Consumable resellers gasping for survival

Karma Negi

NEW DELHI: There is a certain visible consternation in the market the way consumable sector is moving. The resellers are facing difficulties from a number of factors. According to Puneet Singhal, President, Computer Media Dealers Association, "We have to sell the products at prices well below the prices of the principal companies. And, this is all because of over distribution by the principal companies in the market." He further added, "There is also the problem posed by the grey market, which eats up into our profits. But, the market size that this segment occupies differs from vendor to vendor."

Said Surjeet Singh, Proprietor, STF Paper, "The consumable market is going through a very bad time. Apart from over distribution, there is under-cutting in the market. The principal companies do not specify the discounts on the particular product, as a result of which we suffer at the end. We have petitioned them innumerable times to reveal the discounts at the appropriate time, but to no avail."

He added, "To lure customer from outside, we have to provide them with certain discounts. But, with such policies of vendors, we end up without any margins. Such actions has led to negative margins."

But, the matter that is really pinching the reseller community is that the companies are not really interested in taking any action regarding the grey market. They think that most of the time they just take some cosmetic action. The consumables market is divided into five sections--original, compatible, grey, counterfeit and refilling.

The grave market situation can be gauged when such premier resellers like AK Pandey, Director, Miraj Marketing, talks about leaving the sector altogether. "Miraj will be the first company to leave this sector, if any other option is available," Pandey said.



He too commented on the problem of over distribution, created by the principals themselves. But, regarding the initiatives taken by the principal companies to deal with such situation he differs. "I think the principal companies are doing something in this regard. And, the problem can be solved by them only."

But there is another segment in the market that gives a diametrically opposite view of the situation. Said Sanjay Varmani, CEO, Groovy Communications, "The sector is doing quite well, as the grey market has been done away with. The demand is there in the market but from the channels perspective the margins are not too good."