*NEWS*XEROX TO AXES MAJORITY OF EU DIST.

[Anonymous]

Xerox to axe majority of its European distributors
Printer
vendor Xerox has unveiled plans to drop 46 of its European distributors
as part of a new distribution model for its Office Group.Xerox Office
Group’s two-tier distribution model consists of 49 country-based
tier-one distributors serving about 8,000 resellers. But this will be
restructured to comprise three regional master distributors: Tech Data,
Ingram Micro and Scribona.Under a scheme known as the Smarter
Distribution network, Tech Data and Ingram Micro will cover the bulk of
western Europe, while Scribona will provide distribution in
Scandanavia.In the UK, Xerox will retain Micro Peripherals as a
hardware distributor to work with Ingram Micro and Computer 2000 (part
of Tech Data). The transition from Xerox’s current distributors to a
new model will take place throughout 2006.Richard Gibbs, European
distribution operations director at Xerox Office Group, said: “The new
model will improve overall consistency of products and service levels,
and extend Xerox’s reach in the market. The new model is flexible and
strong enough to enable us to hold onto smaller, local
distributors.”Gibbs added that the new model will benefit UK VARs as
availability of products should improve. “VARs will have more points to
purchase from because of the addition of Ingram, and the new model will
enable us to better manage our distribution,” he said.Clive Longbottom,
service director at analyst firm Quocirca, said the move is more about
cost-cutting than anything else.“There was a time when a colour laser
printer cost between £2,000 and £3,000. Now, if you look at a base
level Hewlett-Packard [colour printer], it is going for between £250
and £300, and a Konica model is about £250.“Xerox used to be able to
offer five margin points, but its distributors are now looking at
making £15 a box if they are lucky. Xerox has realised it has to trim
its whole approach to the market. At the moment it is costing more for
it to sell than it is getting back out of it. It needs a much sharper
channel to cope, to keep inventory out of the channel and to get the
product flow just right.“This move will give Xerox a better focus on
the channel, and it is just a reflection of the market. The
high-margin, high-price printers are just not there anymore.”Kevin
Jones, managing director of Xerox reseller Printware, said: “I think
Xerox has done this more as an internal move to make it easier for it
to handle its distribution.”

[Author]

October 24, 2006 at 4:25 PM