Buy.com and Ingram
Buy.com's arrival in the UK (see story below) looks set to upset some of the retail channel, since the company is all but guaranteeing its prices will beat the competition.
The decision to partner with Ingram Micro will be seen by many as a method of Ingram indirectly entering the end user channel, rather than remaining as a distributor.
The fact that Buy.com outsources just about every aspect of its operation, however, is an interesting sales model. It doesn't reduce the chain of supply for PC's and peripherals, but it does reduce the profit margins in the distribution channel.
In many ways, Buy.com represents a step forward from the direct-sell Web suppliers that have sprung up in the UK this last 12 months.
Although most of these have been retail customer-oriented, it can only be a matter of time before the business market is tackled. Business dealers do a lot more `hand holding' of their customers and, as a consequence, profit margins ar slightly higher.
But, with Buy.com offering 8am to 10pm telephone support, seven days a week, the writing could be on the wall for the smaller scale Web computer sales outlets.
Bell Microproducts snaps up Ideal Hardware
Bell Microproducts, the US components and storage distributor, has surprised the UK dealer channel by acquiring Ideal Hardware, one of the UK's longest-running distributors.
Ideal, which was part of the InterX group, dates back to the early 1980s, when PC's first arrived on the scene. InterX was formed last year when Ideal reshuffled and its various divisions were split off.
Bell Microproducts has been looking to expand into Europe since early this year and sees Ideal - which concentrates on the high end of the storage market - as a platform for a European launch. Both companies stock and sell broadly the same product range, so the move is a logical one.
Buy.com arrives in the UK
Continuing the `US invasion' Buy.com has launched a UK version of its popular US and Canadian Web sites.
Like the North American service, the UK Web site guarantees to beat high street and online retailers, offering UK consumers the lowest prices on over 10,000 computer software, hardware and peripheral products, ranging from digital camera's to PC's and PDA's.
The firm's UK operation claims that its huge purchasing power enables it to negotiate the best prices with suppliers in order to guarantee the lowest prices every day combined with special deals, particularly on bundled products that are not available anywhere else in the UK.
What's interesting about the buy.com, is that it has adopted a virtual business model, outsourcing the majority of its back office operations, such as distribution, fulfilment, and credit card processing.
This model is claimed to allow greater efficiency through the large scale and expertise of its partners. It also allows new product categories to be added easily and rapidly, while minimising capital investment and the costs and risks of carrying stock.
Readers of Dealer Info can expect to see continental Europe versions of buy.com arriving later this year.
Murray Hennessy, the firm's CEO, said that that plan is to beat all other prices in the UK channel, both on- and offline.
"We've the benefit of three years' experience as an award-winning Internet superstore in the US and are looking forward to offering the same outstanding value and service to our customers in the UK," he said.
Inventory for buy.com is bought, held and controlled by Ingram Micro, buy.com's main distributors. As customers order, the product is distributed from Ingram's main warehouse in Milton Keynes by UPS.
Orders, meanwhile, are handled by Client Logic, which maintains a call centre operation in Exeter in the South-west of the UK. Telephone customer service is available from 8am to 10pm, seven days a week.
Ingram Micro hikes reseller supply prices
Ingram Micro has just announced it is increasing its prices to its resellers in the UK, aiming to pass on the costs of changing its vendor terms and conditions. In plain English, this really means that the distributor wants to increase its profits margins. In the first quarter this year, the distributor's profits were down to 24.7 million pounds from 42.3 million pounds in the first quarter of last year.
Effective from May onwards, Ingram is hiking its reseller prices by one per cent across the board. The move compensations, the distributor says, for the decline in vendor's rebates to the firm.
Coming in the same month as Ingram has struck an end-user supply deal contract with Buy.com (see above story) however, dealers could be forgiven for thinking they are being pushed into a corner.
Lasat increases its dealer relationships
Lasat, the Danish connectivity vendor, which has successfully diversified from being a modem company into a secure connectivity supplier, is looking to quadruple its dealer relationships by the end of the year.
The firm says it wants to sign up another 120 dealers to handle its high-end networking products, which include thin servers and VPN systems. The company has just signed a distribution deal with Ideal Hardware -a move that has a lot to do with Bell Microproducts' acquisition of Ideal (see above story), as Lasat is handled in the US by Bell on the distributor level.
Lasat says its modem division currently has 40 resellers in the UK, and it estimates that the high-end networking market (specifically thin servers) will increase by 1,000 per cent over the next three years.
Kevin Bulcock, Ideal's product manager, agrees. He said that the ncrease in Internet activity and the need for reliable security systems is driving sales demand sky-high at the moment.
"Ideal is excited to be involved in this project and believes that it can offer excellent deals to potential resellers," he said.
Tiny expands into online auction market
Tiny Online, the Internet and e-commerce division of the OT Group, perhaps better known for its Tiny Computers retail operation, has opened a Web site called Tiny Traders.
Located at www.tinytraders.co.uk, the site offers an online auction and direct sales engine for the consumer-to-consumer and business-to- consumer markets.
The firm says that sellers can list their items for free at the site while buyers can browse and make bids, also free of charge. Once a deal is struck, Tiny Traders will bring both parties together using e-mail to organise the exchange of money and goods or services. The firm then retains a small commission fee on each item. The site doesn't just cover IT products, although PC's and peripherals are a major feature, but the site represents an interesting diversification for the company.
Ideal Hardware, 0044-20-8286-5146 (GB), http://www.ideal.co.uk;
Ingram Micro UK, 0044-1908-260422 (GB), http://www.ingrammicro.co.uk;
Lasat, 0044-1908-281661 (GB), http://www.lasat.com;
Tiny Computers, http://www.tinytraders.co.uk