Distributor Ingram Micro has charged into the Compaq channel after signing an agreement with the vendor aimed at boosting its profile in the channel as well as increasing its sales and rejuvenating its reseller base throughout the country.
In a deal brokered over the last three months, Ingram Micro has secured increased supply, sales support and some attractive volume rebates from the PC vendor on the proviso it significantly increases Compaq sales through its reseller partners in the channel.
According to Ingram Micro's managing director, Steve Rust, the distributor aims to increase its Compaq reseller base as well as the volume of stock the resellers are moving with the key message of "ask the impossible".
"We identified four key areas where distributors can play a key role; the availability of product, ease of ordering and credit facilities, pricing that gives resellers a reasonable margin, and access to advice and product support," Rust said. "We then designed a program which would allow us to achieve these goals and approached Compaq with a comprehensive proposal."
Compaq Access Business Group director Tony Bill confirmed he had been approached by Rust earlier in the year with a major distribution plan.
"We had made it clear to our distributor partners that we were looking to back growth initiatives in the channel," Bill said. "When Ingram approached us with this plan, the opportunities for growth through the channel were clear. It is comprehensive, it covers the entire breadth of Compaq offerings and provides a broad appeal to channel partners because it aims to facilitate their access to Compaq product."
According to Bill, the campaign is mostly designed to increase the volume of Compaq product moved through existing second-tier resellers bu it will also hopefully expand Compaq's overall reseller base, particularly in regional areas.
While Rust refused to be drawn on exact figures, he conceded Ingram Micro had gained Compaq's backing after offering significant increases to its overall market share in Australia.
"Compaq has responded to the initiative by offering us competitive pricing on Compaq products, so long as we achieve significant growth in the sales of its products," Rust said. "We have set some very high targets."
Sources close to the deal suggest that Compaq's rebates to Ingram will not kick in until it achieves a 62 per cent revenue growth based on last year's figures. It has also been suggested that a further active reseller rebate will see the distributor attempting to increase its reseller base by as much as 95 per cent within 12 months. However, neither party would confirm these figures.
Despite the aggressive thrust of the campaign and competitive pricing, Compaq's Bill denies the plan will threaten the market share of the vendor's other distributors. He said he is not expecting any distie backlash.
"It wouldn't make sense for us to allow the deal to cannabalise our market," Bill said. "The strategy is to grow the overall pie, so there is more market there for everyone.
While Bill was adamant that the deal with Ingram Micro would not lead to any changes to Compaq's accompanying distribution line up, he foreshadowed an imminent biennial distributor review which he said may lead to some changes to Compaq's distributor base.