Narrow margins limit parallel importing

Razor-thin retail margins have limited the impact of parallel importing in the IT market to date, resellers say. None of the resellers Computerworld contacted has noticed any effect from the law changes, introduced in May, which removed restrictions on the importing of licensed goods.

Razor-thin retail margins have limited the impact of parallel importing in the IT market to date, resellers say.

None of the resellers Computerworld contacted has noticed any effect from the law changes, introduced in May, which removed restrictions on the importing of licensed goods.

Tech Pacific marketing manager Scott Cowen says margins are so tight in the New Zealand IT market that any firm parallel importing products would find itself making little money.

"We could go back to a manufacturer and tell them this was happening and they could throw money at the problem for a couple of months, [but] the importer would end up sitting on stock they couldn't move."

Hewlett-Packard consumer product marketing manager Justin Tye agrees.

"The laws target industries that had a monopoly on imported products and had high margins. Our industry was probably like that 15 years ago, but margins are microscopic now."

According to Tye, any saving an importer could make would quickly be eaten up by factors such as freight and advertising. As far as support for a product goes, Tye says that rests firstly with the final-tier reseller.

"Under the Consumers Guarantee Act, it's the person who sold you the product that's responsible for any problems. If that person shirks their responsibilities, they're not fulfilling their obligations to the customer."

HP, like many IT vendors, has a worldwide guarantee, and Tye says HP would support the abandoned buyer of a product that had been parallel-imported but make certain that the customer knew they'd been left in the lurch by the importer.

Cowen believes parallel importing is taking place on a small scale, but that customers aren't seeing the bene-fit. "Some resellers are bringing in products but they're selling it at the same price, so they're not making too many waves." This way, resellers are making a larger margin without upsetting local distributors.

Retailers were also, for the main part, unaffected by the changes.

"Parallel importing is an issue for us, but I'm not aware of any computer products that have come through this way," says Pacific Retail chief executive Nick Lowe. Pacific Retail owns both the Noel Leeming and Computer City chain of stores.

"Customers would be, I think, very wary of a product that didn't have the normal service and backup they would expect." Software, might be a different matter, says Lowe, because it is simpler to ship.

Microsoft is also concerned about the change in parallel importing laws but for another reason.

"The only ones benefiting from the new regime are the organised crime rings counterfeiting software," says marketing manager Steve Jenkins. Previously, he says, it was easy to spot who was selling pirated software.

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