Three-year old Barium Technologies departs local market leaving behind large amounts of debts
Barium Technologies, a regional IT reseller and trading company has fled the market last month leaving behind debts to the tune of around $10 million, according to industry sources. The three-year old company dealt with products from top-tier brands.
The regional IT channel market has witnessed a number of companies exiting the market over the last year but nothing quite as big as the impact of Barium’s exit, say industry sources. The channel market continues to grapple with issues of over credit, low margin and competitive prices.
Shailendra Rughwani, CEO, DCG, said, “The market has been slow over the last couple of months, which is all the more reasons for resellers to be very cautious in their dealings.
“Resellers should not sell below cost or oversell. Whatever the circumstances are, traders should refrain from falling under pressure and purchase products that are not required or do not have the bandwidth for. Because then when he has to make the payment, he will be compelled to sell below cost price. This might lead to immediate profits but creates a vicious circle in the long run.”
KU Shankri, Founder and CEO, Lucky Star Computers, said, “I believe vendors and distributors should work on controlling the demand and supply. The genuine business orders are getting affected by such incidents. The responsibility lies with both parties, one who is giving the money and the other who is receiving it.”
Rughwani further added, “The memory of the market is short-term. We have seen this happening over and over again in the last 15 to 20 years. The problem is that it is fairly easy to get credit in this market.”
An insurance firm does not give credit to a company that doesn’t have three years of operation in the market, and even then a thorough background checking is done.
“Therefore, how can the market extend open credit to newly-formed companies? We suggest a preliminary check is done to see if the company is a DCG member before extending credit. This helps as we do a background check on all members before they join. Before joining DCG, the first step is to give us a reference from one of our existing members, we then take down the complete details of the firm. This does not assure that the company won’t flee the market, however, at least in this manner, the basic vetting has been done.”
He added, “I hope with increased market awareness, players will rethink the way business is done. We are expecting the market to improve, second quarter on wards.”