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In-Depth: Aussie dollar climbs, distributors wary

In-Depth: Aussie dollar climbs, distributors wary

The rise of the Australian dollar has been met with caution and muffled applauses from distributors

“It’s a double-edged sword. The risk is the amount of inventory you have in the warehouse, because it came in at a lower rate and cost more,” he said. “It’s not as easy as just moving the price up with it – especially with quick movements in the exchange rate, which is not easy to read.”

Corcoran predicted it could take months for a stronger Australian dollar to be reflected in vendor price lists.

“You don’t want to have prices changing every month; it causes more issues in the market. There’s always the risk around reseller quoting. If the OEM using Australian dollars change their list prices, and then the dollar drops, it causes more problems than leaving pricing fl at.

“Even when we had the larger rallies in the value of the Australian dollar last July and August, vendors weren’t changing their price lists. Some vendors using Australian dollars will lock their prices in for up to one year.”

If Corcoran’s prediction holds true, it will be music to the ears of many distributors sourcing most of their product from OEMs. In September, ARN reported the Australian dollar’s continued drop created costing headaches and price hikes from a number of vendors such as Cisco, Acer, IBM and HP.

“As for the Aussie directly impacting on what we do, not really other than maybe OEM partners we deal with will have price revisions down after they have just had significant price revisions up,” Phoenix Toner general manager, Don Bentley, said. “But I have to tell you, I hope they don’t.”

The cost revisions created by the recent wild downward trajectory is a considerable burden many distributors would rather not have to relive in the short-term.

“When you have $5 million in stock, then suddenly have to start re-evaluating your stock based on increases, and then all of a sudden vendors announce it will be moving by 11 per cent this month, and another 5 next month, it is pretty tough trying to keep up,” Bentley said.


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