How much for that Belkin cable? Margin of 1,992%?

Brexploitation: Buyers' horror stories that followed the vote

Shock

Some "unscrupulous" tech suppliers used Brexflation in 2016 to overcharge customers with the most extreme example being a uni that coughed more than ten times the trade price for a cable.

In the wake of the EU referendum, the British pound weakened against the US dollar and many manufacturers bumped up their local sales prices to compensate or, in some cases, overcompensate for this.

The fifth annual Mercato Solutions-run KnowledgeBus IT Margins Benchmarking Study into the cost of transactional tech found that average margins paid by customers bucked the trend for the first time and actually rose in 2016, up to 18 per cent from 17.6 in the prior year.

Best procurement practice as guided by the Society of IT Managers states buyers should not pay more than a 3 per cent margin. The police, as a sector, came out on top in this study, paying on average 11 per cent for their kit.

The sector that paid the highest average margin in 2016 was the NHS, where those holding the purse strings stumped an average margin of 30 per cent.

This was followed by charities (26 per cent), utilities and consultancies (24 per cent), telecoms and fire services (21 per cent) and tied were construction, legal, oil and recruitment (19 per cent).

"The result of the [Brexit] vote certainly caused a shock to IT prices seldom seen before, and it appears to have disrupted buyers' attempt to keep supplier margin under control," said Al Nagar, head of benchmarking at KnowledgeBus.

The procurement horror stories were spread across all industries but the highest margin charged was 1,992 per cent for a Belkin 0.5m Cat 5 cable.

The next best runners were a housing association (1,589 per cent), a manufacturing firm (1,541 per cent) and a charity (1,165 per cent).

"Although there was a period of rapid inflation in the tech market, not all prices increased," added Nager. "But what we witnessed was unscrupulous suppliers taking advantage of the perception that price increases were going up across the board."

In the days, weeks and months that followed June 2016, El Reg saw price rises from Dell, Apple, HP Inc, HPE, Lenovo, Asus, Microsoft, VMware, Adobe and many others. Cisco and AWS charge punters in US dollars so their costs were linked to the currency movement of GBP.

It recently emerged that the average price of a PC in the UK had shot up 30 per cent in the 12 months from the beginning of July 2016. ®

Sponsored: The Joy and Pain of Buying IT - Have Your Say


Biting the hand that feeds IT © 1998–2017