Matrix margins still exist

Not many channel players view dot matrix printers as a money-spinning product line to carry. But demand still exists and that means there is margin to be made.

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By  Stuart Wilson Published  January 22, 2004

Not many channel players view dot matrix printers as a money-spinning product line to carry. One exception to the rule in the distribution space is Gulf Sources.com - sole distributor for WeP printers in the Middle East and Africa. It believes the dot matrix printer market remains a viable profit area for resellers despite the commoditisation of the product. In fact, with so few vendors still focusing on the dot matrix printer space, Gulf Sources.com believes it can no longer be classed as a commodity product. “WeP is the printer brand of Indian IT giant Wipro,” explains D. Dhiman, regional manager at Gulf Sources.com. “Dot matrix printers remain the economical choice for cost-conscious companies printing large volumes.” Offering a viable alternative to Epson - the dominant dot matrix printer brand in the region - Gulf Sources.com has already signed up resellers for WeP in UAE, Kuwait, Iran, Nigerian and Oman and will finalise partner agreements in Iraq and Bahrain soon. “We are limiting the number of resellers we use in order to keep margins healthy,” says Dhiman. Gulf Sources.com posted sales of $39m in 2003. It also distributes UMAX scanners and has just added the top of the range PL-1220 model to its product portfolio. Expect more products to be added very soon. “We are talking to vendors in areas such as digital cameras and flash memory drives,” says Dhiman. “These may well be sold under Gulf Sources.com XCESS brand name. Wipro is also offering us more of its products to distribute in the region.” Dhiman argues that the limited number of vendors supplying dot matrix printers into the Middle East and Africa has prevented them from becoming truly commoditised: “For us, distributing components is a high volume low margin business. In contrast, dot matrix printers are actually low volume high margin.” Displacing Epson’s dominant position in the market will be a stiff challenge for Gulf Sources.com. But with few vendors selling dot matrix printers in the region, leveraging in Wipro’s brand strength should allow WeP to make inroads. Wipro has massive brand recognition in India, and if WeP printers prove to be a success story in the Middle East, more products could soon follow.

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