Special Pricing Gets Easier

The IBM Netbill tool allows Synnex and Tech Data to electronically verify and process special-bid pricing for all IBM hardware in less than half the time it used to take, an IBM spokesman said. Ingram Micro also is developing the tool, he said.

IBM executives could not be reached for comment. "It's going to take costs out of all of our collective business models," said Pete Peterson, vice president of product marketing, software and systems at Tech Data, Clearwater, Fla. On average, the process used to take several hours, he said.

Vendors such as IBM generate unique special-bid letters to end users every day with time-sensitive discounts. When customers want to order through the channel using the discount, the solution provider must request special-bid pricing using the letter, Peterson said.

The management of each situation becomes an unwieldy process, Peterson said. Consider that Tech Data receives up to 250 special-bid requests every day, and about 70 percent-plus of large vendors' orders have special pricing associated with them, he said.

"Today, with IBM in particular, we would have go to their Web site to pull the information. Or they're faxing over documents that we have to manually put into our system so our sales teams have the visibility," Peterson said.

In some cases, delays in special pricing bids can mean the difference between same-day and next-day shipping, said Linda Marbena, director of procurement and vendor relations at Corporate PC Source, a solution provider in Bensonville, Ill.

"This is much faster, with better performance. It allows us to ship 20 percent more [orders] on the same day vs. rolling them to the next day," Marbena said. "It's a huge improvement."

Netbill doesn't eliminate the need for special pricing necessary to compete with Dell, but it is a start to competing more effectively, Peterson said.

"Nirvana would be a day when manufacturers didn't have all the one-off pricing schemes out there and went to an everyday low-cost model," he said.