Ingram Micro launched an ambitious marketing drive last week that is aimed at dramatically boosting its Compaq sales in the channel. Distributor Ingram Micro claims it is on a winner. Compaq's other volume distributors aren't reporting any damage to their sales. So it could just be that the ambitious move by the distributor and vendor to boost business is paying off.
According to Steve Rust, managing director of Ingram Micro, sales have improved dramatically, even before an advertising campaign kicks off. He said that the main thing resellers are after at the moment is stock availability.
"It is very early days yet," Rust said of the new Compaq sales drive. "But our sales rate has definitely lifted and we are now achieving 95 per cent same-day fulfilment of orders because of the large volume of stock we are holding.
"We started holding a lot more stock last quarter and that helped us move from number three Compaq distributor to number one. It also helped us improve our same-day fulfilment rate to 90 per cent of orders.
"We recognised that the most important driver of channel sales is availability of stock; so we have increased that again and are now getting just about all orders out the door the same day."
Meanwhile, Tech Pacific says it is surprised Ingram Micro has taken so long to implement the type of value-adds Tech Pacific has been offering for years.
David Cullen, managing director of Tech Pacific, said he has paid very little attention to the Ingram Micro marketing push and reported no drop in the volume of Tech Pacific's Compaq sales.
"What's new?" Cullen asked. "The four areas they have identified as being what resellers are after are the same four areas we identified 20 years ago. We see what they are trying to implement as being the fundamental business principles upon which Tech Pacific has been extremely successful."
Fiona Dicker, managing director of Dicker Data, the Compaq distribution agency that will probably feel the pinch the most, was a bit surprised by the elaborate marketing plan engaged upon by Ingram Micro.
"I have always been of the opinion you spend money on marketing when things are good," Dicker said. "You get better results in a buoyant market."
Dicker also said Dicker Data would continue to concentrate on maintaining relationships with the large Compaq reseller base it has been servicing for years.
"I hope there is loyalty out there because these programs are short term and, when times get better, they are not likely to continue. For [Dicker Data], it is about placing emphasis on ongoing business relationships."
Greg O'Loan, marketing planning manager for Compaq distributor Express Data (ED), said ED focuses mainly on distribution of the vendor's "value" product lines. He said ED does distribute some of the "volume" products that Ingram Micro is focusing on, but maintained ED's business was not and would not be affected.
"We have not seen any slowing of Compaq sales in either the volume or value categories," O'Loan said. "So if Ingram Micro's sales are expanding, perhaps Compaq's objective of growing Compaq's volume of sales and reseller base is being achieved."
O'Loan also believes the real challenge for Ingram Micro lies in maintaining relationships after initiating them.
"Our research shows that the number one deciding factor in a reseller's buying decision is the relationship it has with the distributor," O'Loan said. "If [Ingram] starts getting lots of calls for Compaq products, then it will have to employ more staff, and that is a new overhead which has to be maintained."