Direct or not direct
The effect of the Internet on traditional reseller channels is starting to bite, as witnessed by IBM's `ship direct' service just started in the US and set to arrive in the UK real soon now.
Dealers have won a reprieve, however, from Compaq, which has shelved plans to introduce an Internet pricing policy until the start of next year. Originally, the PC vendor told its UK resellers that it would implement the policy from this summer.
The scheme, already kicking in over the Atlantic, involves Compaq setting its PC hardware prices for direct sale on the Web. These prices would then become the base reference point for all registered resellers.
The problem with this strategy is that PC pricing on the Internet, by its very nature, has to be very reactive to market changes, and dealers have been worried that, as well as seeing their potential margins shrink, they would also see prices going up and down on a regular basis - hardly the best situation to strike contracts under.
IBM's Buy-Direct scheme extends in the US
Big Blue has extended its Buy-Direct campaign in the US and looks set to do the same in the UK. The campaign, understandably, has reseller worries, as it offers a `buy today, ship today' facility on nine models in the IBM notebook range.
In the US, the scheme is being extended to embrace build-to-order desktop PC's, as well as working directly with at least 14 major customers - pushing dealers out in the cold as far as such sales are concerned.
David Thomas, senior vice president of IBM's personal systems group, says that direct-sell policy will allow the company to shave prices by up to 30 per cent in the US.
Even if IBM UK doesn't implement the facility, the possibility of direct-sell US vendors selling to UK customers starts to open up at these sort of price differentials.
PCindex of customers the cheapest deals
The quickest way to find today's best price and fastest delivery on 1700 PC parts from 15 major UK retailers, is on www.pcindex.co.uk, HomeLabs, the company behind the site, claims.
The PCindex engine checks and updates over 4,000 prices and stock levels daily to give visitors a searchable database of motherboards, CPU's, memory, hard disks, CD & DVD drives, monitors, graphics cards, printers, scanners and other types of hardware.
According to the company, the database includes products from over 70 different manufacturers available from major UK vendors including Dabs Direct, Simply, SMC Direct and jungle.com.
Brief product specifications are provided, alongside links to retailer, manufacturer and product sites for further information. A price button against each product then displays the list of all prices found for the particular product and a virtual shopping-cart is provided for help in finding the best deals over a number of different products.
The site makes its money from advertising and commissions from the vendors or other sites. Did someone mention resellers? No, I didn't think they did.
Businesses get poor service from reseller cowboys
Businesses are at risk from receiving poor advice and support by neglecting to check reseller accreditations, according to Trams, Apple UK's leading reseller.
By skimming over vendor certifications, businesses are potentially leaving themselves vulnerable to sub-standard service from their IT reseller.
This, the firm claims, could include a low level of technical knowledge, lack of ongoing support, poor end-user training and limited installation capabilities.
Nigel Lomas, the reseller's sales and marketing director, said that the problem is accentuated when dealing with multi-vendor environments where the supply of complex system configurations requires a high level of expertise.
`Customers are often more concerned with price and delivery time than with checking accreditations, and small print is letting channel cowboys slip through the net', he said.
According to Lomas, the value-add that accredited channel partners provide is limitless in terms of training, support, and the guarantee that every stage of the process is backed by the vendor. `Channel partners provide an invaluable service for lower overall cost of ownership and operation', he explained.
Lomas argues that resellers, as well as end-users, benefit from good vendor accreditation schemes, as technical and industry expertise is key in winning and retaining business.
Northamber feels effect of year 2000 sales slump
Northamber reports that it suffered a drop in sales and profits during the second half of 1999, as corporate IT spending was put on hold ahead of the Year 2000 issues.
For the six months ended December 31, 1999, the distributor says its profit was 3,4 million pounds - down from 4,6 million pounds during the same period in 1998. Sales, meanwhile, fell from 141 million pounds in 1998 to 133 million pounds in 1999. David Phillips, the firm's chairman, said that results compared `quite favourably' with the equivalent period in 1998, adding that the second calendar quarter of 1999 proved to be the lowest point of the year.
Sales, thankfully, are now ramping back up again, after the Y2K IT problem turned into something of a damp squib.
Ingram offers surplus through online auction
Ingram Micro is now selling its excess and obsolete PC hardware plus software through online auctions - the first of their type from a major UK distributor.
The distributor is keen to stress that the Internet auction service, which starts in April, will only be used to offload `return-to-vendor' stock, but may be extended to sell products with damaged packaging as part of bundled special offers.
Mary McCormack, the firm's e-business marketing manager, said that the service was only open to resellers, who will use ID's and passwords to block end users from the site.
Evesham to buy out Research Machines' leases
Evesham.com - formerly known as Evesham Micros, is offering refinance any outstanding credit agreements that any UK schools currently have with Research Machines.
RM has had something of a solid grip on the educational side of the UK computer sales channel, thanks to its early sales of machines in the late 1980's and early 1990's into many schools.
Today, the company offers its machines on credit to many local educational authorities (LEAs), a facility that few resellers can match. Evesham.com is now offering its current and prospective Education customers a variety of competitive re-finance packages - using the same rental amount that each school is currently paying - to create a further spend with no increase in the school's current monthly, quarterly or annual rental costs.
Andrew Cross, the firm's divisional sales manager, said that the company has been testing the scheme in the South West of England with great success and has decided to extend it to cover every school in the UK.
The scheme allows RM's education customers to approach Evesham and its dealers to settle their current leasing agreements. Evesham says it can then replace each school's existing computer equipment - with higher specification PCs, or with other, more modern equipment if desired - without the school incurring a higher monthly payment.
This means the school can upgrade its equipment immediately, instead of having to wait until the end of the current lease. The PC vendor says that the type of finance being offered will depend on each school's individual need, but will be very flexible in any case - the general scheme will allow schools to have a deferred payment period of up to one year.
IBM UK, 0044-1256-343000 (GB), http://www.ibm.com;
PC Index, 0044-115-942-3145 (GB), http://www.pcindex.co.uk;
Trams, 0044-20-7544-1234 (GB), http://www.trams.co.uk;
Northamber, 0044-1342-323525 (GB), http://www. northamber.plc.uk;
Ingram Micro UK, 0044-1908-260422 (GB), http://www.ingrammicro.co.uk;
Evesham Micros, 0044-1386-769601 (GB), http://www.evesham.com