Ingram Micro 2013 Annual Report Download - page 7

Table of Contents
• (targeted marketing activities including direct mail, external media advertising, telemarketing campaigns, national and regional
trade shows, web-based marketing);
• (electronic data interchange- ( or EDI-), extensible markup language- (or XML-) and web-based electronic links to reseller
customers to enable electronic transactions), e-commerce fulfillment services;
• (help desk services, remote infrastructure management, hosting services,
security services, business continuity and domain name management);
•(communication and collaboration services, security services, infrastructure
services, business applications and platform services, cloud management services);
•(automatic supplies replenishment, remote printer maintenance monitoring, help desk, equipment lease options);
•(IT staffing solutions, warranty services, virtualization and wireless assessment, search engine optimization and web
design); and
•procurement, inventory management, software loading, kitting and customized packaging, fulfillment, credit services,
receivables management, call center services, activation services, website hosting, e-fulfillment solutions, repair, refurbish and recycle services,
reverse logistics, transportation management, sale of prepaid airtime).
Although services continue to represent one of the key components of our long-term strategy and can drive a disproportionate share of profits related to
revenue contribution, they represented less than 10% of our annual revenues in 2013.
Who Our Suppliers Are
We sell the products of approximately 1,400 suppliers, which represent most of the world’s leading computer hardware, networking equipment,
mobility, AIDC/POS, and CE manufacturers and software publishers. Products purchased from HP generated approximately 15%, 18%, and 21% of our
consolidated net sales in fiscal years 2013, 2012 and 2011, respectively and products purchased from Apple Inc. generated approximately 10% of our
consolidated net sales in 2012. There were no other vendors that represented 10% or more of our net sales in any of the last three years. The year-over-year
decreases in products purchased from these vendors, as a percentage of net sales, for the periods discussed above reflects the higher mix of products
purchased from other vendors as a result of changes in the market in general and our acquisition of BrightPoint which does not have significant products
purchased from these vendors.
Our suppliers generally provide warranties on the products we distribute and allow returns of defective products, including those returned to us by our
customers. We generally do not independently provide warranties on the products we distribute; however, local laws may impose warranty obligations upon
distributors (such as in the case of supplier liquidation). In certain markets we administer extended warranty programs, supported by a third party, on
supplier products. We provide warranty services for products that we build to order from components purchased from other sources. Provision for estimated
warranty costs is recorded at the time of sale and periodically adjusted to reflect actual experience. Historically, warranty expense has not been material.
We have written distribution agreements with many of our suppliers and these agreements usually provide for nonexclusive distribution rights and often
include territorial restrictions that limit the countries in which we may distribute the products. Some of our agreements with our suppliers may contain
limitations of liability to our suppliers’ obligations and warranties. The agreements also are generally short-term, subject to periodic renewal, and often contain
provisions permitting termination by either party without cause upon relatively short notice. Certain distribution agreements either require (at our option) or
allow for the repurchase of inventory upon termination of the agreement. In cases where suppliers are not obligated to accept inventory returns upon
termination, some suppliers will nevertheless elect to repurchase the inventory while other suppliers will assist with either liquidation or resale of the inventory.
Who Our Competitors Are
Each geographic region in which we operate (North America, Europe, Asia-Pacific and Latin America) is highly competitive. Competitive factors vary in
importance with the type of product, service or solution offered. In addition to pricing, other competitive factors include:
•ability to tailor specific solutions to customer needs;
•availability of technical and product information;
•effectiveness of information systems;
•credit terms and availability;
•effectiveness of sales and marketing programs;
•products and services availability;
•quality and breadth of product lines and services;
•speed and accuracy of delivery;
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