Distribution giant Tech Data has revealed that it will introduce its US pricing model to Europe in a move designed to raise its margins.
Talking exclusively to Computer Reseller News, Steve Raymund, Tech Data's chairman, said the move comes as part of a global unification strategy designed to drive up European profit.
Raymund said the US division's current earnings were far greater than its European counterpart's.
The pricing model, dubbed Activity Based Costing, accurately judges how much the distributor makes from each reseller, enabling the company to adjust its prices on an individual basis.
"We can offer increased reductions to profitable customers while raising prices on smaller, more time-consuming shipments. Margins stabilised under this system in the US; they are now rising and we expect the same level of success in Europe," said Raymond. The scheme will be running across Europe by next year, he added.
But the move was met with scepticism by Ian French, director of rival distributor Ideal. "It's a great idea in theory, but it's not realistic," he said.
"Bigger customers are always more profitable and I don't see how they can subsidise them by hiking the price up on small ones. But distribution margins do have to increase. The US addressed it some time ago and now Europe has to face up to it. Current prices are unrealistic."
Brian Pierce, an IDC analyst, said: "What it boils down to is distributors focusing on key customers to the detriment of smaller partners. Unless this is part of a larger movement by distribution companies, Tech Data risks losing partners."
Tech Data has also announced that Nestor Cano, former South American region head, has been promoted to president of worldwide operations, and that Graeme Watt has been promoted to president of Tech Data Europe.
Meanwhile, Phil Hackney has been appointed logistics director at Computer 2000, replacing Karl Pohler, who resigned last week.
Computer 2000is expected to be renamed TD UK by the end of the year.
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