Sage terminates GL Computing after rebate scuffle

Business management software provider Sage Software has terminated GL Computing as a distributor of its CRM product ACT! by Sage, leaving Ingram Micro, Scholastic and Lectronic on its wholesale list.

Ross Stange, managing director at Sage CRM in Australia said the company, which sells the popular ACT! CRM product, terminated GL as a distributor “due to issues between GL and ourselves.”

“We made a business decision that the relationship wasn’t succeeding the way we wanted it to. It wasn’t an easy decision,” Stange said.

Speaking to CRN, Michael Lazarus, the owner of GL Computing said that for the past eight months, GL was losing money selling the ACT! for Sage software.

“They were overcharging us for eight months. They were charging us more than the reseller price and brought in a promo price. We were losing money hand over fist because of the way Sage was overcharging us,” he said.

Sage introduced promotional or cut prices and distributors would sell the boxed product at a 'normal' price and the difference would be given back to the distributor as a 'rebate,' Lazarus said.

He argued that the distributor was asked to pull out intricate details relating to seven to eight months worth of ACT sales to receive the rebates and it was “impossible to pull out all that info.”

“It cost us money to sell ACT! What the [Sage] staff wanted was ridiculous – things like proving each purchase order from them, where it went, what was the date and time as well as [producing] the reseller and end user purchase order,” he claimed.

GL did eventually receive some rebates a few weeks before being officially terminated by Sage in late July. Lazarus claimed that there are still some rebates yet to be paid.

He also claimed that he was waiting for a rebate from the $9000 GL invested in a recent Sage trade fair.

Lazarus had been selling ACT! since 1987 and still sells ACT! software for the Blackberry PDA/phone and GL's own in-house developed ACT add-on software for merging contact databases. "I have a deep-seated love for the product," he said.

Responding to Lazarus’ complaints, Stange said that in order to receive rebates, distributors were required to submit monthly sell-through reports and provide information about who the resellers and end users were as well as the number of licenses sold.

“Rebates are paid based on claims being made. We didn’t receive a list of claims from him [Lazarus] until July,” Stange said. “Rebates have been credited to his account,” he said.

Stange added that Sage was still trying to recover a “substantial amount of money” from GL.

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