HP lays out credit terms

HP lays out credit terms

Distributors will be playing a business development role and are expected to recruit more resellers under the new and tougher HP channel regime, which came into effect on November 4, three days later than originally announced by the company.

According to Tony Bill, HP vice president, personal systems group, South Pacific, the new program aims to achieve higher profitability in the channel and a significant increase in HP revenue.

"We have focused on channel rationalisation and channel economics when we developed the new rebate program and channel development fund program," Bill said. "From an HP standpoint, we will achieve an increase in revenue in a flat or declining market."

By integrating and standardising the pre-merger channel programs of Compaq and HP, the new terms and conditions are expected to have a greater affect on the former Compaq channel -- whose credit terms will be shortened from 60 to 30 days -- than the HP channel. The shortened cycle will be offset by the introduction of an early settlement discount, previously unavailable to the Compaq channel.

Higher targets, new rebates and replenishment regimes are other significant changes designed to increase the sell-through rate for all of HP's products.

"I really want to emphasise our gratitude to the channel. They've stuck with us through a difficult six months and what we're offering them in return are very attractive rebate programs, some very aggressive marketing, and continued investment in business development," Bill said. "It's very important for us to drive that side of the business and we will use channel development funds to develop particular business with a particular partner, which may be a direct-source reseller or a distributor."

The new regime will also see the introduction of the agency model for all HP business units except for the imaging and printing group, which remains committed to a 100 per cent reseller model.

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