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Dell dives in deep

26 Mar 2010

Simms NZ Managing Director, Paul Johnston, has told The Channel how the deal with Dell came about.

According to Johnston, Dell knew it had done well in the direct sales market but recognised it could do better through distribution. “Out of the people who buy computers online Dell has something like a 70% market share,” he said. “And in New Zealand in particular you might have 70% or 80 % market share but you’ve only got 70% or 80 % market share of 20% of the market, because only 20% of the product is bought directly.”

Dell looked at that, saw it had quite a low market share of the bulk of the market, and knew it could be addressed through though a distribution deal. “They approached Simms, among other distributors; and they did a lot of due diligence in the process of distribution in New Zealand,” said Johnston, who got involved “fairly late” in the process of starting the company up.

“The benefit Dell sees with Simms is that because we’re effectively a start up company in New Zealand with a substantial business behind us in Australia and the UK, we’ve got all the systems, processes, ISO accreditation and that aspect of things,” Johnston continued. “Being a new company Simms NZ was able to model its business around what Dell would require. “We’ve been able to make adjustments to our distribution business that has allowed us to take its products to market in a more bespoke way. We came along and said that we’ll tailor our business to suit the Dell model.”

Johnston had nothing but praise about the relationship with the PC giant. “They’ve been a really great company to deal with. Whenever we’ve encounter problems it’s not been a case of ‘tough luck’ it’s more like ‘how can we get this resolved’,” he added. “The amount of people they’ve put on to help get us up and running has been huge."

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