Should a trade organization try to get into the distribution business? The distribution business is a tricky business. Managing cash flows, interacting with vendors, ensuring that the channel partners get timely and adequate service & sale support, and providing national logistic support, is no easy task.
p____p The last few months have seen stalwarts in the distribution business crumble and fall. The most recent being the 20-year old Datapro Infoworld, which recently announced its exit plan from this business.
p____p Given this track record, one wonders why Chander Hirani, convenor of All-India Computer Traders Association (AICTA), has started direct negotiations with vendors like Seagate and Intel. What AICTA plans to do is directly purchase products from these vendors and make it available to end-users through AICTA members only. Hirani claims that AICTA members will benefit from this move my getting products at a lower price and from the national warranty it plans to provide.
p____p Now while AICTA�s intentions are good, its business logic is a bit fuzzy. If every trade association in the country gets into the business of distribution of products, then who will look after the business of selling?
p____p The main objective of a trade organization is to ensure that its members are able to carry out their business in a smooth and organized manner, with the least amount of bureaucratic or administrative hurdles. If an association loses sight of this objective and gets into the business of making money, it faces the danger of actually impeding the business of its members, instead of promoting it.
p____p In India, the IT distribution business is still evolving these are its formative years. Therefore it�s best if associations limit their activities to solving the problems of its channel partners. That�s why it was formed in the first place.
p____p And leave the business of distribution to the distributors.