"Compaq to Eliminate Most Channel Returns", Computer Reseller News, May 4, page 5. "Compaq Computer Corp. will virtually eliminate returns from resellers beginning May 15 ..."
The article further states that DOA allowances have been cut in half and that functional units sent back as DOAs will be returned to the reseller. In short, if a reseller orders product, he owns it. If the customer returns it and it isn't defective, the reseller has one more "demo" unit to unload.
Except for the possibility of price protection (not mentioned in the article), CPQ has effectively moved to a "build to order" strategy. These actions may alienate some resellers but the issue of channel stuffing is finally over .. which, IMHO, may have contributed to the recent rise in CPQ's share price.
Craig |
