Ingram Micro is to pump more credit into the channel from May as part of an expansion of its outsourcing services portfolio.
The distributor will undertake invoicing and cash collection on behalf of resellers in a move which will allow VARs to underwrite bigger deals without risk, avoid carrying the burden of late payment by customers, and pursue European contracts without having to register for VAT in other countries. The scheme, called Select Source, will be available in the UK next month.
Greg Lockton, senior director for Ingram business development and marketing in Europe, said the programme is aimed at corporate resellers wanting to reduce the cost of product sales, systems integrators wishing to take product turnover off their books, small VARs wanting to sell to major customers and resellers lacking VAT registration for other countries.
Ingram will add whatever margin the reseller requests, and charge a commission for its service based on the length of a customer's payment terms. The usual terms and conditions will apply, except for the transfer of title and risk and payment for the product, said Lockton.
He said the programme is expected to be self financing, and that Ingram will not have to sustain the burden of late and default payments which has contributed to a recent string of poor financial results. Resellers will not be penalised for late payments by their clients, but Ingram will renegotiate contracts with VARs in the event of a customer defaulting.
"The reseller will be paid his margin at the end of the month regardless of whether the customer has paid. If the customer defaults entirely, we will need to go back to the reseller, but we won't go back just because of late payment," he said.
Greg Spierkel, European president at Ingram, said the programme was launched in response to demand. "Initially, resellers and vendors looked to Ingram to provide product availability, configuration and fulfilment services. Today, these companies are also asking us to take over their user billing."
Stuart Dickinson, managing director at Silicon Alley, said it will be useful because it will allow resellers to sell hardware more easily in other countries. It will also allow small resellers to go after some big deals because there is no risk involved.
This article was first published in the 19 April issue of Computer Reseller News
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