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Back in Black

Back in Black

There is more than a pinch of evidence to suggest the sustained market slump experienced by the IT channel over the last few months is showing signs of recovery. In a straw poll last week, ARN uncovered a queue of distributors and resellers reporting strong results in June.

Some were preferring to attribute the good sales to the traditional demand spike that comes with the last month of the financial year. However, the consensus was that, even despite this spike, things are on the up.

According to Greg Newham, general manager at distributor Alstom IT, sales for the distributor were up 40 per cent on the same month last year. This is particularly surprising because of the anomalous nature of June 2000, which had the GST as a spending stimulus.

This is a particularly good result because while many others reported a strong rebound in June from a very flat start to the year, most were unable to boast figures matching the corresponding month last year.

"We've had our best month ever in June," Newham said. "Business has been up across the board. It is pleasing that we have been able to grow market share in a flat economy."

Ross Whitelaw, general manager of retail buying group Leading Edge Computers, has also reported a recent semblance of normality in the IT market. He reads the outlook as "nothing but positive" for the channel.

"The reports from all the stores across Australia state that sales in June have been really solid," Whitelaw said. "Our new catalogue worked really well for May/June, and if you take out the external influences of the latter half of 2000 and early this year, the result actually looks very good.

"Many stores have had to tighten their belts. But, from a trading point of view, there are some numbers to suggest that the worst is behind us."

Felix Wong, managing director of handheld distributor Advanced Portable Technologies, said June was also "pretty good" for business. "It was not quite as crazy as a traditional June, but it was definitely substantially stronger than April and May," Wong said.

"We exceeded expectations and we made our quarterly numbers, so I was very happy."

While Alstom IT's Newham doesn't believe the market has fully recovered yet, he does feel it has turned around and now is the time to start taking advantage of that.

"It is time to be tough on the lines of business you pick up," Newham said. "You have to focus on lines of business that are profitable. When times are tough you have to concentrate on the best opportunities.

"Too many channel companies try to sell everything when they should be concentrating on getting the right focus. Resellers should be ensuring that all up-sell and cross-sell opportunities are exploited, and that comes back to having well-trained staff.

"We have been investing a lot in staff training and it appears to be working. Something is working because the business is certainly coming in," Newham said.


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