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http://www.arnnet.com.au/article/323655/updated_phoenix_toner_hp_call_it_quits?fp=16&fpid=1
AUSTRALIA : PHOENIX TONER & HP
CALL IT QUITS
Consumables distributor denies it will close up shop
Consumables and printer distributor, Phoenix Toner, has denied
speculation that it will shut up shop after cutting ties with tier-one
vendor, HP.General manager, Don Bentley, confirmed the distributor ended
its relationship with HP but was adamant Phoenix made the decision, not
the vendor.“We have surrendered the relationship – it was a mutual
agreement. We sat in several meetings and discussed this amicably and
came to an agreement,” he said.Ever-diminishing margins, along with
significant mandatory stock holdings, made the relationship an
unprofitable one for Phoenix, Bentley said. While HP was a significant
portion of total revenue, return on investment was low, he claimed.The
pair have been working together since November 2003.
“We were
holding millions of dollar in stock, and our owner didn’t want to play
in that area anymore,” Bentley said. “The business didn’t want to have
that amount of cash tied up in something that wasn’t profitable.”Under
the final agreement, HP has taken back all residual stock at cost price.
The final consumables were being shipped back today, Bentley said.An HP
spokesperson declined to comment on Phoenix’s decision but confirmed
that resellers were advised of the end of the relationship on October
15. The vendor continues to distribute ink, toner and paper through
authorised distributors, Ingram Micro and Synnex, the spokesperson said.Phoenix
is now focusing on remaining vendors including Brother, IBM’s
InfoPrint, Kyocera, Canon, Oki, Konica Minolta and Epson.“We’re not
closing up. As I told the staff here, before we were an HP distributor
we still had all the other relationships with other vendors,” Bentley
added. However, he didn’t rule out a restructure of its operations and
staffing.“We will have to take a look at that moving forward – HP was a
lot of volume, and we moved our warehouse to Asquith [suburb of Sydney]
because of that,” Bentley said. “Without the HP products, we might
consider a restructure. The good thing is we owned the premises.”
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