Reseller News

Big fish reel from parallel importers

PARALLEL importing is causing headaches for some vendors who complain of being unable to compete.

Kar Yee Fransham, Lexar general manager South-East Asia, says the New Zealand market is much more difficult to penetrate than Australia.

The USB drive and flash card vendor had high hopes when it signed distribution deals with Brightpoint and TA Macalister last year.

“We’ve had a hard time competing with parallel importers. It’s been slow work but we’re getting there,” she says.

Fransham points out that the Australian camera channel doesn’t buy its cameras direct and resellers are more cautious with their margins.

“The difference is that New Zealand resellers are keen to have a go at getting their margin upfront so buy direct from places like Taiwan. We can’t compete with cheap imports.”

Rick Jansen, Benq country manager, agrees with Fransham. “We haven’t been left with much choice so that’s why I’ve decided not to bring in certain products, like digital cameras, that are too commoditised,” he says.

Jansen says parallel importing is a reality vendors have to learn to live with but warns that resellers buying direct are risking devaluing the products.

“These guys don’t understand the cost of supporting the product in terms of marketing and warranties. It’s the end-user who will suffer because of bad service.”

He says the main problem is with smaller commodity items such as memory cards and digital cameras.

“The only way to work around it is by working with reputable dealers.”

Fransham says the market is still in a state of flurry after a 70% decline in prices last year.

“It’s beginning to stabilise but there’s still an over-demand for flash and UBS.”

Fransham says that demand for technologies such as MP3 players is putting a lot of pressure on suppliers and leading to shortages.