Resellers in a whirl over Synnex and Ingram cuts

The recent moves by Ingram Micro and Synnex to cull their low-order resellers have left many in the channel critical. That’s if reseller posts on ICT community forum, Whirlpool, are to be believed.

One post from ‘RichardM’ argued that a culling of dealers by Ingram and Synnex would decrease the diversity of products available to resellers.

“Quite often, a reseller will have a lot of suppliers they buy from… for those times that Ingram just doesn't have what they're after, or is out of stock,” the post said.

“The problem with this is [that] it will reduce the diversification, and force resellers to keep more stock if they want a more steady supply of product, which overall, will increase prices.”

Supporting this view, poster ‘Torytroll,’ questioned the rationale for the planned reseller cullings, arguing that dealers on cash or credit card accounts ordering through websites were not expensive to maintain.

“I'll bet they'll whine if they find their only customers are [Harvey Norman], DSE/Woolies and Officeworks who screw their margins mercilessly, demand co-op advertising and price protection,” the post said.

In a follow-up post, Torytroll claimed the real purpose of the Ingram and Synnex reviews was do lock resellers into purchasing stock from one or two distributors.

“The problem of course is that not all disties carry all brands, some don't stock adequately and some are overpriced,” the post said.

Another poster, ‘iforum’ argued that distributors should be more sympathetic toward smaller resellers as current market conditions were “about as dire as it's ever been in this sector.”

Making another point, Torytroll said cutting smaller resellers from the books illustrated the degree to which distributors misunderstood the market.

“The funny thing is how box movers have been [exhorted] to move to services all the time in the industry, when they do they get dropped by the disties,” the post said.

In a similar vein, ‘Calculus’ argued that the aggressive pricing of distributors like Synnex and Ingram was responsible for the current glut of low-purchase resellers.

“It’s [hilarious] to think they don't want these customers now. It was because of their pricing (the same for everybody, sometimes a little cheaper) that a large amount of wholesalers are now gone (Hallmark, Omega, BCN) and they are stuck with them,” the post said.