confedchannel bonding ita
“Vendor-dealer relations are strained due to cross-territory supplies at lower prices” Confederation of IT Associations (Confed-ITA) is the umbrella body for all IT associations in Tamil Nadu and Pondicherry. PN PRASAD, President, Confed-ITA, shares with Charu Khera his thoughts on how vendor-partner relations can be improved. Can you share with us some details about your upcoming events?
Please give us a brief background about Confed-ITA. Currently how many associations are members? How do you plan to increase the reach of ConfedITA beyond the Southern region? Confed-ITA was formed as an apex body of associations of computer dealers across Tamil Nadu and Pondicherry. During the formation, various formats were debated and also the reasons for failure of previous such attempts. To move forward, it was formulated to include all associations with equal representation, irrespective of their size. This arrangement has the advantage of not interfering in the affairs of member associations and they have their own agenda and programmes. Initially, seven associations were our founding members. Now our membership has reached 20 associations.
Though currently we have a strong presence in South, Confed-ITA has been structured to include associations across India and we have been communicating with all associations throughout India by building an e-mail group with members across India. We have urged associations across India to come together and form a state unit of Confed-ITA and once we have several state units across India, then they can join to establish an all-India body. Though there can be apprehension among these associations regarding losing their identity and about who should lead the state units, the leadership can be rotated among member associations as we do in TN and Pondicherry. Our third team in three years has been selected to take over from April 2010, which proves the method is working well.
DIGIT CHANNEL CONNECT
26
NOVEMBER 2009
We would be organizing our annual summit in the second week of February, 2010. It will be a two-day event where dealers from all our member associations will meet and showcase their products and offerings. Around 1,000 members are expected to attend it. Our organizing team has zeroed in on a few locations, but nothing has been finalized as of now.
What are some other key concerns of the channel community in South currently? What steps have you taken to help partners address these issues? Apart from piracy, low margins and direct sales by vendors, there are issues like unethical business practices as well as pricing management adopted by most vendors and disties. Our members have debated in detail about the problems and have issued Common Minimum Trade Terms (CMTT), necessitated due to bad distribution policies followed in trade. Apart from these, we are working with vendors to find a solution to various taxation-related problems.
Can you give us more details on CMTT? For any vendor to progress and increase their market share, it is important to work with partners on a long-term basis. At present, the relationships (between vendors and partners) are ad hoc; there are no legal agreements for their partnerships. Vendors as well as dealers have strained relationships due to cross-territory supplies at lower prices. CMTT will help partners address all these issues.
Furthermore, there are situations where an authorised dealer (of a vendor) loses money due to competition from products of the same
company (which were dumped elsewhere by the vendor due to month-end deep discounts). The prices (of these products) have no sanctity when end-customers are offered up to 50 percent discounts on listed price (MRP) and these products invariably flow into the distribution channel to disturb projected operations. Here, it is the vendor due to whom the partners suffer. CMTT lists remedies for all such issues and more. For example, service tax and VAT on back-ends; VAT on cartridges, service tax on software; warranty issues; territorial violations; and price differentials. Vendors who implement CMTT will be labeled as ‘preferred vendors’ and Confed-ITA would encourage members to increase trade with them.
Confed-ITA had initiated a drive called Stand On Our Legs (SOUL), but there have been member complaints about its slow progress. Your comments? All our members have approved of the SOUL project unanimously; but like any project, there are many implementation issues to be sorted out. SOUL is aimed to generate funds for the welfare of dealers, as (according to the terms of the project) the vendor will increase the MOP (market operating price) by 0.001 percent and then would credit the amount directly to ConfedITA’s SOUL account within 30 days. This money would then be used for the welfare of Confed members.
All our member associations have given their approval for its implementation at vendor level. Apart from a few vendors (who have come forward to help us implement SOUL), we are yet to hear from many vendors in adopting SOUL for their products. SOUL should get going in the next few months with the cooperation of all vendors/disties. n charu.khera@9dot9.in