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PRICE PROTECTION

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DQC News Bureau
Updated On
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Vendors are not interested in giving price

protection...

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Despite the fact that it is the vendor who decides the

price, it is least bit interested in offering price protection in the event of a

sudden price drop. At times like these when our margins have shrunk to below one

percent, even a slight price drop without sufficient protection is a cause of

grave concern to us.

"Vendors

should enforce new prices



only after giving substantial prior notification
"

Vijay

Narsinghani



Director



Intelligent Computers

Our margins can get completely wiped out or we may get

stuck with huge inventory. Either ways we happen to lose. Ideally, vendors

should enforce the new prices only after giving substantial prior notification.

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Give us a roadmap...



Barring Intel, I do not think any other company has a roadmap to offer to

partners. Why can’t vendors be honest enough and provide us with a product

roadmap so that we know when to stock what product and to what extent. I am sure

vendors know well in advance before they phase out a product or drop the prices.

Either they should share this information with the channel community or offer

price protection at least to the second-tier partners.

Check our stocks...



Vendors are always welcome to come to us and check the stocks lying with us.

Based on the stock that is with us, they can offer compensation that need not be

necessarily be in the form of cash. Ultimately it is their product that is

getting sold in the market.

Furthermore, what is the logic that if I buy today, I

end up paying much more than my competitor who buys tomorrow. Even though I may

have been very loyal to my principal, yet I would stand to lose in the market,

as my competitor would be offering the same product at a much lower price. I

think this is a very unhealthy phenomenon.

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Price drops are well planned...



I am of the firm opinion that the price drops across different product

categories that have been happening are a well-planned move from vendors’

side. Either this is true or that they have so far been selling at unrealistic

prices. How else does one explain the gradual price drops that happened in the

CDRW market over a short span of two months?

There are vendors who change prices on a daily basis.

We dealers can’t afford to sell the same product at different prices everyday

when we have bought the goods at one fixed price. Sales team of most vendors

work on a daily target kind of system. And to achieve their targets they don’t

mind dropping the prices or even dumping the product with dealers.

We ensure price protection...

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For us providing price protection to our partners is

very important. Our policy is that partners should not lose money at any stage

because of price fluctuation. We provide modvat billing to all our clients and

OEMs and also keep our channel informed about any price fluctuation likely to

happen in the days to come. As far as memory business is concerned, we get

advance information about the international price trends and accordingly pass on

the same to our partners.

"Price

fluctuations are a result of variance in the supply and demand equation

and are not in our hands
"

Indrajit

Sabharwal



MD



Supercom Memories

We assist channel in stocking appropriately...



Apart from providing a product/price roadmap to the entire chain of

partners, we also assist them in buying/stocking the right product at the right

price and right time. We as a policy try not to change the prices fast. However,

there are many external factors specially price fluctuation in the international

market that may lead to the sudden price changes. But our endeavor is always to

keep our partners and OEMs intimated in advance about any price change.

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Incentives can be offered to the lower tiers...



It is very difficult to get the actual stocks status/stock audits from the

lower tiers. However, if any of the lower tier (at the reseller level) is stuck

as a result of price drops, we try to help them out. When the reseller comes for

a purchase the next time, we ask the distributor to sell the product only at the

transfer price. Alternatively, we also see that they give a credit note to the

reseller.

But it must be understood that checking stocks

physically at individual reseller’s site is not feasible. At the same time the

onus also lies on the reseller to get some information or forecast about product

price and demand prior to stocking.

Price fluctuations are often not in our hands...



Price fluctuations often are not in our hands. When there is a price

fluctuation in the international market, the gray channel operators reflect them

immediately in the Indian market. The fluctuations are also a result of variance

in the daily supply and demand equation.

All this makes us too revise the prices. But we make

sure that this is not brought into effect immediately. For us our commitment and

channel protection is very important. And one cannot allege that fluctuations in

Simmtronics memory modules are deliberate.

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