Vendors are not interested in giving price
protection...
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 |
|
Vijay 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.
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.
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...
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 |
|
Indrajit |
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.
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.