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Computacenter pulls out of PC & printer distribution

Written by Julian Dent |

When the return on capital goes below the cost of capital…it makes sense to ditch the business that’s dragging it down.

Computacenter has done the maths and reached the only sensible conclusion and is pulling out of trade distribution of PCs and printers to focus on servers and storage products. It is never going to be able to reach the level of market share in these categories that will generate sufficient profits to cover the overheads and make a positive return on capital.

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Growth of on-line sales undermines retail resilience

Written by Julian Dent |

A recent study by OC&C in the UK has shown the impact of the growth on on-line sales on category margins. For those retailers whose sales are dominated by these categories, profits (EBIT) are considerably weaker.

The categories which have seen margins most affected by the high proportion of on-line sales are:

Music, video and gaming (30% of sales are on-line, 2% profit margin)
Electricals (15%, 2%)
Books and stationery (14%, 2.4%)

Grocery is perhaps the exception (4%, 3%), affected more by intense concentration than by the proportion of on-line sales.

At the other end of the spectrum are categories which include:

Clothing, footwear and accessories (4% on-line, 8.8% margin)
Opticians, pharmacies, health & beauty (2%, 7.1%)

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What should IT vendors do as the channel undergoes a shakeout?

Written by Julian Dent |

Right now IT resellers are going bust at the rate of 15 a week in the UK and similar patterns are emerging across Europe and the US. Some commentators are talking in terms of 1 in 6 resellers being in trouble and many of those that are clinging on are relying on overdrafts as a permanent source of finance

Credit insurers are withdrawing or reducing cover for the major distributors limiting their ability to provide extended credit to their reseller customers for those all-important big deals with large/medium corporates.

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New front opens up in the battle for market share in distribution

Written by Julian Dent |

As predicted in earlier posts, distributors are now using a new weapon in their fight to retain reseller accounts – Smart Credit. Vendors should take note and ensure their programs can underpin this strategy, as smart credit will become a critical success factor.

This week CRN reported that Bell Micro will be granting more credit to the VARs that demonstrate greater loyalty:

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Tough times call for the right measures

Wednesday, 26 November 2008 00:00 | Written by Julian Dent |

It’s become very fashionable for politicians to claim their measures to respond to the current economic crisis are the “right” ones as in, “this is the right thing to do” (Gordon Brown, Barack Obama, Nicolas Sarkozy, et al).

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Last Updated (Monday, 01 June 2009 13:44)

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