Dealings with distributors

We have just celebrated 25 years in continuous computer business and are now in the first year of the next 25 years.

I started the business in 1981 with an Apple II and it was a time when there was no software around, and the only way to deliver a business solution was to write the software to go with the computer.

By the mid 1980s we moved towards compatible clones. Hardware was becoming cheaper and more universal. Repairs and maintenance became attractive and service on the same day was most acceptable to customers.

I can remember the release of VisiCalc, the first spreadsheet, and how powerful it was. The reply came from Microsoft, who developed Multiplan for CPM and then Multiplan for DOS, and then onto Excel.

To this day we use Excel to monitor stock, accounts, wages and our general accounts, and no customised software has ever been used to manage our business.

Please allow me to reflect on some of the poor experiences that we should not have in the computer industry.

We have in excess of 50 different distributors from whom we draw supplies, resulting in about 250 to 300 orders during a 12-month period. Most orders are cash accounts but we do have some 30-day account suppliers.

Approximately one in three orders is not despatched immediately upon transfer of cash. This failure rate rises to two in three during the ‘silly season’ – which runs for at least two months from the last week in November until the Chinese New Year in February.

This is the period when we must stock carefully to carry us over the period. Given that the real holiday period is about a fortnight following Christmas, I see serious flaws in distributors stocking procedures.

It is rare, possibly about two or three times a year (about 1 percent), that a supplier does not receive an order that we have placed. Once we are notified of the invoice by return fax, we remit the money, return a fax confirmation, and await delivery next day. Mostly, we can expect delivery next day if we notify our remittance by 3pm.

Now, for about one in three (33 percent) of our cash-up-front orders, we may need to wait till ‘kingdom come’ before we receive our order.

So, we are now getting in the habit of phoning up to see whether our order has been despatched after the first day. A very typical response, even three or four days later is, “The order is going out this afternoon”.

Looking at distributors and invoice numbers, one can estimate that most are writing in excess of 100 invoices a day; you would think that they would be glad to get acquired stock moving out of the warehouse as quickly as possible.

They have the choice of their own courier, and based on the apparent volume, that courier must appear daily for pickups.

The distributor’s obligation to us really begins when we have made our remittance, not when we initially ordered inventory.

Our principle has always been look after the cash cow first and they keep your business turning over. A million dollars on outstanding credit cannot purchase a pin.

I now take up a second point: many of the people working in the industry enter the industry thinking that they are in for a quick buck, and when it comes down to the nitty gritty, they take the consumer for a ride [so] the customer puts his future trust in the mass marketers.

One of the easiest hardware faults is ‘puffy capacitors’. Dodgy resellers will spend hours on ‘fixing’ a computer, and charge ‘an arm and a leg’. By the end of this stage, the customer has had it, decides on a totally fresh start, and unfortunately towards the mass marketeer.

Not all experiences have been bad. While I might have gripes against some of our suppliers, I have generally found they have followed up on warranty matters fairly quickly.

STAYING OPEN FOR ANOTHER 25 YEARS
We set our own goals and policies and are not moved by the Hardly Normals, the Bad Guys or Gyrovision.

Darren Brislane and Matthew Williamson (both trained here) are my technical operations people. They have told me that they have plans to celebrate 50 years of Timbertown Computers. They tell me that it will have to be done – even if they have to get ready the heart tablets, the colostomy bag and the wheelchair, and decorate the place with forget-me-nots