IBM tightens reseller noose

IBM Corp. has dumped the direct sales reality in the lap of Australian resellers today after confirming its Web-based sales strategy is only the start of a wider plan to increase online PC sales.

An IBM spokesperson said this morning the company's new pricing structure sees its old recommended retail price and general reseller price models scrapped in favor of a new Web pricing scheme. Under the new model, resellers will receive a seven percent margin, based on a discount derived from its Web prices as advertised on IBM's local Web site.

The model effectively caps the amount of margin resellers can hope to make from IBM PCs and notebooks, particularly in online sales.

"IBM has gone direct to the marketplace," the spokesperson said. "In essence, this is part of the bigger picture to become more competitive in the marketplace."

The Web pricing scheme was introduced early this year and IBM has already discussed the changes with its leading reseller partners. IBM now sits alongside Compaq, Dell and Gateway in the race to lure online sales away from traditional retail and reseller channels.

IBM has defended its actions, admitting it is aware the new pricing structure will raise reseller hackles.

"Change is always something that gives rise to concern," the spokesperson said. "(But) this is about choice. We (have started) to tap into the online market place that neither IBM or the channel was reaching."

IBM reports it is still dependent on the channel for the majority of its sales.

IBM Personal Systems Group general manager was not immediately available for comment.

David Cullen, Tech Pacific's managing director, said he had been made aware of the pricing changes and said it would hit smaller resellers the hardest.

"Any direct model gives us some concern," he said.

However, Cullen said he understood what IBM is doing online to become more competitive with the likes of Dell. "We don't expect it to impact us."

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