Secrecy harmful to channel sales

LG Electronics has voiced concern that distributors' secrecy over their dealers is doing the channel more harm than good by killing off potential sales.

Kieron Sumner, UK general manager of LG Electronics' IT division, said that distributors are too often preventing channel fulfilment by neglecting to inform their suppliers about who is selling the product within the channel.

This is believed to hinder sales, particularly when prospective customers approach the vendor directly, but the vendor has no information on the nearest dealer to hand. This is particularly important as customers prefer to deal with smaller dealers than with distributors, he claimed.

'Vendors look stupid when customers phone up and we can't tell them where to buy the products other than from the retailers,' he said. He added that customers wanted the extra service and support available from resellers, which they could not get to the same extent from the retail channel.

'Distributors are generally a suspicious lot. They are secretive about their dealers. They feel we may bypass them and go straight to their resellers.'

One distributor commented in defence of some distributors' suspicious nature. 'I don't know which direction the distribution market is going in. It's possible a vendor will go direct, in which case your customer list is your asset. We're better off protecting ourselves,' he said.

A representative at Fujitsu agreed with the distributor. 'It is perfectly understandable. I suppose distributors have to be protect themselves.

Besides, it stops vendors from stealing resellers away from them,' she remarked.