Local IT reseller sees slow sales during Xmas

By Lilia Guan on Jan 8, 2009 2:21 PM
Filed under Hardware

IT reseller PC Market has had a pretty quiet Christmas. It found customers were interested in forking out for a netbook, rather than a notebook.

Ming Wei, co-owner of the NSW-based IT retail store, said sales this year were a lot slower than last year and previous years.

In an exclusive interview with CRN, Wei said the business was open during the Christmas holidays, but received only a small amount of orders.

“We found that people were slowly ordering in notebooks. However this year saw a huge number of orders for netbooks, like Asus’ Eee PC, MSI’s Wind and Acer’s Aspire One,” he said.

“People don’t mind paying for a $500 machine, compared to a higher-end model at $3000-$4000.”

Wei claimed the netbooks have been selling well, since the arrival of the Eee PC, during 2008. However sales for higher end notebooks are almost non-existent.

“We are selling more lower-end machines, but not too much higher-end notebooks,” Wei said.

“I would rather see higher sales because there’s better margin.

“People aren’t willing to fork out a lot of money for a notebook, especially with the introduction of netbooks because people can surf the internet and check their email. It’s not a superfast computer but it's good enough.”

According to Wei, with cheaper gaming consoles and PC games now available on machines like Nintendo’s Wii, gaming computers were also hard to sell.

“It’s cheaper for some people to buy a gaming console rather than purchase a full a clone at around $4000-$5000,” he said.

However consumer electronic retailers fared a bit better with their sales figures during this Christmas season, claimed Wei.

“I have a feeling consumer retailers discounted a lot of things and sold products really cheaply because they wanted to get rid of things,” he said.

“At the end of the day they sacrificed margin to save on turn over. Who really
benefits from such a move?”

As for what’s coming up in the new year, Wei is a bit more optimistic about sales in 2009 as rumours swirl about Windows 7 being released towards the end of the year.

The trend during 2008 was for customers to downgrade their machines from Windows Vista to XP.

However Wei said he and his staff were convincing customers not to do that anymore.

“We are trying to convince people not to downgrade mainly because of driver issues,” he said.

“There’s no point in downgrading to XP because there are a lot more products supporting Vista coming out and there will be hassles with compatibility issues.

“There are less and less of those customers making that requesting them, most of them are now keeping to Vista.”

He said customers will be more receptive to moving away from XP when Windows 7 is released.

Wei is hopeful about the new operating system.

“Whenever you get a new operating system coming out you see a growth in sales.

“But then again, they say this year – but you never know with Microsoft,” he said.
 
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Issue: 331 | September 2014

CRN Magazine looks in-depth at the emerging issues and developments for the channel, and provides insight, analysis and strategic information to help resellers better run their businesses.