Resellers forced into assembly

Direct vendors have stepped up the pressure on resellers, forcing them to consider assembling their own PCs in an attempt to compete on price.

A survey carried out by PC Dealer and market research firm Context showed that 62 per cent of resellers recognised that no-name assemblers are becoming a real threat to their business. It also revealed that 52 per cent of respondents believed that making higher margins and offered value for money to the customer were the two compellling reasons to assemble their own PCs.

But only 32 per cent of resellers are actively selling own-brand machines, although this number is expected to increase in the next few months. More than 30 per cent of the resellers questioned admitted that they were thinking about considering selling own-branded PCs.

The survey showed that because of the increasingly high levels of competence in the channel, resellers now have the capability to assemble their own brand PCs. Personalised branding for individual companies is also seen as an incentive to go into assembly.

But some resellers have written off entering the assembly market because PC assembly is seen as generating support and maintenance costs which would not normally be incurred, and breaking into a highly competitive market is very difficult.

Robert Cashman, UK research analyst for Context, said: ?Resellers are interested in assembly, in theory, because the vendors are really squeezing the market. But the price competition from the direct players is such that it?s not something that will really take off in a big way.?