HP warns resellers to steer clear of grey market goods

Vendor advises channel partners to buy products through authorised distribution as a business model based on sourcing equipment from the grey market is unsustainable

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By  Published  October 31, 2006

The boss of HP Middle East’s imaging and printing business has warned resellers who buy product from the grey market that they risk jeopardising the long-term future of their business.

Amr Hassan, general manager at HP IPG, has also said that resellers who knowingly source parallel imports risk exclusion from HP’s loyalty programmes.

High levels of grey product flowing into the region remain a major headache for vendors such as HP, which have a duty to protect the interests of their authorised channel partners.

Hassan appealed to resellers that dabble in the grey market to consider the implications it has for the long-term health of their business model.

“This region is constantly moving towards a new level of maturity and won’t remain an emerging market forever.

Three years ago, if you looked at Khalid Bin Waleed Street in Dubai there were lots of small, independent shops.

But we have seen some of the companies getting larger by buying space from their neighbours.

As the market is getting more mature, price is no longer the only differentiating factor.”

Hassan added.

“The market dictates that a long term vision is needed in terms of the support and service that is given to the customer.

Resellers need to think about three to five years from now.”

Hassan claims HP is doing all it can to eradicate grey market trading by ensuring tighter regional price alignment on global products, and using its serial tracking number system to trace perpetrators.

HP’s EMEA channels chief Jos Brenkel recently revealed a number of HP partners had been dumped from the its Preferred Partner initiative for their involvement in the grey market, and Hassan insists the same punishment will be extended to offenders in the Middle East.

“We are evolving our loyalty programmes and educating resellers not to deal with grey markets and counterfeit products,” he added.

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