Sun to put grey market in shade

Vendor gets tough on unauthorised imports

Sun's move to stop resellers selling 'unauthorised' imports is similar to Levi's victory last week over supermarket chain Tesco to stop it buying cut-price grey market goods, a Sun executive has said.

But a growing number of Sun partners believe that Sun's channel model is currently "not working" and they want more warmth.

Earlier this year Sun was reported to be getting hot under the collar about rival IBM approaching its channel partners. Last month, the vendor's rays were focused on some of its reseller partners for selling 'unauthorised' kit.

Chris Sarfas, partner sales manager at Sun, confirmed that the vendor had terminated the contracts of some, but not all, of its resellers for using the grey market and alluded to last week's ruling between Levi's and Tesco.

But he did admit that "in some instances" buying from the European grey market is cheaper, albeit illegal, under the terms of Sun's contract.

"There is no point in having a contract if you don't enforce it. We want to see customers purchasing from partners they can trust so that Sun can guarantee the source of the equipment," he said.

"When kit is bought from an unauthorised source we cannot warrant it. We are not prepared to have our brand brought into disrepute or brought down by poor quality," he added.

But one anonymous reseller said Sun has big problems with the grey market and hinted that the vendor is partly responsible for its creation. This is because it has "more of a build-to-target, rather than build-to-order mentality", the VAR said.

Secondhand kit from failed dotcom ventures has also added to grey market Sun stock, according to Clive Longbottom, service director at analyst Quocirca.

"Who needs the grey channel when there is so much secondhand kit left over from the dotcom crash that is virtually unused? Resellers can probably make more margin on that than in selling new kit," Longbottom said.

"It was alright for Sun when it was at the top of a wave during the dotcom boom. But once firms found out that Windows can do most of the same functions and competition was introduced, that arrogance doesn't carry any longer."However, it takes a long time for sales teams and management to get away from that attitude as they are a long way from the coalface," he added.

But Craig Andrews, divisional sales director at Sun reseller WTL, said that it has "a stronger relationship with Sun than it did 18 months ago".

He added that the key to being a successful reseller is adding service around the product to solve the "business headaches of integrating total IT solutions for end-users".

"If a reseller's business model is just based on tin, the only differentiation is on price, and this business has dried up," he added.