Dynamic grey-marketing not fair: rival

A rival printer consumables distributor has hit out at Dynamic Supplies' pro-grey-marketing stance, alleging that its cheap parallel imports have spoiled the market for smaller companies.

Queensland-based consumables distributor Dynamic Supplies has questioned research released by market analyst IDC this month that claimed grey-marketing had negatively affected the consumables market in Australia.

Kerry McKevitt, financial controller at Dynamic Supplies, told CRN that grey-marketing added to overall growth.

However, Isabel Fryer, MD at Sydney's Toner Warehouse, said that aggressive parallel importing like that practised recently by Dynamic Supplies was not good for the market.

'It drives prices down,' she said. 'Dynamic Supplies is going too far with it. That's my opinion.'

Fryer said that distributor was aggressively competing with large vendors such as HP by keeping its own prices as low as possible. One way to do that was by parallel importing - a practice Fryer also freely admits to - but done to excess it made it impossible for small players to survive.

'What they have done with HP, they shouldn't have cut their prices as much, because they have brought down a lot of other people with them,' she said. 'With our customers, we have to write down stock every month.'

Fryer implied that parallel importing may be doing more harm than good.

Since Dynamic Supplies had started 'doing all this stuff', Toner Warehouse's sales figures had 'definitely dropped off' as had those of other firms she knew practising parallel importing, she said.

'It's not a real secure business. Our customers are not loyal to anyone, they just go for the best price,' she added.

Fryer said she would assume that Dynamic Supplies itself was losing a lot of money, coupling its parallel importing strategy with the legal costs of its ongoing Supreme Court battle with HP.

She said that buying through official channels worked well for many companies but with so much pressure on pricing, many companies felt they needed to grey-market as well to survive.

'We're not a massive parallel importer and we are direct for a few companies, and if you can get good direct it's great, but you get hit by other people. There's so many people out there doing it,' Fryer said.

Further, major vendors such as HP had the market effectively 'all sewn up', she added, but distributors at large were 'definitely' against parallel importing.

'It is a vendetta, and it has an effect on other companies as well. [Dynamic Supplies] shouldn't take things so personally. They should get on with business,' Fryer said. 'With HP, they've opened a can of worms there.'

Dynamic Supplies' McKevitt said there was 'no personal vendetta' against HP.

'We have great respect for a company that obtains market dominance. We are not carrying on anything, we are only responding to market conditions and what we see as threats to the smooth, unimpeded operation of our channel,' he said.

Further, Dynamic Supplies' pricing was not aggressive, but 'pricing to its costs and providing competitiveness to its customers', McKevitt said.

He said the distributor's battle was not really about HP per se but about issues affecting the channel and customers in a broader sense.

'To narrow our concerns and describe it as an HP issue is kind of missing our message,' McKevitt said.