Give Credit Where It’s Due

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According to a recent study conducted by Reality Research for the Global Technology Distribution Council, there were $71.5 billion worth of computer product purchases made by resellers through distributors from October 2000 through September 2001. Of that, distributors extended $39.3 billion in credit to second-tier resellers. That means more than half (55 percent) of those purchases were financed by the distributors themselves. By comparison, in 2000's more robust market, distributors extended $32.7 billion worth of credit, or 42.3 percent of the industry's financing. Significantly, in 2000, when there were more distributors to offer credit lines, less credit was offered. Despite the attrition in the distribution industry that resulted in fewer 2001 top-tier players, the remaining distributors stepped up to bat when the economy tightened and VARs needed their help. In an upcoming issue, we'll tell you about some of the most creative financing programs distributors have offered during the past 12 months.

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