Tougher to Stay on the Shelf
Distributors are cutting unprofitable products.Its getting increasingly difficult for second- and third-tier component vendors to stay alive. Both Tech Data and Ingram Micro, the only healthy mass distributors, have been systematically slicing out product lines to make room in their warehouses for newer technologies. Over the past year, both distributors have cut hundreds of vendors from their line cards because they dont sell enough volume, their margins arent high enough, or the cost of doing business with them is too high.
"Were looking at every product, from cables to memory," says Elio Levy, senior VP of marketing at Tech Data. "We dont need to carry six brands of cable, so we look at the ones that are less profitable, give them time to fix the situation, or we cut them."