A survey from technology services provider Probrand has revealed it’s likely that IT buyers are missing out on extra discount they are entitled to because vendors are unable to monitor whether these are being passed on by resellers.
Less than 1% of vendors surveyed said they knew with concrete certainty that ‘special bids’ were being communicated to end users. This means IT buyers could be unwittingly missing out and being asked to overpay. In many cases, they can represent up to an additional 20% off the sell price.
The discounts, often referred to as special bid discounts because resellers are required to bid for an allocation of the discounted products, are offered by vendors for various reasons. This may be to generate interest at key times of year, target a specific market segment, speed up sales of slow-moving products or encourage bulk purchases.
The lack of visibility around whether these discounts are passed on raises significant questions about whether resellers are respecting the system or using it to inflate their margins when selling those products.
This is bad news for IT buyers who aren’t getting the deals they expect, and equally frustrating for vendors who offer more attractive and strategic discounts to move product through the supply chain.
And with little to no true visibility of whether special bid discounts are making it to IT buyers, it is clear vendors lack the tools they need to monitor and track special bids through the supply chain. This ultimately means IT buyers are paying higher margins for IT in an unregulated environment.
Ian Nethercot, Supply Chain Director, at Probrand said: ‘‘Vendors are forced to place their trust in resellers to pass on deals IT buyers are entitled to, yet there’s absolutely no way for them to police the process and ensure that thousands of special bid discounts are being passed on.
‘‘More importantly, it is worrying for IT buyers that they are rarely seeing the added value these discounts offer, which means they are ultimately paying over the odds for products and effectively throttling budgets. This simply isn’t good enough.’’