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Paying the price for buying direct

The myth that buying direct from manufacturers is cheaper than going through the channel has been exploded by research revealing...

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The myth that buying direct from manufacturers is cheaper than going through the channel has been exploded by research revealing hidden lifetime costs of up to £225 per PC.

Carried out for reseller giant Specialist Computer Centres by global research company IDC, the findings highlight the extent of the additional costs associated with PC acquisition over and above the price of the box.

The research pegs the cost of equipment in any procurement cycle at just 35 per cent of the total outlay, with the bulk of cost of ownership absorbed by installation, maintenance and support.

Steve Rigby, European general manager at SCC, said: “It is no longer enough for professional buyers to chip points off the cost of hardware, which this research shows is less than 35 per cent of the real cost of procurement.”

Resellers on the front line of Hewlett-Packard’s Dell-bashing, like-for-like price war against the direct manufacturer, welcomed the research.

WStore UK managing director Tony Price said: “This is great for resellers. It is a myth that Dell is cheaper than the channel — once a customer gets a PC from [Dell], it up-sells everything.”

Darron Antill, managing director of Reading-based Ultima Business Solutions, agreed there were many hidden costs attached to direct purchasing: “There will be savings with the VAR channel because we take on a lot of the pain [of maintenance].”

Antill suggested the research should be taken on board by other manufacturers that sell direct “but say they support the channel”.

Dell was unable to find anyone to comment on the research last week, but a spokesman for UK-based PC manufacturer Time stood by the direct model.

“The IDC figures seem excessive. The benefits of buying direct are that customers get exactly what they want at the best price because there is no reseller mark-up,” he said.

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