Sunday, March 25, 2012

Vendors allege partner program misuse feeds gray market problem

The abuse of vendor channel market programs -- including partner rebates and other incentives -- plays a bigger role in the sale of gray market IT gear than previously thought, according to an industry group made up of IT vendors.

Gray market resellers sell used products as new or counterfeit products as the real deal.

According to The Alliance for Gray Market and Counterfeit Abatement (AGMA), a group backed by Hewlett-Packard, Microsoft, Cisco Systems and Deloitte Development LLC, a majority of the 12 vendors surveyed think abuse of channel incentives such as special channel pricing feed the gray market.

“We’re always looking for root causes, and we found that channel incentive program abuse had a bigger impact than we thought,” said AGMA spokesman Scott Olsen. Improving partner programs, but tightening up reporting requirements, could help ease the problem.

Some VARs agreed that fine-tuning partner programs could bolster VAR-vendor relationships and keep partners on the straight and narrow.

“It might help. It’s just another form of enticement, and it does help build a better line of communication,” said David Dadian, CEO at “I can understand why vendors are trying to tighten partner programs.”


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