VIP offers lifeline to customers of fallen rival KMS

Distributor agrees to handle returns of ASUS motherboards and graphics cards bought from felled competitor

Distributor VIP is adamant the collapse of KMS Components shouldn't end up costing resellers money after agreeing to handle returns on ASUS stock bought through its fallen rival.

KMS went into administration last week, apparently after its largest customer, Argos, refused to buy any more of its tablets amid a spat over licensing with Google.

Although administrator Deloitte has kept on a skeleton staff to deal with returns, VIP has agreed to handle the RMA [return merchandise authorisation] process on any ASUS motherboards and graphics cards resellers have purchased from KMS.

"We feel for the staff at KMS and I think to a degree they have been let down by the directorship," said VIP director Rich Marsden.

"But business goes on in our industry. Any product bought from KMS which requires RMA will go through our processes, which means resellers can get a quick resolution on the issue."

VIP will offer either a credit or a replacement, depending on the product, meaning the distributor will incur a small amount of costs, Marsden said.

"We are ASUS' largest components distributor, so we can take that pain," he said. "It's right that problem isn't left in reseller world."

ASUS was one of KMS' few prestige contracts and Marsden estimated that over 200 retailers and resellers bought ASUS components from the Cardiff-based distributor.

"If resellers have problems with any other vendors we deal with, we will try to help where we can," he added.

According to a statement from Deloitte last week, 21 of KMS' 55 staff have been retained for a short period and a "small" repairs team has been kept on to handle returns. A representative for the administrator said this team is dealing with 200 calls a day.

"We do have a customer services team and a dedicated number people can contact and will deal with any ongoing customer issues as and when they arise," they said.

Mystery still shrouds why a company as profitable as KMS went under so suddenly as neither the management or administrator has formally commented. However, multiple channel sources tell us the loss of its largest tablet customer, Argos, and a spat with Google over royalties, combined to floor the £50m-turnover firm. Although KMS came from a components supply background, onlookers belived by the time of its demise it generated over two-thirds of its revenues from tablets.