Hardware will provide small margins 'for a long time to come' - PC Retail

Hardware will provide small margins 'for a long time to come'

ITACS chairman says services are the way forward for retailers
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The PC industry will soon make most of its profit on services rather than hardware, the head of a trade association has said.

Matthew Woolley, chairman of ITACS, wrote in a blog for PCR that as hardware becomes less lucrative, so the trade will need to move more towards repairs and services.

“Where are we going to be in a few years time? Will we be sales guys or techies?” he asked. “Looking to the future, the trends are obvious. Computer ownership will continue to grow and there will be little or no margin on sales for a long time to come.”

“We have to be careful though, because some big names are trying to move into services with monthly contracts and call centres. Our advantage over them is we can do services and training face to face... We can also see how well consumers are able to understand us, as we explain and teach them something new so it doesn't happen again.”

Woolley added that, with narrowing margins on hardware, retailers must be “ruthless” with their stock purchases.

“We can’t afford to be the cash cow milked to death by vendors or disties who are eager to subsidise their new customers. If loyalty is not going to be rewarded and if our margins are not going to be protected then we have to look for the cheapest source for our products to minimise losses and focus on service and training for our profits,” he wrote.

To read Matthew Woolley’s comment in full, head to our blogs page.

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