Cornish IT shop in local supply gripe
Bude Computers claims distributor Target 'sided' with local rival but Target says it was trying to avoid local price war
Distributor Target Components has defended its refusal to supply Cornish electronics retailer Bude Computers with certain products over worries it could spark a local price war.
Target refused to supply Bude Computers – which was founded by a former employee of rival Bude IT shop Martin Group Services (MGS) – with certain products, including Three Dongles, Microsoft keyboards and mice and Linx tablets, which MGS already carried.
Target's managing director Paul Cubbage said the decision was made because of the close proximity of MGS to the Bude Computers shop, and over fears that Bude Computers would start a price war with its fellow retailer.
"Our interest is supporting independent retailers – that is essential to what we are all about. What would be damaging for his [Bude Computers'] business and for the other business would be to have two independent retailers right next to each other, so obsessed with attacking each other on price to the point where all they are doing is driving down the margins to the point where neither of them could survive," he said.
"We are happy to support both businesses but we have an obligation to our manufacturing partners to protect their brand image, so we wouldn't support either side deliberately trying to attack the other purely on price."
But Bude Computers founder Dan Dollin (pictured) claimed Target had "taken the side" of MGS, which he left in 2013 to set up Bude Computers.
Dollin said "By Target imposing these rules on me – which mean I can't buy anything that my competitor can buy – I feel they have taken the side of my competitor, which has held me back and stopped me growing my business as I would have liked. And it has allowed my competitor to have a monopoly on certain brands."
Dollin initially argued to Target that while his shop was a "dedicated computer shop", MGS was predominately a stationery shop, and only 25 per cent of its floor space was dedicated to computer peripherals, and thus asserted there was a gap in the market for his business. He also claimed that customers in the area had said his competitors' prices were too high, forcing them to shop online. He later expressed his frustration at being excluded from lines exclusive to Target and being cut out of certain reseller deals.
Cubbage said Bude Computers' account was never closed, and he made it clear he was happy to start a relationship with the firm. He said he informed the retailer that it could order Coolermaster hardware products from Target, as they were not being sold by MGS, but not products that were going to result in an "immediate price war with MGS".
Cubbage added that Bude Computers had initially signalled its desire to procure Coolermaster products but stopped responding to correspondence on this matter.
Dollin said he decided not to buy Coolermaster products from Target as it would not have made financial sense.
"They said I could buy Coolermaster, but when you can only buy one line of product from a supplier it doesn't make it economically viable to continue buying that. For example, if I need three keyboards from someone, I'm not going to buy three keyboards totalling £60 and then pay £15 carriage. Whereas I could buy from Entatech and tag on three keyboards to my other orders.
"I don't see why I should be the one who has to beg Target to be able to buy from them. It seems like an uphill struggle to get them to take my money," he said.
When approached for a statement, MGS said it had no comment.