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Distribution is continuing to react to the move to more of a subscription model by providing the channel with access to more funding options.
Arrow Electronics has become the latest to recognise the challenges that partners can face with cashflow if they are dealing with customers that are demanding more flexibility and are looking for partners that can operate with the same level of financial freedom.
The distributor has cut the ribbon on Arrow Smart Terms, which is available for those offering subscription, support and hardware. The offering matches the deferred payment terms covering the period beyond standard terms for periods as long as five years.
The majority of Smart Terms support has gone around subscription and support so far, but hardware can be an option if required.
Arrow recently sat down with MSPs and economists, including representatives from the Bank of England and Hitachi Vantara, to discuss the current state of the economy and it became clear that protecting working capital was a top priority.
There were also concerns that rising inflation was becoming a concern at a customer level and that was also triggering more demand for greater financial flexibility.
Arrow hopes Smart Terms will help partners land new business, protect their own liquidity and protect themselves more during increasingly uncertain economic times.
“Working closely with your distributor is essential,” said Nick Bannister, vice-president sales for Arrow’s enterprise computing solutions business in the UK and Ireland. “Increasingly, partners need non-standard terms to secure deals and manage their working capital. Arrow Smart Terms aims to support the channel by allowing customers to order from partners under a periodic billing methodology and then mirroring that up into the supply chain.”
Others in distribution have also recognised the need for more flexibility, with Westcon-Comstor launching its Flex proposition this spring to support those moving to monthly subscriptions.
Speaking to MicroScope recently, Westcon-Comstor CEO David Grant said Flex has been one of its most successful programmes and had hit a chord with its channel base.
“It’s been the most successful initiative that we’ve launched and we’ve got lots of interest, lots of inquiries,” he said. “It is interesting to the vendors and to the partners, so it’s been very successful.”
As well as financial support, there have also been moves in distribution to help partners manage subscription business. Last week, Nuvias Group underlined that partners could access that feature as part of its Nuvias ONE digital toolkit.
As well as subscription-based service provisioning, the toolkit includes order and inventory tracking, training modules and market automation.