Will Arrow ECS target the right credit note with resellers?

Opinion

Will Arrow ECS target the right credit note with resellers?

Amid yesterday's slew of acquisition stories was the takeover of UK distributor Sphinx Group by market mover and shaker Arrow Enterprise Computing Solutions.

Consolidation is a natural evolution of a maturing market but many of the resellers that buy from Nottingham-based Sphinx are SMEs that rely on their friends in distribution for credit.

The number one reason most small businesses go bust is because their coffers have dried up and they are not able to cover bills as they fall due.

Arrow has recently talked about turning business away among some smaller reseller accounts because they were shopping around for the best price and showed no loyalty.

So will some resellers be concerned that Sphinx, another source of finance in the UK, now part of Arrow, have a different attitude to credit or place different stipulations on its provision.

Some smaller distributors build up detailed history and knowledge base of clients, as such they are often more comfortable with managing the risk on behalf of old customers.

Bigger distributors often try to minimise risk, a subtle but important distinction.

There is still a fair amount of credit in the channel, but will resellers that had seperate lines with Arrow and Sphinx still enjoy the same levels now that the firms have become one?

Drop me a line, on the QT, off-record, very much hush hush.

paul.kunert@rbi.co.uk

This was first published in June 2010

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