Cutting Room: Distribution disputes

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20:20 Mobile, Data Select, Brightstar, RP Europe and Shebang. All very different companies, competing for much of the same shrinking ground.

It is little wonder they have come to blows, or are at least in various tangles with the smallest of the bunch, Shebang.

It appears that Data Select and RP Europe have lost something as a result – £1.5 million annual sales, each, should not be sniffed at in this climate. And that 20:20 Mobile and Brightstar have gained accordingly. If 20:20 Mobile’s new restriction on Shebang’s credit allowance is only an accountancy measure, reflective of recent trading activity, then it might raise its limit again in view of incoming sales.

That will be the measure of the strength of their relationship, perhaps – and, by association, Shebang’s new commitment to Brightstar.

There is an essential issue in this episode about payments for stock.

It would appear Data Select and RP Europe have taken a (rather sudden) dislike to Shebang’s requests for credit. Most trading companies pay upfront, on delivery, and do not require 60 days’ credit. RP Europe makes a point of paying on time, ahead of  time even, and of staying in the black. That is good trader form. Data Select and 20:20 Mobile pay upfront also.

Shebang, which maintains it has never missed a payment and it appears should not be questioned, relies on credit, and an overdraft facility. But it is a smaller privately-financed operation, with a shorter trading reputation and substantial recent growth record. It is not processing the volumes of business its rivals are, and its growth-on-credit has perhaps unnerved some of its former suppliers.

Nor was it set up just to move boxes like those other firms – even if 20:20 Mobile, Data Select and Brightstar want to be more than “shed and truck” traders, and want to be seen to be so in particular, much of their businesses and profits are still reliant on trading. RP Europe, by contrast, shrugs, and accepts such a reality, and competes for profitable business. Fine.

Shebang defines itself by its IT technology, its Sellfone 3G system, which is popular among Orange independents in particular. That is its calling card. One can question its inimitable value, but it is serving a broad market, and some major suppliers (Samsung, lately) and customers (Tesco, Amazon, JAG) are on side. And, of course, Orange, has singled it out, from all its old familiars, as a partner of worth.

Which leaves us where? Well, 20:20 Mobile leads the market for sales still, and appears to be a more open, benevolent partner these days. It says its 2010 record is strong.

Data Select has just recently walked off with a Mobile News Award for best distributor for the third year on the spin, which is a fair measure of its reputation and continued success.

Brightstar is showing signs of life: European expansion, some very major customer contracts, official UK manufacturer supply deals (Nokia UK kit is in its warehouse now, interestingly), a strong management team.

RP Europe is happy, shrewd and outpacing most better-established rivals. Even if in fits of pique they dismiss it as some dodgy trader. Its purchasing team would be welcomed at the doors of all its rivals.

Sitting on the fence? Yes, demonstrably so. Really the battle is between 20:20 Mobile, Data Select and Brightstar. Shebang and RP Europe are essentially nuisances to them, albeit ready, useful and lucrative ones when they struggle to shift kit.

 

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