::FAQ

1. What, in a nutshell, is AccessChannel?
   
   
2. What is the relationship between AccessChannel and the manufacturer?
   
   
3. How exactly do manufacturers gain exposure to the channel?
   
   
4. Do manufacturers get a direct relationship with Ingram Micro through AccessChannel?
   
   
5. What then is the relationship between AccessChannel and Ingram Micro?
   
   
6. How can manufacturers begin participating in the AccessChannel program?
   
   
7. Why wouldn't the manufacturer just go direct to Ingram Micro or resellers?
   
   
8. Is this model applicable to manufacturers already existing on Ingram Micro's line card or is it just intended to service new vendor additions? How does AccessChannel make money?
   
   
9. What does AccessChannel charge Ingram Micro?
   
   
10. How does the market understand these manufacturers are available?
    
    
11. Who generates demand in this model?
    
    
12. Do manufacturers give away the opportunity for deals and rebates through this model?
    
    
13. Where are the efficiencies and cost savings under the program?
    
    
14. How is AccessChannel resourced?
    
    
15. How long would it take to set up a customer under the AccessChannel model?
    
    
16. What are the additional risks for manufacturers in this model?
    

1.What, in a nutshell, is AccessChannel?
AccessChannel is a service for manufacturers with great products who need to reach the thousands of VARs, resellers and retailers who only buy from Distribution, but are not able to qualify for a traditional direct relationship with a Tier-I distributor.

2.What is the relationship between AccessChannel and the manufacturer? AccessChannel provides fee based account relationship and inventory management services including warehousing, transportation, logistics, returns processing, accounting and information services. AccessChannel is the gateway to distribution through which manufacturers gain exposure to the channel.

3.How exactly do manufacturers gain exposure to the channel?
AccessChannel has established a relationship with Ingram Micro, the world's largest distributor of technology products and services. Manufacturers participating in the AccessChannel program are automatically included in the Ingram Micro catalog and their products are made available for Ingram's 40,000 customers to order through electronic tools or Ingram's telesales team. Customer segments include Direct Marketers, Corporate Resellers, VARs, Internet Resellers and Brick & Mortar Retailers.

4.Do manufacturers get a direct relationship with Ingram Micro through AccessChannel?
Yes.

5.What then is the relationship between AccessChannel and Ingram Micro?
AccessChannel provides aggregated outsourced relationship management, logistics, inventory management and financial services for Ingram Micro on a tier of manufacturers who are ineligible for a traditional distribution relationship, but represent technology solutions demanded by Ingram's customers.

6.How can manufacturers begin participating in the AccessChannel program?
Qualified manufacturers will sign a Master Services Agreement and Credit Application with AccessChannel, as well as a pre-negotiated Distribution Agreement with Ingram Micro. Once these documents are executed, AccessChannel will work with the manufacturers to upload their product information into the system, bring the appropriate inventory level into the logistics center and set up the daily operational processes. It will take approximately ten (10) days to get fully functional.

7.Why wouldn't the manufacturer just go direct to Ingram Micro or resellers?
The vendors engaged by AccessChannel are new emerging manufacturers and publishers who have compelling products, but are unable individually to pass the economic hurdles established by Tier I distributors such as Ingram Micro, for a direct relationship. Resellers rarely carry direct relationships themselves and in most cases, seek to consolidate their purchases, gain product information, marketing and technical assistance through the Tier I distributors.

8.Is this model applicable to manufacturers already existing on Ingram Micro's line card or is it just intended to service new vendor additions?
The model works very well for manufacturers needing to transition off a traditional distribution relationship as well. Ingram Micro and other Tier I distributors are rationalizing their catalogs and manufacturers not providing sufficient contribution margin may be in jeopardy of being terminated or, at the very least, required to transition to a more profitable operating model. Prior to AccessChannel, transition options were very limited and very expensive for the manufacturer. AccessChannel enables Ingram to continue to service customer requirements for existing manufacturers under a materially improved cost model.

9.How does AccessChannel make money?
AccessChannel invoices manufacturers a setup fee and a monthly logistics fee that is based upon the services the manufacturer has contracted with AccessChannel to provide.

10.What does AccessChannel charge Ingram Micro?
Nothing. AccessChannel bills the manufacturer and therefore benefits by increasing the number of manufacturers and transactions that run across its model. The model is attractive to Ingram Micro since they reap the benefit of sales and margin without any backroom costs or exposure. Ingram's commitment, in exchange for the financial benefits derived from this model, is to guarantee that all manufacturers participating with AccessChannel will be signed to a direct contractual relationship and that their products will be added to their catalog so resellers can order them.

11.How does the market understand these manufacturers are available? Who generates demand in this model?
Ultimately the manufacturers are responsible for generating demand for their products. To support their efforts, manufacturers participating in the AccessChannel program will gain access to the many marketing opportunities available through Ingram Micro. In addition, AccessChannel has also established partner relationships with leading companies that specialize in technology public relations, marketing, research and sales activities and are very successful in bringing products to market. These partners will customize communication, marketing and sales strategies that best fit the manufacturers' objectives and budgets. AccessChannel will qualify the manufacturers and coordinate the communication with the most appropriate marketing partner.

12.Do manufacturers give away the opportunity for deals and rebates through this model?
No. Title in this model transfers once the customer order has passed through Ingram Micro's order management and credit system and the product is shipped to the reseller. In that way, integrity in sell-through or buy-in rebate programs is maintained. The AccessChannel model does not prevent a manufacturer from cutting a deal with Ingram. There are no messy cost claims as the manufacturer retains title and control of the product cost throughout the entire process. AccessChannel does not take a cut of any potential margin that could be gained by the manufacturer or distributor whatsoever.

13.Where are the efficiencies and cost savings under the program?
Manufacturers leverage the long-term experience and relationships that AccessChannel has with Ingram Micro and are guaranteed that their products will be included in Ingram's catalog and become visible for Ingram's 40,000+ customers to order, resulting in a very low customer acquisition cost. Manufacturers retain control over their inventory and all inherent benefits of that asset until sold by Ingram. Manufacturers are not subject to inventory price protection, stock balancing, marketing co-op or forced rebate percentages. Manufacturers do not experience any order processing costs while fulfilling orders from distribution. Under the program, there is only a single bill-to/ship-to and all invoices will be consolidated and collections performed by AccessChannel. Payment will be received in forty-five (45) days and not subject to any inventory holdbacks. Product sold into Brick and Mortar Retailers are subject to additional terms and conditions including holdbacks for inventory, returns and marketing. Inventory reporting will be updated daily and provided through a password driven FTP site.

14.How is AccessChannel resourced?
AccessChannel has partnered with Ingram Micro Logistics and Propeller Inc, leading world-class logistics providers to whom it has established formal statements of work, service level agreements and the fee structure for performing the services required by AccessChannel in support of its manufacturer clients. AccessChannel has also established relationships with proven channel marketing and selling organizations those manufacturers can work with to help drive demand for their products.

15.How long would it take to set up a customer under the AccessChannel model?
Once all the appropriate agreements and credit applications are executed, manufacturers should expect that the set up should be completed within two (2) weeks, but can be expedited on a case-by-case basis as determined by customer requirements.

16.What are the additional risks for manufacturers in this model?
The inventory, which is owned by the manufacturer, will reside at an AccessChannel logistic center location. The manufacturer has the risk of providing trade credit to Ingram Micro versus any number of smaller resellers. The manufacturer also incurs some upfront costs that may not provide an adequate return if their products do not generate enough sales velocity through the model. Although these potential risks exist, the AccessChannel model provides a less risky solution from the alternatives currently utilized by emerging technology manufacturers trying to gain acceptance by resellers.