Almasa picks up PSG Iraq rights

Almasa has picked up distribution rights for HP’s personal systems group (PSG) products in Iraq. The regional distribution giant has also unveiled plans to launch its own reward programme for resellers with prizes and rebates based on purchasing loyalty.

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By  Stuart Wilson Published  May 22, 2005

Almasa has picked up distribution rights for HP’s personal systems group (PSG) products in Iraq. The regional distribution giant has also unveiled plans to launch its own reward programme for resellers with prizes and rebates based on purchasing loyalty. Amr Atef, general manager of Almasa’s PC and peripherals division explained: “We have secured PSG rights for Iraq. It is an emerging market and this is something that we see real value in. Almasa will distribute HP desktops, laptops and also ProCurve networking products. The volume of product that we see going into Iraq is rising 10% to 15% month by month.” Almasa has been a long-term HP distribution partner for the vendor’s imaging and printing group (IPG) products. With HP fusing its IPG and PSG units together to form a super IPSG unit, the potential for distributors to extend their product portfolio across both arenas is clear. Christoph Schell, still HP channel director for the ISE region, said recently: “If a partner is a strong performer in IPG, it is relatively easy to get PSG. The other way round is a little bit more difficult. If HP appoints new partners or extends an existing partner’s rights, the first thing we ask for is a business plan specific to that market or country. If they want to do more business with HP they need to offer us more security.” Almasa has worked hard to broaden its product portfolio in the PC and peripherals segments and is already looking at the potential of stocking a wider range of retail-focused products. Atef explains the reasons behind the move: “All of the vendors and distributors are seeing the margins and the volume shifting into the consumer space. The products that had been sold in the commercial space are now sold in the consumer space. For these reasons, it is vital that we are involved in retail distribution.” With the margin involved in distribution to resellers still being squeezed mercilessly, the transition to the consumer space is a move that many distributors are actively considering. “Margins are eroding on the reseller side of the business because Dubai is a trading hub. Some people use the buying and selling of IT products simply as a means to transfer cash or equity from here to there so there is no margin. If there is no value there is no margin. So what Almasa is trying to do is increase the levels of convenience for the real resellers by delivering product in-country, providing better stock availability and giving better credit terms. This is how we are fighting back,” added Atef. Almasa wants to get even closer to genuine resellers with the launch of its own loyalty programme offering rebates and prizes to customers displaying purchasing loyalty. “We have been building up the channel breadth and working on a rebate scheme for some time and hope to launch the loyalty programme by the end of this quarter,” said Atef. “No matter what you say about business models, at the end of the day it is people selling to people. Sure, the reseller wants a good price, availability and credit but above all those things he wants a quality relationship and wants to feel that he is being supported.” Closely tied to Almasa’s proposed loyalty programme is its desire to get closer to genuine in-country resellers around the region. Atef hopes that such a move will eventually erode the role of the sub-distributors operating out of Jebel Ali. “70% of the resellers residing in Jebel Ali are sub-distributors,” adds Atef. “What I am trying to do is visit the regions they are selling to and make contact with the resellers they are selling to. If we can sell to them we can escape the margin erosion and price war that is being created by the presence of the middleman.”

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