Rashi Peripherals and Sabhari
Kumar, Area Sales Manager, Redington India were present. The discussion was
moderated by Zia Askari, Associate Editor, CyberMedia. Partners accused that the
distributors were dumping the stocks, ignoring the amount of business that the
channels were doing.

"The targets are set by the distributors for the sake of their own backends
without any concern about our business of channels, and dump their stocks on
short notice," Senthil Nathan said pointing a fingers towards the vendors.
Reacting to this, Kumar of Redington said that such things should be discussed
in the presence of vendors and not the distributors, as they are just mediators.

Anil Gupta, Head-National Sales, MicroWorld making a presentation

Cartel

Selvaraj of PCWorld opined that distributors stock the products on a linearity
basis, and at the end of the day, huge amount of stocks would pile up with
partners. "There would be a sudden price drop while the dealers still have a
huge stock on their premises. If the cartels are unavoidable, then place the
cartels on a larger basis and support the dealers for a months time," he
appealed to the distributors.

Nathan wanted to know whether the formation of cartels is the role of
distributors or vendors. "Say yes or no. Are you not responsible for the
formation of cartels," he aggressively questioned. But the distributors remained
passive and denied to comment anything about cartels. "There is nothing like
cartel. We just operate on the support that we get from the vendors. If we are
supported by the vendor, we pass on that support to the channels," Ramesh Kumar
of Ingram claimed.

Service & DoA issues

The channel representatives in the panel raised the service issue with
Ingram. They asserted that Ingram doesn't have a proper service support in
Madurai. Partners also claimed that there has been no support for DoA cases from
the distributor's end.

In his response, Kumar of Ingram said that the distributor is in the process
of appointing service people in Madurai with in a short time. On the DoA cases,
he said, "Most of the DoA cases could be addressed by the channels themselves,
if they are aware of the DoA policies of the vendor. They can use a check list
and verify whether they themselves can solve the issues or not."

Product knowledge

Senthil Nathan claimed, "These distributors never come to us for products that
are hard to sell and keep pushing only easy selling products. Whenever we ask
for the prices of certain products and demand for stocks, they don't react at
all," he argued.

DThe panel: (L-R) V Ramesh, Madurai Branch Manager, Rashi Peripherals; G Ravikumar, President, CAMS, Madurai; K Senthil Nathan, CEO, Premier Systems & Peripherals; M Selvaraj, CEO, PCWorld; R Ramesh Kumar, Madurai Branch Manager, Ingram Micro; Sabhari Kumar, Area Sales Manager, Redington India

Reacting to his calls, there were few questions from the channels' end about
receiving claims in the marcom support from the vendors and the price
fluctuations.

A partner questioned the distributors about the increase in the hardware
products prices, which have been manufactured well before the hike in the dollar
rate. He also questioned them whether they are utilizing this product hike as a
way to increase their margins. The distributors chose to remain silent on the
issues discussed.

MRP issues

The other important issue affecting the channels was the difference in MRP
prices with that of distributors. The distributors from their end countered that
it is a major challenge for them also due to serious errors in their logistics
division.

The channels argued that in such cases, they can't fall prey and would return
those products that have price issues.

Ramesh Kumar of Ingram said that the distributor is ready to help out if the
channels have such issues.

Distributor as a welfare partner

When questioned about including distributors in the Madurai association,
CAMS reacted positively. Ravikumar said that the association welcomes the
distributor to play the role of a welfare partner though not as an active
partner.

Sify, Microworld, Hitachi, Epson and Geneva partnered for the event, which
was attended by 70 partners.

NR Sethuraman

sethuramannr@cybermedia.co.in