Grey marketing gamble

Toshiba's Ralph Stadus, who has recently been embroiled in a parallel importing dispute with Melbourne reseller Computer World, says the notebook supplier does not have a problem with the reseller channel parallel importing products.

What he does have a problem with are resellers selling parallel imported products to the consumer and misrepresenting what they are selling. 'We've got the reseller [Computer World] explaining to the customer that the product is covered by an international warranty when the written warranty that comes with the product clearly does not support the customer in this country.'

Stadus claims that through this misrepresentation, the reseller is 'actually breaching the Trade Practices Act'.

'Our problem is that we've got a channel out there that is in breach of the Trade Practices Act, in breach of the consumer protection laws and at the end of the day when they go out of business, which they will, the consumer will come back to Toshiba for rectification for something we maybe can't fix or don't have the ability to support,' he says.

He says that support on PC level equipment is one of the largest [vendor] subsidiary-based costs. 'The trouble is that it spreads and the consumer becomes uninformed as to whether they are buying a real product or not.'

He continues: 'If you go and buy a parallel imported car from Japan – you want a new Lexus or something – you don't turn around to Lexus Australia and expect to get parts, whereas in the computer industry that level of differentiation is nowhere near as established,' he says.

Stadus says Toshiba is in the process of beefing up advertising on parallel importing issues. 'What we won't have is people importing the product, not looking after their customers and have us picking it up.

'We'd encourage the other vendors to take a leading stance, run advertising and inform the consumers instead of saying lots of nice words and turning a blind eye,' he says.

'Unfortunately there is a small element in the industry which comes and goes, and it goes when the regulators catch up with them. The genuine reseller out there who's looking after their customer is suffering.'

IBM Australia channels manager Phil Cameron, says the company's authorised resellers sign a reseller application and agree to the terms and conditions of the vendor. 'Currently, we're getting a legal position on this as well because it's actually a very hot topic. We have a program where we accredit second-tier partners. You have to make sure that your partners are accredited,' he says.

However, Comaxes' Colin Williamson took Stadus to task on the issue, saying vendors are now starting to supply product from Singapore that is bypassing the [Australian] channel completely.

'I've had situations of that occur recently – aren't they doing the same thing? Vendors are bringing in product, shipping it directly to customers locally and avoiding local sales. Isn't that what we're talking about here?

Williamson asks what vendors are doing to stop consumers buying products directly from overseas over the Web with no warranties.

'These things aren't important when a consumer buys it, they're only important when a reseller buys it?' he says.

Stadus replies: 'No, that's not true. The issue is there for the consumer. A consumer going to the trouble of buying a product overseas has probably got a reasonable expectation that they might be in trouble with warranties.

'A consumer walking down to the other end of George Street [Sydney CBD] and buying a product might reasonably expect that Toshiba Australia is going to service them,' he adds.

All agreed that the industry needs to take charge and start policing these practices. LAN Systems' Nick Verykios says that for PC vendors, parallel importing must be a real concern. 'At the end of the day, your brand equity suffers,' he says.

The Roundtable contingent also agreed that vendors need to make sure their reseller partners are fulfilling the requirements to be authorised to sell a product and authorised dealers are the only ones that get access to these products.

Fiona Dicker, MD at Dicker Data, a Toshiba distributor, says unlike industries such as accounting, the computer industry does not have an 'approval' or certification process for individuals.

'You have a process you had to go through to be approved to be an accountant for instance. There's nothing like that in the computer industry. It's really something that the computer industry needs and it's something that needs to be driven by vendors as well,' Dicker says.