Resellers pay as Fujitsu makes replacements tough

Resellers pay as Fujitsu makes replacements tough

NEW Zealand channel players seem better informed about Fujitsu’s warranty credit system than their Australian counterparts, but the Fujitsu MPG-series drive problems continue to impact on local firms.

A recent ARN report states that suppliers neglected to inform resellers about a warranty credit system applicable to faulty products, which has led to resellers losing both hundreds of thousands of dollars in revenue and customers. And just recently they found out that Fujitsu, through its distribution partners and warranty claims partner CSSI, has been for some time offering a warranty credit system for the failed drives. But neither the vendor nor its distribution partners informed them of this.

Although suppliers closer to home appear to have communicated that message, resellers say Fujitsu is now making it very hard to have the drives replaced. And while the faulty drive numbers are declining, following years of problems, smaller businesses are still feeling the pinch particularly in light of Fujitsu tightening up the process around replacements. “It has only been in the last four months that Fujitsu have come out and started to renege and make it harder,” says Mike Blair, of Blenheim-based Marlborough Computer Solutions.

Blair credits his suppliers with excellent support but says the vendor should take more responsibility for the issue as it is costing the resellers money.

According to Blair, Renaissance used to immediately forward replacements but it now has to stockpile the drives for shipping on a monthly basis. “We understand that Fujitsu put the kybosh on [forward replacements] and insisted they wanted to test each one before it could be approved for replacement,” Blair says. “The problem with that is the replacement can take up to a month … and that’s not reasonable because to keep a customer happy you have to replace it with another drive.”

Adding to the packaging costs around returning the drives, is the labour and the time required to remedy any faults. For example, Blair says the company sold 62 PCs to local schools and between 20% to 30% of those required repair.

In the end, “we had to change our policy as it was getting out of hand. The costs started to get to the stage where it could have taken us out of business ... Now not only are we covering the labour part but we’re having to fudge with stock and go to the extent of saying that if Fujitsu doesn’t think it’s their fault we may end up paying as well. So we might end up putting a 40 GB drive in a machine and Fujitsu sends us back an old drive.”

Blair says unless the company can find a supply of 10 GB or 20 GB drives, (“possibly refurbished or second hand — not a good idea”), resellers have to replace them with a bigger drive.

“We would invariably replace the drive with one of ours (for speed of service to the customer), which would be a 7200rpm drive, but the replacement would (at least in the earlier periods) be, say a 20GB 5400rpm drive,” he adds.

While Renaissance Brands general manager Mark Dasent agrees there has been a problem with the MPG drives, he says there has been a reduced rate of return as the warranty expires in October. “When they come back the customer gets a choice of a credit or a replacement,” he says. “If we don’t have stock here there is a chance the reseller would have to wait but in most cases they’re opting for a credit. Normally they don’t want a Fujitsu drive back.”

Blair agrees, but adds that “’technically’ you can get either a credit or a replacement drive until Fujitsu test the drive and declare it to be ‘officially’ dead. Renaissance was very good, in that they offered to forward replace drives, provided you agreed that if Fujitsu rejected the dead drive, Renaissance would then recharge you for it.”

Dasent says in April 2003, there were 390 complaints compared to 53 complaints in April 2004, with 98 in March, 168 February, and 82 in January, “which is not a huge amount in comparison with how much we’ve sold and compared to this time last year”.

Dasent says the credit value is based on current market evaluations, which he estimates at between $70 and $80. He adds that resellers have also been offered Western Digital drives as an alternative.

Blair says this is reasonable but his company always opted for the replacement as it does not hold many drives in stock, as prices drop and sizes increase, because a reseller could get caught with excess stock.

“The margins on hard drives are preciously small as it is, and reducing prices only makes it worse,” Blair says.

“My big concern here is that the reseller is already paying for these substandard drives … But these delays now mean we either have to stop-gap the problem (using our stock), be prepared to pay if a drive is rejected, or subject a customer to unreasonable delays.”

Fujitsu did not respond at the time of going to press.

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