The US channel strategy for supplies changed on 1 November, with big changes for distributors, resellers and customers.
The change in strategy is an attempt for the OEM to create more interconnected partnerships with channel partners, with product classifications changed for inkjet and toner cartridges as well as wide-format inkjet cartridges. The main issue with the programme is that an authorised partner would invalidate its agreement with HP if it decides to resell HP products to a non-authorised reseller instead of the end-user – a big issue in terms of cartridge supply.
OPI interviewed HP’s Steve Sakumoto, Vice President and General Manager of US Supplies Sales Organisation, Printing and Personal Systems, about the changes, with Sakumoto stating that the changes mean its distribution system is switching from “open” to “authorised”, adding that “we’re basically asking all of our reseller partners just to register with HP so we can know who they are”.
Major distributors of HP products in the USA, therefore, now need to be authorised by the OEM, with potential issues stemming from the authorisation of said distributors in terms of who they can and can’t sell to under the terms of the authorisation. Distributors are required to apply for authorisation online with “pretty standard business information” according to Sakumoto, who notes that the OEM is doing this “not to interfere with the supply chain, but to provide a direct touch to the resellers”.
Citing Starbucks, Apple and McDonalds as examples, Sakumoto told OPI that “there is a certain branded experience that you have come to appreciate [and] expect”, and so HP intends for this to happen with its distributed products in terms of product range, support and customer confidence. OPI’s querying of whether many would not sign up was responded to by Sakumoto with the belief that HP “anticipate[s] a large portion of them will sign up […] and we also anticipate a portion [will] choose not to”.
Pressed on whether the OEM is “limiting or reducing choice”, Sakumoto stated his opinion that “any customer has a multitude of choices”, and that the move is not a response to clones and counterfeits, with HP having “different avenues for addressing” those issues. He also responded to the question of invalidating authorisation by reselling to non-authorised companies by noting that “we will not allow subsequent resale to other resellers”, with the agreement requiring resellers to “buy only from HP-authorised distributors and then sell direct to the end-user”.
Sakumoto noted that “there’s some degree of uncertainty” amongst HP distributors and channel partners, but that the OEM is “working directly with each” of them to “understand their concerns”. He added that “other regions are looking into” taking up the programme in future, though the programme is US-only at this point.