Ingram sticks with SMEs
Continued focus on SME channel as retail and mail-order business drops off
Ingram Micro Europe will continue to focus on the SME reseller channel to generate sales, as its retail and mail-order business becomes less profitable.
Following its strong quarterly results, Greg Spierkel, president of the broadline distributor, told CRN that Ingram has been successful in "changing the mix" of resellers it deals with.
In March Spierkel said the firm would sign more SME VARs, offering improved credit lines as an incentive. "This is going well and we will keep growing our SME reseller base," he said.
The company's European division recorded a five per cent increase in sales to $1.8bn for its third quarter ended 30 October, accounting for 34 per cent of the company's global total. Profit was $10.1m, compared with a loss of $12m for the same period last year.
Spierkel said: "We have offset the lack of profitability from our large retail and mail-order customers by growing our total base of partners, predominantly through signing SME resellers."
Product categories such as mobile and wireless are doing particularly well, he added.
Ian Kilpatrick, group managing director at specialist distributor Wick Hill, suggested that everybody wants to be in specialist SME markets. "This is a reflection of the decline of other markets," he said.
According to Spierkel, Ingram has also benefited from its Profit Enhancement Programme, which aimed to save $160m by Q1 2004, and increased global profit despite lower sales. "The last of the changes in Europe have now been made," he said.
These included job cuts and facility closures, as well as abandoning certain businesses.
Ingram's competitor Bell Microproducts is also bullish following positive results for Q3 2003.
Separately, Cisco has announced its financial results for Q1 2004. Profit reached $1.1bn, compared with $618m in the same period last year.