Well played, but I'm genuinely not understanding why Intel would do this. If there's consumer demand for their SSDs at 15% off list (as you experimentally demonstrated), why would Intel run a distributor promo that offers 90% (what!) off the even lower disty price? Did somebody just have a KPI of units shifted to hit?
Because "The Channel' sales model provides all sorts of strange incentives from vendor reps through to end users. Everyone is playing everyone off everyone.
Lets say there's two solutions that would solve my end users problem equally well. Both have list prices of 10K, both have normal disty cost of 7K, but brand X is running a promo where I get a 50% off front end discount from disty, but brand y is not.
Now I call the customer up and let them know that not only is brand X the best solution, but because of my great relationship with brand x I've secured them a 20% discount off list.
So now the customer is getting what they need cheaper and I've got more margin in the deal, which is what my commision is calculated out of.
So essentially when vendors do this they're not trying to make things cheaper for the customer to increase demand, they're trying to make sure that their products put the most money in sales people's pockets so that sales people will push their stuff the hardest.
Though on this specific occasion I was following the letter (or lack thereof) of the promotion, but certainly not the spirit. Grabbing existing demand vs generating new demand.
The entire purpose is so that they can juice up the numbers for when they announce quarterly numbers.
For the kind of executives that stay at a company like Intel, the only thing they care about is the company’s stock price, and they’ll do anything to keep it high, even if it’s at the expense of what quite literally is destroying or directly hemorrhaging in the long term to the company itself. It’s how you end up with crazy situations like this.
I actually got scolded by the Intel rep for this one. Mostly she was mad that there was no way they'd let a loophole like the one I abused go through again next year, so her YoY numbers were gonna be awful.
