Ingram, Corel Rehash Terms

The two companies now are renegotiating their contract over a 90-day period to resolve the matter, said Jim Bakken, vice president of partner sales at Corel, based here. Ingram Micro has distributed Corel products in North America since 1989.

"We look at them as a strategic partner. They look at us as a valued vendor. The main thing is our customers can still place orders through Ingram Micro," Bakken said, adding that he's confident a deal can be worked out.

Ingram Micro reportedly was losing money with Corel products and last week told the vendor it planned to levy a fee of $1 per unit in stock. Ingram Micro executives couldn't be reached for comment, but a company spokeswoman said the distributor is working with several vendors to improve its strategies for selling products to its retail, VAR and corporate customer segments.

Earlier this year, Ingram Micro and Tech Data announced that some second- and third-tier vendors had to boost their profitability with the distributors or risk being assessed charges. In October, Ingram Micro plans to hold a forum with 20 to 30 software vendors to discuss ways to improve supply chain practices, the company said.

"I understand Ingram Micro's need to be profitable on product lines, but there are other ways to control that besides charging fees," said Jeff Moody, president of Ping Technology, a Waco, Texas-based solution provider. "But if we weren't profitable with them, I wouldn't expect to get the service we get from them."

Corel told Ingram Micro it has reduced its rate of returns to less than 10 percent, from 50 percent last winter. The vendor also has removed more than $10 million from its cost structure, Bakken said.