Target News

Blog February 2023: Supply, Shipping & Spinning Plates

What keeps a Purchasing department up at night? Big price changes, for a start, even when they’re going down…

I’m Martyn, Purchasing Director at Target, and I have the task of making sure we’re always buying products at the best prices. But sometimes the cost of the product isn’t the biggest issue – if we can’t get them into stock. Huge rises in freight from the Far East, and nearer to home, over the past three years, big shortages in wafers for almost every electrical item and fluctuations in crypto-mining have all had an impact. But it is improving…

In the last few months we've seen the back of the (latest) crypto bubble which has had a big impact on GPU availability for non-crypto consumers. We’re seeing the back of that now - the graphics market is largely back to normal (for the time being) but we are still seeing shortages in some motherboard chipsets, especially those for latest Gen processors. As a result, we’ve been making sure we pick up any stock we can, and working with the manufacturers in forecasting requirements so we can satisfy demand longer-term. 

One of the other big variables on product cost is shipping. To put this into context, when we booked, for example, a 40-foot container of products pre-pandemic cost us roughly £2000. Then, due to lockdowns across the World, reduced manufacturing for a time in China, the Suez Canal blockage and huge demand across the Globe for containers going everywhere, we saw these prices go up. And up. And up more.  

At one point we paid nearly £22000. £22k. For the same 40-foot container.

Wherever possible we have absorbed costs and avoided passing them on to customers, but nominal rises were inevitable across some product categories. But the good news is we are now seeing a dramatic drop in container shipping costs, so we should start to see prices drop for everyone over the coming months. 

And, of course, the general economy also has a part to play, although the IT channel does not seem to have suffered recently quite as much as, say, the car industry. We think some of this is down to how people’s attitudes and knowledge of IT has changed since the pandemic – with so much focus on getting people working from home and businesses having to adapt quickly, IT resellers became vital to everyone almost overnight. Products like piXL monitors, custom PCs designed to fit specific and general requirements depending on who was using them, peripherals, webcams and other products, continue to be very popular even now. 

Our customers also seem a little more confident after an encouraging Q4 too, despite media speculation. Whereas early 2022 was undeniably tough (people seemingly had all the IT equipment they needed from the beginning of lockdown), early 2023 is another story. Businesses have now either settled back into the office/ workplace, or into a hybrid working pattern, so they’re budgeting as such. Servers Plus is certainly seeing this as they get more and more enquiries and sales from small and medium-sized business, government agencies, and the education sector. 

The brands we offer have also had a big impact – with the successes of piXL, Marvo and Ubiquiti, we’ve had to change how we buy, what we buy and how much we buy. Lead times for large quantities of products and ranges are significantly longer than smaller quantities, but it does offer the economy of scale – we buy more, we pay less per unit, resellers pay less, the consumer pays less. But it does mean planning months ahead and, in some cases, taking a ‘punt’ based on intelligence we’ve gathered over the past 25 years. 

There are challenges, of course, including sporadic availability of some Ubiquiti lines, but we have made inroads into addressing them, with ranges from TP-Link (Omada) and HP (Aruba Instant On) being popular alternative eco-systems. But Ubiquiti continues to be an extremely popular brand, as does Adata, a memory and storage brand we launched in September that has performed very well across a very wide range of customers. 

And we have more brand launches in the pipeline in 2023 – we’ll announce them as soon as stock is physically available, so you’re going to have to keep checking back. If there are other product and brands you want us to stock, please tell us. You can speak to your Target/ Servers Plus Account Manager or complete a Product Request form on the website – any and all of your feedback is read, discussed and acted on, even if we end up not being able to fulfil your request.  

We mean that. 

In fact, brands like Marvo, prevo and piXL were borne from this feedback and they’re now being stocked by thousands of resellers across the UK. So, we DO listen… 

And finally, I just want to say a big thanks to the Target Purchasing Team. We spin a lot of plates all of the time, which is how we like it, but they all do an amazing job in keeping thousands of products available and bringing in new and exciting ones. They have a vast knowledge of the products we sell and an unphased enthusiasm for what they do, even when it feels like they’re up against it. 2023 will be as exciting as ever in the IT industry with new challenges and opportunities and the Purchasing Team works extremely hard to absorb as much of the craziness as possible.

Martyn Kirby

Purchasing Director