HP revises reseller rebates

Savings to come direct from distribution as vendor discards Compaq Second Tier process

Resellers will no longer be eligible for rebates under Hewlett Packard's model, but instead will be passed savings directly from distribution.

The vendor is implementing its First Tier claims process in the UK and Europe from February next year, meaning that only distributors claim rebates, and is scrapping the old Compaq rebate model which saw both resellers and distributors claim rebates.

Andy Vickers, UK and Ireland SMB channel director for HP, said: "HP has been using the First Tier model for two years now, but there are still some partners using Compaq's Second Tier model.

"However, from 2 February we will be implementing the First Tier claims process across Europe and the UK."

HP was going to implement the model on 10 November, but has decided to give "distribution partners more time to get up to speed".

Rebate claims will be dealt with centrally across Europe to cut costs and make things easy for distribution, according to Vickers.

"There is always nervousness in any transition, but resellers will be spared the administration costs and will not be out of pocket," he claimed.

Paul Musgrove, managing director of VAR PS Office Supplies, said: "Anything that helps to level the playing field is good. The rebate system has been pretty useless, because it is complicated and too slow.

"Resellers just want a simple process, and if this works, it will give all partners a fairer shot at the market."

Shaune Parsons, managing director of VAR Computer World Wales, said: "With rebates we would sometimes wait for up to 90 days for the money. When you have several large deals on the go, it is your own profit you are waiting for."

Andy Dow, commercial manager at distributor Westcoast, said: "HP is taking the old Compaq model and disposing of it and instead are using a tried and tested model that we all know works well."

Carl Greener, head of categories, HP at Ingram Micro, said: "HP has given distributors more time to ensure this is implemented as seamlessly as possible in February.

"It will allow HP resellers to be more competitive and win deals against Dell, and also drives more HP sales through our business."

However, one UK reseller called for "more UK autonomy" and added that too much European centralisation could favour HP's competition.