South African technology resellers are facing renewed cash-flow pressure and finding their livelihoods more threatened than ever before, says Pierre Spies, CEO of Tarsus Technologies.
A combination of the slowdown in the technology market and the rising interest rates has created these challenges, he says.
"The slowdown in the market has meant that on the one hand, resellers are making smaller revenues, while the rising interest rates on the other hand has meant their costs are increasing," adds Spies.
He says the company`s `debtors` days` have slipped by as much as 15% since the beginning of the year. "That essentially means it`s taking the company more time to receive payment on sales to resellers than it normally would. A limited number of resellers are able to keep to their agreed-on terms and some are even finding it challenging to keep their heads above water," explains Spies.
Liquidation rates in the channel have gone up exponentially in comparison to last year and medium-sized customers are going out of business every week, he notes.
"While small resellers are making a living out of loyal relationships, larger resellers are making ends meet by leveraging their economies of scale."
However, even these resellers are feeling the pressure, he adds. "It`s clear that something has to give, since this is a problem that threatens the health and longevity of the entire channel."
According to Spies, his company is trying to solve the problem. "We believe we have found an innovative solution to dealing with our customers` cash-flow challenges. Resellers should watch this space for more information."
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