Acer maxes margins in whitebox war

Acer Computer has slung a new initiative into the ring to tempt resellers away from whitebox and no-name brands by lifting hardware margins.

Dubbed Margin Max, the program gives resellers extra percentage points on top of their usual margins for upgrading orders to more expensive options -- with more memory or CPU, for example.

Raymond Vardanega, marketing director at Acer, said the incentive plan was aimed at getting the fast-growing firm to be number one PC vendor for SMBs by 2007.

“In the SMB market, there’s a lot of whitebox being sold and I believe we can grow more impressively with this. In 2003, we were the fourth largest vendor in SoHos and SMBs and last year we became the third largest,” he added.

Vardanega said resellers, also, had consistently requested improved margins. Perhaps 50 percent saw better earning potential in whitebox, so Acer wanted to address that.

“It’s a very large share, and resellers can earn more margin,” he said.

Margin Max would award more percentage points to resellers for box upgrades. For example, a $799 PC with a $110 CPU upgrade would get one percentage point on top of the usual amount.

The extra points would be awarded incrementally, so resellers would get more with every upgrade. Potentially, margins could double or even treble on a name brand with full warranty, Vardanega said.

Acer’s e-commerce system was indispensable to the scheme.

“No other vendor can do this the way we can. We have something like 50,000 active part numbers [on the system],” Vardanega said. “Most vendors are offering only standard Stock Keeping Units (SKUs).”