No free service for e-tailers: Tech Pacific

Tech Pacific has put its stake in the e-ground, stating e-tailers cannot expect free value-added services in a move that affirms the user pays system in the distribution model.

David Cullen, Tech Pacific's managing director, also said if e-tailers want the same price points as traditional resellers or retailers, they must commit to equal product shipment volumes.

"But [an e-tailer's] cost of doing business with us is significantly higher than other resellers. If we are providing additional services and infrastructure, we obviously charge an additional margin on top of that," he explained.

"There are no free services at Tech Pacific. If we have to invest, the retailer will have to invest and you are not necessarily getting a lot of the advantages our major accounts are getting because the volume is not there."Speaking in a climate increasingly critical of e-tail models, Cullen believes only the profitable companies will survive.

"We will deal with all legitimate resellers. Our view is that we will support the retailers as long as they have a legitimate business model and from a long-term perspective we believe that only those legitimate businesses will survive anyway," he said.

As for companies like buy.com, which recently caused a stir in the channel over its anti-Harvey Norman advertising campaign, Tech Pacific is not about to take sides.

"Our view is buy.com needs to determine their market strategy, as Harvey Norman needs to determine their market strategy. And we're not going to interfere and get involved in that. At the end of the day we're in the middle so we have a particular role to play in terms of fulfilment."Read ARN's exclusive interview with David Cullen in the July 14 issue next week.

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