Hewlett-Packard prices to rise by at least 1% from May

Hewlett-Packard distributors will raise prices across the portfolio by a minimum of 1% from the start of next month after it emerged that the supplier plans to withdraw some back-end rebates for wholesale partners.

The US heavyweight is making a number of channel changes that kick off on 1 May, including shelving partner development funds for resellers and moving to a discretionary model and consolidating channels to reduce inventory levels.

However, the supplier also plans to remove key sales objectives (KSO) rebates for distributors leading to suggestions that prices will rise by at least 1% as distributors try to make up the money by charging more to end-users.

Andy Gass, managing director at Computer 2000, agreed it would need to "change pricing" as a result of HP's actions.

"However, we welcome the simplification of rebates and anything that makes returns more predictable and allows us to focus on demand generation for HP and our resellers is a good thing," he said.

Julian Klein, UK managing director at Ingram Micro, said the changes HP planned "would almost certainly result in price changes but we have to see where we are at the beginning of May".

It was a case of simple mathematics for Alex Tatham, sales and marketing director at Westcoast: "If HP is taking away compensation at the front-end we need to make it up at the back-end."

"We are using the age old sales model of cost plus to make money," he added.

A version of this story originally appeared on Microscope.