Editorial: Giving product sales a leg-up

Editorial: Giving product sales a leg-up

Everybody's doing it - even Dell

Leveraging the channel to drive sales proved a major theme running through several news stories ARN reported this week.

Surprisingly, there was no one more focused on achieving better partner sales than former anti-channel vendor, Dell. The PC manufacturer’s global channel chief, Greg Davis, announced its first distribution deals with Tech Data and Ingram Micro in the US and Canada, and flagged plans to take the model to other regions (see page 6). Dell’s local media spokesperson was quick to dismiss adopting distributors in Australia and said it preferred working directly with resellers. But you only have to look at Michael Dell’s backflip on embracing the channel to realise things never stay the same (he did call his business memoirs Direct from Dell, after all).

It’s easy to understand why a twotier channel model could work for Dell in regions outside the US, such as Asia or Australia. Distributors will provide the much-needed stepping stone to resellers Dell could never reach on its own. They also allow the vendor to provide stock more quickly to market while tapping into local geographic and cultural knowledge. Given the significant decline in global PC sales witnessed in the last couple of quarters, hardware vendors need to explore every possible avenue for growth. Dell is no exception.

What I’m not sure about is whether there are as many perks for distributors to stock Dell products. For one thing, anybody also carrying HP is going to find it difficult to explain why they need to bring on a competing vendor’s products. OfficeWorks, for example, lost HP’s good opinion when it took on Dell’s products in Australia last year. Margin pressure is another consideration.

And given Dell is going to be selling the same machines at similar price points through its direct site, I don’t see a compelling reason for resellers to then go and source them through distribution.

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