Internet auction company Xbidit is hoping to win more business from distributors by offering credit facilities to resellers.
The company, which claimed to be the first online auctioneer to provide such a scheme, believes it will appeal to smaller resellers because it offers a "no minimum order" facility, allowing VARs to secure credit on purchases as small as a single item.
Alistair Handyside, managing director of Xbidit, which went live last year (CRN, 8 November), said 250 resellers have already signed up for the 30-day credit scheme. He expects over 500 to have signed up by the end of the year. Handyside said the scheme was particularly attractive in the current tough market. "Credit is being squeezed daily, but a lot of small businesses rely on it to survive," he said.
Credit is being offered through Barclays Bank, to save the company having to employ its own credit team, said Handyside. VARs applying for the scheme will know within two days whether their application has been successful.
Apaul Nadeem, owner of Halifax-based reseller 2K Computers, said he supported the idea. "This scheme is excellent for companies like mine which has been set up with no capital investment and is financed out of my own pocket," he said. "Getting credit from suppliers gives us the potential to grow a lot quicker."
However, Nitin Joshi, director at consultancy Pannell Kerr Forster said the scheme posed both strategic and operational questions. "Why would resellers want credit with an online distributor when they can get credit with normal distributors?" he asked.
"The other point is that most established distributors already have a credit process in place and are setting up their own online sites anyway."
Eddie Pacey, credit control manager at Ideal Hardware, said the scheme would not be seen as a threat. He said "a lot of research" must have been carried out for Xbidit to offer any value credit. "This scheme is not direct competition and we are streamlining our credit processes all the time," he added.
ALso published in Computer Reseller News
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