Toshiba reworks its channel

Big notebook manufacturer Toshiba Australia is reworking its channel structure, with a plan to inject more channel marketing dollars into partners that invest in pushing its brand.

As a result, Toshiba dropped its "Five Star Direct Dealer" brand in favour of three new brands for tier one resellers and system integrators that buy direct from the vendor.

It has segmented its direct partners--of which there are 30 in Australia and New Zealand--into three categories: Toshiba Authorised Resellers; Education Specialists; and Mobile Plus Resellers.

It will also extend the Mobile Plus designation to tier two resellers that buy through its distributors Tech Pacific, Dicker Data and Ingram Micro. "Why should we treat them [the second tier] like second class citizens?," said Ralph Stadus, general manager at Toshiba Australia's information systems division.

Stadus said the company would identify and invest in partners that are actively pushing its notebooks in the marketplace and putting together "higher margin" bundles.

Toshiba wants its resellers to push Toshiba harder against competing products. Given that some system integrators and resellers had transitioned their business to a more services-led model, some are too blasé about which laptop the customer selects leaving the vendor to carry the "selling effort", Stadus said.

"We're investing in those ones [partners] that are actively selling our product against the competition--where they supply what the customer asks for [without pushing Toshiba], we do the selling effort," he said.

"Where the channel let themselves down is where they haven't sold best-of-breed [products]," he said. Why would a customer deal with channel partners if they're only selling HP product? They may as well buy direct from HP," he said.

In addition, the manufacturer has launched the "Toshiba Growth Fund" which is open to any reseller with a good sales idea, rather than purely based on Toshiba sales revenue, Stadus said. There's in excess of $2 million per annum in the kitty of which around $1.2 million would be allocated to channel-related activities, according to Stadus.

The company would partly or fully fund useful marketing activities--such as seminars--devised by any of its resellers.

Meanwhile, Stadus said the company is spending around $3 million per quarter on channel marketing. Soft rebate dollars back to the channel are the company's single biggest expense, he claimed.

Stadus also took time to reiterate that the company was 100 percent channel driven and unlike its competitors had made "a formal decision not to do any direct business whatsoever".

He said the company has around six accounts which require the vendor to bid directly and that number was increasing. However, with these contracts the company would sub-contract through the channel anyway.

Toshiba is moving on average between 10,000 and 12,000 notebooks per month in Australia and New Zealand, at has a revenue run rate of $400 million. Sales through direct partners are contributing to 30 percent of this number, distribution (40 percent), education (10 percent) and the remaining 20 percent is derived from sales through retailers.