IT reseller group Computer Australia has initiated an ambitious expansion plan to bring independent resellers into its fold, using a similar model to the successful Leading Edge franchise.
Computer Australia - owned by David Wu and business partner Paul Li - wants to step up its reseller member numbers from 34 stores today to 150 Australia-wide within the next two years.
The company was founded by the men in April 2002 with just eight retail stores. The goal was to become a nationwide provider of IT products and become a publicly listed company over the next few years.
Similar to the Leading Edge member model, Computer Australia charges an upfront fee of $2700 to resellers who are interested in joining the group, Computer Australia's David Wu told CRN.
The fee would give the member access to 2000 copies of the Computer Australia catalogue which the Brisbane-based company prints in-house every month, he said.
After that, members must commit to purchasing a certain number of catalogues for distribution to customers each month, he said. Retail members would also have Computer Australia signage in their stores.
In a difficult IT market, having the buying power of a larger group, partnerships with IT vendors and access to cost effective marketing material were the main benefits of a reseller committing to the model, Wu said.
He said that being part of a larger buying group allows individual resellers to compete more strongly against Dell and large retail chains such as Harvey Norman. "It's a very tough market and Computer Australia will give people another choice," he said.
Wu said the company has established links with distributors and with dealer credit card service Moneytech. Computer Australia also imports its own stock and stores it in distribution centres in Brisbane and Sydney.
The company claimed in its business proposal document that it had "the purchasing power to deliver our members not only the best prices, but often exclusive deals from our suppliers."
"From the group level, Computer Australia head office will take care of product selection, negotiate with various suppliers for the best prices, handle logistics issues and warranty returns," the proposal said.
An internal e-commerce website - which is directly connected to the group's head office - allows each member store to view product information, stock availability, pricing, place orders and view order status 24 hours a day.
The group has relationships with vendors such as Intel, AMD, Microsoft, Lexmark and Benq.