Ingram Micro To Institue Fee

The distributor has not finalized the amount of the fee, but sources expect it to be about $100, which is similar to the $100 fee Tech Data initiated in February for its new customers.

The fee will be implemented this quarter and likely will be credited toward the solution provider's first purchase, said Mike Grainger, president and COO of Ingram Micro. "If a customer is serious, we will spend time with them to understand what each of us is trying to do. If you become a real customer, you will get the money back," he said.

The fee does not apply to active Ingram Micro customers, Grainger said.

Many customers are registered as solution providers, but have not purchased products from Ingram Micro, he said.

The fee will offset the costs involved in creating a new account, including assigning sales reps and establishing a credit line, the distributor said.

Most solution providers said the fee was nominal.

"I wouldn't bicker over $100 to not establish a relationship," said Leonard DiCostanzo, president of Turnkey Computer Systems, a solution provider and Ingram Micro customer in Staten Island, N.Y.

"If you go back to the old days, you had to pay $150,000 [or $200,000 just to sell IBM," he said. "I charge new customers a needs-analysis fee to understand their business. I would question why [Ingram Micro's fee is so low. They could make it $2,500 and give you a [Cisco Certified Network Associate class or something."

Nevertheless, John Dexter, sales manager at Computer Center, a 14-year-old Hanover, Mass.-based solution provider, said the new fee guarantees he will not buy product from Ingram Micro. "They won't get our $100, that's for sure," he said. Distributors selling products should not charge solution providers for the privilege to buy from them, he added.

Dexter said he stopped buying from the distributor about seven years ago and uses D&H Distributing as his primary distributor.

When Tech Data started charging its fee in February, it offered solution providers a $200 credit for education, marketing or technical services. In its first month after instituting the fee, the number of new accounts fell almost 40 percent, but revenue generated from new customers remained the same, said Tim Curran, senior vice president of sales at Tech Data.