The global supply chain shortage is an opportunity for partners to increase their margins, according to Canalys CEO Steve Brazier.
Speaking at the analyst firm’s annual Channels Forum event, Brazier declared that there is a silver lining for the channel amidst the current global supply crisis.
“For the channel, what does supply shortages mean? Well, it might mean you can't invoice an order at the end of your monthly report and miss your target, I guess that's bad news. But it also means a whole lot of good news because with supply shortages, prices go up,” he said during his keynote speech.
“With supply shortages, you change the conversation with your customer from ‘Which product is cheaper?’ to ‘Which product can I deliver first?’ You can also go to the customer and say, ‘You may want to stick with buying that brand but there might be a six-month delay, have you considered an alternative brand?’ – and that choice creates margins.
“There is no doubt that one of the reasons why the channel is doing very well right now is shortages. We predict shortages will continue for at least the next 12 months, and most likely well into 2023”
The semiconductor shortage – which pre-dates the current crisis by several years – remains exacerbated by the relentless innovation of the IT industry but is also feeling the pressure from other industries that have become more reliant on technology, Brazier continued, adding that this situation is proving the value of distribution’s role in the channel.
“Supply chain is suddenly a key differentiator for everybody; for the channel partners how do you get to the customer? Can you meet the commitments you've made? For the vendors, have you procured enough components? How much inventory do you stock? More than in the past? And can you deliver that down the chain?” he declared
