Dealers beat gloomy forecasts

Romtec survey says dealers are on to a winner but the good times are over for small indie retailers

PC dealers have experienced a boom during the 90s despite gloomy forecasts that they would be squeezed by off-the-page, mail-order and retail sales tactics.

And dealers will continue to be key players, according to a Romtec survey on changes in the UK indirect channel over the past five years.

By contrast, direct marketing resellers have shown limited turnover and productivity during the period.

The last year has seen average turnover for dealers rise from #5.2 million to #5.4 million ? up 270 per cent on 1993?s average of #2 million.

Retail channel players outstripped PC dealers in growth terms during the period with sales up 300 per cent since 1993, but the boom days appear to be over for small independents. Last year, average turnover dropped by #900,000 to #2.4 million, suggesting the channel is consolidating behind bigger players.

All reseller categories ? except retailers ? have seen a growth in productivity since 1993, with dealers recording the greatest boost of 47 per cent.

Dealers may be wise to avoid vendor demands for more value-adding activities, judging by the fortunes of Vars over the past five years. Var numbers are down since 1993, falling from 33 per cent of the channel population in 1993 to 22 per cent in 1997. But Vars continue to represent a stable and mature segment of the indirect channel, Romtec argues.

Service companies have shown the least change, with low to moderate increases in turnover and productivity, while numbers increased by just five per cent. Romtec says this suggests ?potential vulnerabilities and a need to focus on reducing costs to maintain or increase profitability?.

Romtec defines a dealer as having more than 75 per cent of its business product sales-based, and a Var as a business pulling in more than 25 ? but less than 50 ? per cent of sales from services.

Romtec: 01628 770077