July 19, 2019
Clover is being bashed by HPs dealer programme to win back dealers selling reman products. The HP-Xerox tie-up is also impacting on Clover, as well as they are currently a significant supplier to Xerox of HP products and Clover has challenges in their European market as well.
For Clover dealers that have not jumped ship to the HP programme, they rely on their suppliers (Clover) to hold the traditional role to produce the products and sell them in bulk to retailers (or distributors) who provide the infrastructure and services to consumers that wish to purchase these products in the retail market.
According to David Connett, Partner at Connett & Unland GbR “It has been the first rule of distribution that if you sell directly to consumers, it meant losing your wholesale accounts. This traditional model between the wholesale market and the retail market is dead and has been ever since the evolution of online retailing and drop-shipping.
The OEMs successfully sell through their channels and direct via web stores and Amazon, where everyone is now active competitors the retail market. Slowly, remanufacturers have realised that they are doing all the legwork (product development, purchasing, warehousing, shipping, etc.) and are driving prices down, not to make margin, but just to pass on lower prices to retailers who are reaping all of the benefits at a higher margin than the remanufacturer themselves make.
This is the shrinking market syndrome in action where the dealer needs better prices and more support to maintain and win business. The remanufacturer needs more volume and higher prices to keep the production lines turning. For Clover, it makes sense, even if they are five years too late. The challenge for remanufacturers is to partner with your wholesale accounts and have a clear contract that defines the relationship you both want and need, which is not necessarily the relationship you think you have now.
The market will win out, and more and more remanufacturers are turning to online retail websites to expand their customer base and increase sales.”
Categories : World Focus