Accountancy software firm Sage has ditched distributors Northamber, Frontline, Merisel and Ingram Micro, claiming they cannot ensure that resellers are able to support its Sterling products.
Sage will push the products, aimed at small and medium-sized firms, direct to dealers to take closer control of its channel. It said its brand name was being damaged by distributors that were too flexible on price.
Loay Lawrence, Northamber director of marketing, said: 'It is sad and the wrong decision but they will live and learn.' Sage is looking to recruit 500 of its 2,000 dealers to become Sage Solutions Centres, which will provide specialist support. A u300,000 branding campaign in the national press will promote the centres.
Tom Maxfield, sales director of Sage, appointed all the distributors himself in the 1980s. He said: 'You can get a reaction against a brand because it is so widely available at all sorts of prices so this is a strategic shift to protect it. Dealers will now have to buy from us and we won't budge on price.
People, such as mail-order dealers, were selling the product but didn't understand how to support it, causing problems with customers.'
But one industry source said: 'Sage is changing its distribution model to keep as much margin as possible for itself.' Forty per cent of Sterling business went through distribution. Sage is expanding telesales and logistics by 12 to 15 people to deal with extra sales. Distributors Centresoft and Gem have been retained to sell Sage's low-cost software Instant Accounting.
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