Hot Margin Maker Peripherals

While inflation has begun to impact the U.S. economy, peripherals pricing has remained steady, making them an increasingly strong bargain compared to other non-IT goods and services.

Out of this environment there emerges a picture of a healthy margin structure for peripherals, which the Test Center details in this 2008 Margin Makers special report. And it's a picture that should hold while the market continues to adopt the new technical breakthroughs and usage patterns.

As document imaging solutions and electronic document processing become more common, scanners are playing a bigger role in customer networks, and VARs that play their cards right can see extra margin from the software and services that go along with networked scanners.

"There is some ad-hoc scanning going on, but more and more we find out that the resellers are involved in bigger systems implementations. If you have a scanner you probably have a need for storage. They also have networking if they're moving images around a network. It's really a nice component to a very profitable system," said Don McMahan, regional business manager and vice president of sales, document imaging division, U.S. and Canada, for Kodak, Rochester, N.Y.

LCD prices across the board began by mid-year to encounter some pressure, largely due to significant new manufacturing plant capacity that's come online in 2008 and earlier. So how are manufacturers providing VARs with margin opportunities in an LCD space with this dynamic?

One word: Options.

ViewSonic has ramped up its 22-inch to 24-inch solution set, featuring such products as the ViewSonice vx2640w (pictured).

With UPS and cooling product sales, solution providers are, as with other peripherals, making most of their money on services and installation.

Vendors are also rolling out programs to help VARs make UPS sales.

American Power Conversion Corp., a division of Schneider Electric, West Kingston, R.I., topped the Channel Champions margin makers list with 20.15 points, with products such as the APC Smart-UPS RT (pictured).

With advances in storage virtualization and deduplication, they're continuing to point to data center add-on storage as a valuable margin opportunity. Offerings in add-on storage include the Western Digital My Book hard drive (pictured).

The 2008 CRN Channel Champions survey found that top vendors provide them with product margin opportunities ranging from 10 percent to 20 percent -- and from vendors whose offerings can range between $10,000 to $20,000 in street price. IBM Corp., Hewlett-Packard Co., Iomega Corp., Sony Corp., Quantum Corp., and Exabyte Corp., according to VARs, have all been offering double-digit margins even in an economy that had some fearing a recession earlier this year.

In spite of ups and downs in the economy, scanners have been showing double-digit growth for the past 10 years as both enterprise and SMB companies deploy imaging solutions, he said.

Kodak makes its own Capture Pro imaging software, giving VARs the ability to make money both on the software and on installing and configuring it.