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Understanding IT Pricing

Company Roll Call

"For computer hardware, we usually go directly to the hardware vendor," says John Millonig, a systems consultant at CHS, a Fortune 500 company specializing in foods, grains and petroleum products. "We use a specific VAR [value-added reseller] for the majority of our other purchases." CHS does make small purchases online at CDW and locally at Office Depot and Comp USA. Most enterprises shop locally when they want to avoid shipping time, but buyers agree that the lowest prices are generally found online.

This limited-vendor buying strategy is common in IT, because people are afraid to buy from sources they don't know. Many are also befuddled by the plethora of technology purchasing and price comparison sites on the Web, which may well include fly-by-night shops operated out of somebody's basement. Better to be safe.

But the "safe" bet these days isn't always the most cost-effective. In fact, our research shows that IT departments could be paying 25 percent to 50 percent less for commonly purchased items by doing some simple Web research before making a choice. And we're not talking about buying knockoffs, used equipment or plug-compatibles, either.

What's more, buying from a previously unknown vendor doesn't have to be like sending a check into a black hole. There are many sites that can help vet retail vendors, providing reviews, feedback and customer satisfaction ratings. Although you might feel uncomfortable at the prospect of buying from an unfamiliar online seller who might not provide quality goods--or any goods at all--these "seller ratings" can tell you a lot about a potential supplier. If you follow a few simple steps, you can save your company serious money--without risking your job in the process.

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