Motor vehicle dealers may be struggling at the moment because of the tighter credit environment, but at least their products become progressively more expensive over time. Resellers of IT, on the other hand, need to cope with prices that drop continuously. That's good for the consumer but bad for the resellers, who bring the vast majority of those products to our desks. In addition to thin margins, resellers are still suffering from the crash of the Siltek Group in October 2001 when subsidiary Siltek Distribution Dynamics (SDD) was bankrupted almost overnight.

"Approximately R1 billion worth of credit was taken out of the channel when Siltek crashed - and it hasn't been put back," says Ron Keschner of MB Technologies.

"As a result, dealers have been forced to partner with financial providers who are unsympathetic to the unique needs of the technology reseller." Keschner's words "unique" and "unsympathetic" are both understatements. The technology dealer sits near the end of a logistics chain that is incredibly price-sensitive, prone to credit squeezes and which refreshes itself almost continually. In some ways, technology distribution is similar to supply lines in other markets. Manufacturers produce goods that are imported by distributors who then make them available to their own network of resellers - who, in turn, resell them on to customers. But the differences - and the lost confidence after Siltek - have been enough to cause a crisis in the IT channel. The cost of money, lengthy sales cycles, the need for upfront finance to purchase hardware from a distributor, slow-paying customers and the habit of financial partners to go to the channel's customers directly, have all put enormous pressure on resellers, says Keschner.