Ingram may rationalise further to shore up margins

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Ingram Micro Australia has flagged another year of possible cost-cutting and rationalisation, tipping a need to maximise returns as sales margins stay tight.

Ingram Micro Australia has flagged another year of possible cost-cutting and rationalisation, tipping a need to maximise returns as sales margins stay tight.

Steve Rust, managing director at Ingram Micro's local division, told CRN this week that the broad-based distributor aimed to take more costs out of its business and get more room to move around the tiny margins now prevalent across the channel.

Ingram Micro would also encourage resellers to do the same. Resellers could also whittle their own businesses down, Rust said, and Ingram Micro could perform more of the work for them.

“[For example], there are no reasons today that resellers need to have a warehouse. We can do it in a seamless, safe manner. It's feasible for us,” Rust said.

Rust added that Ingram Micro was globally well placed to lift logistics management and supply chain processes to “improve its interface” with resellers.

He said that of course Ingram Micro really wanted resellers to buy more from Ingram Micro. However, the distributor also wanted to team up with more resellers – particularly larger resellers -- to improve “efficiencies”, he said.

“Smaller resellers don't have the resources to do that. But the bigger guys do and I think there would be benefits by making mutual investments to make linkages between us,” Rust said.

He said that he'd also like resellers to invest more in emerging technologies, such as some of the newer security offerings. Some resellers, like in any market, adopted technology first and were more pro-active.

“Others sort of follow and we can help them, particularly in some of the emerging technologies,” Rust said. “We'd like to encourage resellers to expand in these new areas because we're living in a world of change and margins are drying up in traditional areas.”

Resellers were putting their companies are at risk in today's business climate if they weren't considering evolving to new business models, he said.

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