Pricing

Product Lead Times Lengthen – and Prices Increase

The widely reported problems in technology Supply Chains have hit the Information Technology industry particularly hard. The lead time for chips and other components has more than doubled from Q4 in 2020 to Q4 in 2021. These shortages, combined with supply chain friction and additional increased shipping costs, have lengthened lead times for IT equipment to levels never before seen. Correspondingly, they have also caused IT equipment makers and distributors to increase pricing.

Cisco can be used as a bellwether for the broader IT industry. During its August 2021 earnings call with analysts. Cisco’s CFO Scott Herren said: “…we continue to manage through supply chain constraints seen industrywide due to component shortages…”.

Eric Hanselman, a principal research analyst for Pipeline Research at 451 Research (part of S&P Global Market Intelligence), discussed industry price increases in October 2021: “It’s a trend that we see across technology broadly. If you look at both availability and then raw costs – shipping costs have increased dramatically, component costs are also increasing because of limited supply.”

Solutions II works directly with all of the major IT vendors and uses multiple Distribution Sources. We work closely with our clients with constant communication, clarity, and collaboration to secure the shortest lead times and optimal pricing.

Warranties are often overlooked as a repository of pre-paid yet unrealized cash expenditures for unused support. As equipment is refreshed, upgraded and/or taken out of productive use, a refund or credit might be available to the end-user. Depending on the manufacturer, upgrades to an IT environment initiates a refund owed to the end-user by the manufacturer. We make sure that these refunds flow back to the qualified end-user. Ensuring a smooth transition from warranty to post-warranty also provides savings making certain that there is no lapse in coverage resulting in late fees etc.