When Lenovo introduced new pricing for PCs available through distributors in early October, the result for partners like Arey Jones Educational Solutions was that "pricing went up drastically," an executive for the solution provider told CRN.
Prices increased "to the tune of 3 to 5 percent," said Peter Scarpella, vice president of operations and marketing at Arey Jones. "In our business, that really can't happen. We work on thin margins, and prices are dictated off contracts."
For San Diego-based Arey Jones, a longtime Lenovo partner that focuses on the K-12 market, the majority of business occurs through contractual agreements, in fact. Because of that, the October change "wasn't a situation where you can go back to the customer and raise the price," Scarpella said.
After the pricing overhaul, Arey Jones faced a "little bit of shock" at first, he said.
The changes by Lenovo were aimed at restoring equality in the pricing available to value-added resellers, and Lenovo did expect that VARs with special bids wouldn't be pleased, said Sammy Kinlaw, vice president and channel chief for Lenovo's North America PC business, in an interview with CRN this week.
Under the former pricing structure, certain partners could "buy in through distribution-type programs and have a price point that was lower than legacy," Kinlaw said.
The structure was enabling some companies to resell Lenovo products online at a significantly lower price than normal, he said.
"That doesn't lead to a healthy VAR system -- for VARs being able to win on their merit, and being able to win on capability, and being able to win based off of Lenovo history and knowledge and awareness of products. And I had really to make a drastic change," Kinlaw said.
With the recent adjustments, "we've created a level playing field where partners win based on merit," he said.