Tulip puts down roots in SME channel

Tulip is courting resellers as part of a sales offensive to target small businesses, following the vendor's failure to enter the retail market with the acquired Commodore brand.

The vendor is re-establishing itself after its slip into administration earlier in the year (PC Dealer, 29 April) with a reseller recruitment drive that added 65 resellers to its portfolio of 300 over the past six weeks.

It is also pursuing government contracts and a direct marketing campaign targeting small business users. As part of the drive, a technology alliance is expected in January 1999, with an as yet unnamed partner, to target the education sector.

The retail market is no longer part of Tulip's strategy. Neil Grayston, managing director of Tulip UK, revealed the Commodore brand, originally acquired for a retail offensive, would either be sold off to an interested US party or licensed.

'We lack the experience in retail. The target is small businesses with direct advertising, fulfilling orders through the channel with 20 dealers.

Our newly signed resellers are already providing 15 to 18 per cent of business,' said Grayston.

Mike Cuerden, general manager at Tulip reseller Ibex Systems, added: 'We are aware of the marketing campaigns but they have not particularly affected us. However, Tulip has become more involved with the channel since coming out of administration.'

Grayston said the vendor faces an uphill battle to turn in good results for the year. 'The administration means we have suffered a substantial loss. But we were rebuilding from July. Hopefully we'll break even by the end of the year, but even that is ambitious.'

A senior analyst at CSL commented: 'The problem is that Tulip is a known brand, but without enough of the market to be considered a big player.

Government and education are a good move, but to reach big player status there is a huge chasm to cross. It's a good idea to steer clear of retail - it's a very aggressive sector.'

Tulip's manufacturing facility in Holland was taken over by Ingram Micro after the administration.