GE Access clamps down on RMA & grey market

Keystone, Colo. – With the release of a new upgrade program for Sun resellers, GE Access said it expects to grow its percentage of Sun Microsystems upgrade purchases and reduce the number of Sun upgrades sold on the grey market in Canada.

Called Preferred Upgrade Program, resellers

will now be able to earn rewards through Sun’s Upgrade Advantage Program (UAP).

The program was launched Tuesday at this year’s 14th annual New Frontiers conference here. It attracted 1,100 attendees of which one-third were partners, one-third vendors and one-third GE Access employees.

“”We’ve worked with Sun last year in the U.S. and now we’re working with the Canadian team,”” said Frances Draper, vice-president of Sun business group at GE Access.

Last year, GE Access improved Sun’s return-rate in the U.S. on products sent back to the manufacturer. Sun has since implemented a system that tracks products by serial number, which has improved its monitoring capability, said Draper.

Under the program, resellers who return residual products on time and meet specified Sun UAP requirements will receive incentives and rewards, which will be reviewed quarterly. These include 20 per cent of resellers Sun quarterly revenue must come from UAP sales and no other outstanding non-return upgrade invoices with GE Access. Resellers can redeem these points for new products.

“”Sun has varying degrees of what comes back,”” she said. “”It’s hard to determine whether it’s the reseller or tracking system. We said resellers need to have a clean slate.””

Draper said the upgrade program presents opportunities for growth and for Sun to get out a more cohesive message. Percentage of upgrade sales is 10 times greater in the U.S. than in Canada, she added. Draper declined to attach a number to upgrade sales.

Gary Grimes, vice-president of partner management and sales at Sun, said GE Access has a “”very good”” record on return of equipment with close to 100 per cent return rate.

“”GE is anticipating those numbers will slip (in the future),”” said Grimes, describing the program as more of a carrot than a stick approach. “”In the past if resellers didn’t return product (GE Access) put their credit on hold or invoiced them for the residuals.””

UAP gives resellers a specially priced deal on products with UAP designation if they return the equipment. Grimes said Sun either scraps or refurbishes and resells the product.

“”It’s a unique program. We’re the only vendor that (gives resellers) a discount on the front end whereas the competition waits until they get the product back,”” said Grimes. He said this is a challenge to manage but noted that the competitive advantage outweighs the pitfalls. These include products not returned or those lost to the grey market.

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