When Crowborough-based reseller Compatibility was set up in 1985, it found a niche importing cloned PCs from the Far East. But once the larger players with the ability to import in bulk discovered the market, founder and director Peter Coward was forced to turn to more traditional reselling.
In those days, Coward points out, there were very few brands to sell and they were expensive, so customers were willing to pay for cheaper, cloned machines. But after two years, Compatibility was forced to look for alternative sources of income. "By that time, large importers were bringing in a lot of hardware and had the volumes to cut down the freight cost," he remembers. "It was a tough business because you had to pay cash upfront, it would take three to four weeks for the stuff to get [to the UK], then a month to sell and a month to get paid."
These days, Compatibility sources its kit from more traditional routes - distributors Computer 2000, Ingram Micro and Northamber. Of the three, Coward claims C2000 has the best focus on smaller resellers, the widest range of product and the better service.
Most of Compatibility's customers are companies with five to 50 users, too small to have their own IT departments and within an hour's drive of its Crowborough office. "These are the kind of customers that are interested in covering themselves in the case of a breakdown. And in most cases, we can convince them that we have a better chance of supporting their kit if they buy it from us. What we sell is what we can support. Otherwise support can be a problem," Coward reveals.
Over the last five years, computers have become crucial for day-to-day business operations, making support a vital issue, according to Coward. "If the computer does not work, you cannot do the job anymore," he says.
Coping with bugbears
Despite the downturn, Coward claims customers in the south east have not been affected. "Where we have seen the effects is at manufacturer level. Hardware vendors have been selling kit very cheaply to reduce stocks and so people's expectations about the cost of a PC have reduced," explains Coward.
But he suggests most of Compatibility's customers do not buy on price because they are looking for value add.
While it sells high profile brands like HP and IBM, Compatibility also works with local manufacturer Epic. "Some customers know a brand and want that, but others want specific graphics cards and processors and Epic will build them for us. It gives us more flexibility. We are even willing to install Dell equipment that customers have bought direct themselves," says Coward. But support from manufacturers leaves a lot to be desired, he claims. "The wholesalers wash their hands of support for the smaller resellers and it can waste a lot of our time when something does go wrong under warranty," he reveals, claiming support calls often go through a European centre and get screened before there is any chance of speaking to an engineer.
He points to the Internet as the cause of the biggest changes in recent years. "The Internet is becoming widely used, but not just as a means of advertising or having a Web presence. Its supply systems and order tracking are more useful to our customers," he says, adding his biggest issue with the Web is broadband and ADSL. "For a fixed price you get access speeds that would be impossible with the Web and that is great. But the big downside is availability. You have to be relatively close to the exchange and that is holding up the implementation. Customers want it and it's not in their area. We have no idea when it will be and, apparently, neither has BT."
Coward lists Compatibility's bugbears as training for new technology, gaining credit while waiting for payment from small businesses and virus attacks. On this last point, Coward claims small companies are more vulnerable, yet are ignored by some vendors.
The message from Compatibility, then, is that the smaller guys seem to fall off the manufacturers' radar screens, when perhaps they ought to be doing more to support those who provide a large proportion of their revenues.