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Distribution role in dealing with price rises should be credited

The price rises that have plagued the industry since last summer could have been worse if distribution had not managed to soak up some of the pressure

The role that distributors have played in preventing the price rises caused by currency fluctuations from being much worse is one that is at risk of being overlooked.

As a result of the ability of distributors to forecast the impact of events like elections, Brexit referendums and known economic changes and make plans to shield resellers from the worst of the changes it has become almost taken for granted.

The knowledge outside the channel about the role that distribution plays is much poorer and that tier of the channel could be banging the drum more to highlight the work it has done through the last seven months of price rises.

Arrow ECS EMEA president Eric Nowak said that partners understood the value that distribution had delivered during the period of price rises but much more could be done by the industry to underline the role it plays during times of economic constraint.

"Collectively as distributors we should communicate much more on the benefits," he added "We are stuck in the middle and we took more risks than usual and were more flexible."

"I believe we should be more vocal on this," adding that organisations like the General Technology Distribution Council were the sort of groups that could be used to highlight the role that players like Arrow ECS have played.

Hardware price rises from the US vendors were increased to the tune of 10% last August with some coming back for a second hike as the weakness in the pound continued.

So far most of the household names have put prices up, including HP, Lenovo, Dell, Apple and Microsoft. A lot of the previous price rises were prevented from being fully felt by users thanks to the efforts of distribution in managing stock and demand has not suffered as a result.

"Overall in the UK the revenues have increased in line with the new ASPs so demand has not been heavily hit. Until Article 50 is triggered and the formal process actually starts the channel is at the mercy of the overall economy," said Jonathan Wagstaff, country manager UK & Ireland at Context.

From a distribution point of view Nowak pointed out that even after Article 50 is triggered the process will take years, making it less likely there would be some sudden reaction to the political decision.

This was last published in March 2017

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