Hello, children. Are you sitting comfortably? Then I?ll begin. Today?s story is about a PC dealer. Do you know what a PC dealer is? Yes, that?s right, it?s a dealer or trader.
And do you know what he deals or trades in? That?s right everyone, he deals or trades in computers. We are doing well today, aren?t we? So what happens if he sells someone a PC and it doesn?t work? Yes, George, he is a bad dealer, but what happens? Jemima? That?s right, he either fixes it or offers a replacement immediately so that his business doesn?t suffer.
Never let it be said that PC Dealer can?t find its readers? level. As a kiddies? guide, the above should be pretty much an unassailable representation of what resellers do for a living, at least at the lowest common denominator end of the market, right? Right. Only there are complications with this apparently cast-iron definition of what it is exactly that you do for a living.
And those complications are mostly concerned with what happens when your new wonderbox fails to match up to the manufacturer?s claims. Maybe there?s a bug, as we now know there have been with three successive Intel Pentium family releases. Maybe the initial claims by a manufacturer were overblown ? and there has been enough controversy surrounding the 56.6Kbps modem standard to illustrate that one. Maybe, even if a product is unaffected by a bug, it?s hit by a lawsuit; there were mild tremors in the industry a few years back when Apple tried to persuade the legal people that Windows was essentially aping the look and feel of its own operating environment (Microsoft was innocent on that occasion), and even when a developer named Roger Billings tried claiming credit for Novell Netware.
But the extreme cases aside, Intel and Digital are suing each other, even as you read this glorious prose, over the Alpha and Pentium Pro chips, one of which could well prove to be illegal once the dust has settled. All of these instances, whether they are overhyped, subject to litigation or plain duff as in the bug cases, share one thing in common: they all hit the person who has paid for the system in good faith pretty hard, and guess where that customer comes to complain ... that?s right, children, to the PC dealer who sold it to them.
But the above sorts of cases are not usually the ones that make a difference, purely because the players involved are sufficiently large and, to give them the benefit of the doubt, conscientious enough to make sure they get it right as often as possible and to take as much responsibility as they can for a problem before it escalates. The smaller reseller or assembler, none the less, can have serious difficulties with the smaller supplier who is larger than he is.
Martin Prescott is director of Big Red Computers in North London, which turned over #2 million in its second year. He often gets fobbed off with the standard ?there?s no problem, you?re the only one who has complained? runaround.
The contract appears to be the thing. Pat Harvey, managing director of distributor DMST, believes this is the only recourse available to most resellers. ?It?s like someone taking the Sony Playstation, introducing it as the Okikoki 345, the original manufacturer recognising it and taking them to court to prove they didn?t have the right to the technology in the first place. All the distributor can do is rely on their distribution contract.? For this reason it is important to write some sort of clause into a contract, in which the supplier stipulates that it has the right to sell and support the technology they are offering.
This really has to be taken on trust. In an ideal world, the distributor would be mega-stonkingly rich, enough to employ an entire department of lawyers to check through every patent on every product carried. This office could be situated just next to the ?teaching pigs to fly? room, where there would be plenty of space. As it is, there simply aren?t the resources to go around checking everything.
This is why Harvey and a number of others fight a little shy of taking products from startups, which perpetuates the market leadership of selected brands a little artificially. ?Provided the supplier is of a sufficient reputation, it will honour its contracts,? he says.
One interesting question that has yet to be addressed is to what extent the customer actually cares about any litigation or overhyping of a product. Stand in a queue in any Byte or PC World superstore and you?ll see people with 56.6Kbps modems, Pentium or Pentium Pro computers, and they neither know nor care about any of the corporate gunk which surrounds them. Asked whether customers actually turn up at a Tempo store and say, ?look, I?ve heard about this problem and I?m concerned?, chairman Michael Kraftman is pretty unequivocal ? it doesn?t happen. This isn?t entirely dissimilar to the reaction you get from the corporate buyer. Kevin McSpadden, general manager of mail order company Simply Computers, confirms that customers do ask about the Intel bug or the lawsuits that surround the patents, but not all that often.
When they do, it?s a question of how big the problem is. ?We evaluate our goods and if there is a problem we would try to resolve it before selling,? says McSpadden. ?The Intel problem is something we wouldn?t have picked up, but Intel has publicised it well and made it clear how it wants to deal with it.? This is called acting responsibly, and it accounts for a lot of the reasons why people are still happy to buy systems based on the chips.
The real problems, however, arise when people are reluctant to admit there is any difficulty. Prescott says he has experience of suppliers ?wheedling, cheating, lying and doing everything they can to avoid taking responsibility?. Although he is not shy about taking people to court where necessary, Prescott finds that many of the people he comes across discount this course of action as a real threat.
?If the company is big enough, they say, yeah yeah, you?re not going to go through with that ... I hate to seem cynical but that?s when we tell them we?re going to tell PC Dealer, or put something up on our Web page, or find a way of making sure everyone knows about the problems they are causing.?
But not all problems are due to actual bugs. While none of Kraftman?s customers are unduly concerned about Intel bugs, being in the retail market they have this peculiar idea that they ought to be able to take a system home, set it up and start working. This is what we call in the trade the plug-and-play myth, which works with some configurations but not with others.
Here we get into the manufacturers? claims rather than what can actually be stipulated in the contract. Harvey points to the numerous people selling 56.6Kbps modems, apparently in good faith, and the number of people buying them, a figure that contrasts dramatically with the number of purchasers who will have noticed they are marked as receiving only at that speed and lapsing into slower transmission rates when they are sending. ?You have to ask whose fault it is, whether it?s the manufacturer?s or the reseller?s,? he says.
Of course, in the eyes of the consumer, and in the eyes of the law (see box), it is the reseller?s. Kraftman points to a number of incompatibility issues with, dare one say it, Windows 95. There really isn?t a black and white division between what?s buggy and what isn?t. Windows 95 does certain things that you just have to work with, and there are areas where it?s easy to rename something accidentally so the whole thing becomes unusable, but who?s to say whether this is a bug or whether it?s just the way the system is?? The current jargon for these non-bugs is that they are ?issues? with the way systems ?behave?.
The other thing that can happen is that a genuine mistake leads a system to function in ways other than those that might appear desirable, or ?cock-up totally? as we intellectuals call it. Harvey points to the legions of bug fixes that are sold as upgrades as evidence. ?You say, my CD-Rom drive isn?t working with this software, and they say, it?s OK, we have a bug fix.? Kraftman has experience of a manufacturer assembling PCs for rebadging and ending up reinstalling software on disk simply so that the system recognised all the components and made them work.
Of course, the dealer has to understand all of this, which it may well not if it is a non-specialist retailer. A brief horror story: a few years ago a well-known high street chain started selling software and was asked what it would do if the buyer bought something incompatible with their system. ?We?ll replace it if it?s defective,? came the answer. But what if it was just incompatible? ?We?ll replace it if it?s defective.? OK, but what about your usual guarantees about returning goods if they are unwanted ? what if the customer has opened the packaging, for instance? That?s OK, we?ll replace it.? So what about the licence? ?No, you want the homebrew section ...?
Ultimately, there is one truth, and that is that the customer must see none of this or the illusion is shattered. A computer reseller is like a magician: if they can see the 57-odd fix disks up your sleeve you don?t look half as clever as you did. It is essential to set pricing to reflect the fact that unless you have an extremely co-operative supplier, a lot of the fixing is going to be down to you. Prescott says: ?When I set up, I knew nothing about computers and I wanted a company that would take all that worry away, so if there?s an issue we usually end up taking a hit for carriage and support, then taking it up with the manufacturer.? McSpadden is in total agreement. ?We won?t shirk our responsibilities as a supplier. If we have to take goods back then we?ll do it.?
Ideally, every product will work with everything and there will be no need to worry. This isn?t going to happen for a while, but in the meantime there are a few precautions that can help prevent issues surrounding buggy or otherwise defective product. First, go and sell flowerpots instead. The business is a bit seasonal but it?s reliable as long as they?re frost-proof. Second, look to the contract you have with a supplier and accept that unless your supplier is honest, or you?re cash-rich, the patents and legal niceties count more as an agreement of honour than anything you?re likely to be able to enforce.
Third ? and this is the one that goes against the grain ? try to stick to the larger suppliers when buying in product. The ones who have the most to lose if their goods fall over are likely to have the best systems for coping when it happens ? Microsoft is not going to let resellers down over the security problem with Active X any more than Cyrix did when the 686 turned out not to work well enough with Windows 95, or any more than Intel when bugs in the various generations of Pentium have emerged.
It?s an attitude that freezes out the startups, and every company has to start somewhere. But be aware that taking products from an unproven source is going to expose you to a larger risk than if you were to source elsewhere.
Don?t contract us...
Ironically, in cases of consumer disputes over the quality of the product, the consumer has no direct legal redress with the manufacturer except in cases in which they have bought direct. Their contract is with the person who has sold them whatever they have bought. This means the person who sold their item to them has a contract with his or her supplier, and they with theirs.
It is entirely possible, if not indeed probable, then, that a dispute over, for example, a buggy system, will start springing back from the customer to the reseller to the distributor to the manufacturer to the component suppliers, and heaven help the reseller if there is a dispute over whose components are incompatible with whose.
Consumer law is loaded in favour of the consumer, perhaps understandably but sometimes foolishly. To take an example outside the computer industry, Fred is a man whose car had been stolen. Weeks after losing it he saw it being driven around and stopped the driver, Wilf, who had bought it in good faith without knowing it had been stolen. Fred found after some extensive checking that the car was now legally Wilf?s, and unless the thief was caught he had no legal redress. This is how the law covering all industries works ? almost all the rights are resident with the consumer.
Dickens once said ?the Law is a ass?. Granted, it?s fallen into cliche and almost always gets quoted wrongly with ?an? instead of ?a?, but it seems he did have a point.
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