Channel still chipper despite vendor price hike

VARs insist giving customers a heads-up on incoming price rises is top priority

Resellers have reacted sympathetically to their vendor partners increasing prices in light of currency changes, claiming economic fluctuations are part and parcel of the IT supply chain.

Earlier today, CRN reported that HP had boosted prices across its portfolio by up to 6.5 per cent as of last week in response to sterling hitting an 18-month low against the US dollar.

Other hardware vendors such as Lenovo and Dell are understood to have told partners of their similar plans and more are expected to follow suit in the coming weeks. The former was unavailable to comment and Dell stopped short of directly confirming the changes.

In a statement, Dell said: "Dell's priority is always to provide the best value to our customers. And as always, we will continue to discuss any price fluctuations in advance with our customers and partners to ensure complete transparency."

Paul Barlow, managing director of reseller Servium – which is partnered with the likes of Lenovo, HP and Dell – said the vendor trio had made him aware of upcoming price changes but that he does not blame them.

"When you look at the rate, you can absolutely understand it," he said. "It is never great to talk to customers about prices going up but the silver lining is that it affects everyone and it is not a change in pricing for different resellers or for different accreditations – it is across the board. The playing field has not changed, it has just moved slightly. It does not affect the competitiveness in our industry. It is unfortunate, but you can see why."

Reseller Probrand agreed that the price changes were nobody's fault but said getting this across to customers is essential to maintain trust.

"We're trying to get across that these things happen in the supply chain," said the vendor's product and category manager Gary Price. "The vendor has to pass this on eventually. The margins are not in the industry like they used to be – prices are driven down by customer requirements, by technology and by competition so they probably absorbed this as long as they could... before increasing the prices.

"We are being honest – we are not trying to profit from this as a business but I am sure some of our customers may think we are using it as an excuse to make an extra five per cent, but it is truly not the case. If we make customers aware of how the IT supply chain works, we can help them understand how pricing can change and fluctuate based on situations outside our control, such as the dollar rate."

Price added that he expects more vendors to follow suit and increase their prices in the coming weeks once they get wind of one firm leading the way.

He said that although the price hikes are felt across the channel and will not necessarily make resellers less competitive, certain customers may still hold off on making big purchases.

"What they are going to get for their buck – quite literally – is going to be reduced," he said. "If they wanted to buy 10 units for £500, now they may only be able to afford nine. So they have got to take that into consideration – do they shelve a project, do they cut back? They have budgets to spend to meet their year-end objectives."