Ease targets, vendors urged


Ease targets, vendors urged

Microscope contributor


The channel has called for vendors to start factoring the economic slowdown into their sales forecasts, as sales are on average five to 10 per cent below expectations, according to industry sources.


This means there is a serious risk that the UK partner community might not achieve some back-end rebates, said Andy Gass, managing director at Computer 2000.


"A combination of some vendor rebate changes and a slowness to align targets to the current economic conditions is making us look very hard at how much rebate earnings we will have overall," said Gass.


Last week Ingram Micro confirmed it was passing on increased freight charges to resellers as fuel prices continue to rocket in Europe. Now arch rival C2000 has heavily mooted upfront price raises to claw back the potential loss of back-end margin.


"The big risk is that the overall back-end element is in danger and there may need to be some price re-alignment to reflect that... I need to make that compensation elsewhere," Gass told MicroScope.


 If vendors failed to re-negotiate sales targets they would inevitably lose mindshare among distributors and resellers, he added


 Vendors have been slow to recognise changes in the market, agreed Alistair Edwards, senior analyst at Canalys, but pushing ahead with price rises would not be a success in the economic climate.


There is no current or planned programme to raise prices at Bell Micro, said Graeme Watt, president of worldwide distribution, but he agreed the market was challenging.


"There is a risk around rebate," he told Microscope, "one risk is if vendors pull their belts in to adjust for market conditions and the other major risk is that vendors set unreasonable expectations."


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