The real agenda behind the vendor-distributor rush

Things happen in the Middle East IT channel that don’t always seem to make sense.

3523 days ago

let us take a neutral approch and analyse the the situation:- If vendor is appointing new distributors to map required credit frame in the market,it is a fair decision. Resellers are able to get necessary credit support to run their business and credit as a reason for slow business and aggrevating crisis is taken care. Remember, these days all distributors are offering credits through insurance companies and the limit offered by these ins co's are not as per the market potential or demand. In this case distributor play a very big role by offering so called "internal credits" to the market. More the no. of distributors more the chances of getting credit by resellers. Now about the TAM, total addressable market. Who knows the total market size in terms of brands? It is a PUSH to channel and FLUSH from channel activity which keeps all brands alive. Whoever is smart to achieve maximum PUSH and faster in FLUSH will take max market share. Yes for this game more distis are needed, sub distirbution is created, distributors are awarded premium brands, resellers are kept alive by allowing them to do the regular cycle of invenotry turns and cash gains.

3523 days ago
Arun Chawla

I would simply say - Perfect article written. Well done

3544 days ago

I totally agree with you Andrew. The whole game of getting a new Distributor or a Distributor getting a new vendor is putting more pressure on the Market, in turn creating a price war, where the losers are always the Distributor and Reseller. Vendor, today are pushing distributors to their extreme to achieve their own committed numbers, going down to offering incentive to Resellers, price discount after purchase to distributors, daily spiff at distributors office etc... its high time they realize the market situation and both (vendor, distributor) make sure they help the reseller to move out the stock rather pushing more stock to full their warehouses. Vendors need to realize that distributor work on minimum margins which is now even lower due to the economic crisis, getting more distributor will create more fall then gain.


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