Computer hardware distributors under pressure from volatile rand

[Dolby]

I think that is overly simplified if I may say so

Then how do you think it works that ROE isn't an issue ?

Whether you book for 1 , 3 or 6 months - you're booking for a different ROE each time . Forwrd cover is mitigation - but it doesn't eradiicate challenges from a rate fluctuation totally. And it has it's own issues - like if the rate goes down in that time? Or there's a delay on your items that you've promised to pay 1 November?

 

[Dolby]

@TheMightyQuin

The below are an hour later and they've dropped.

A 3 month forward cover was R19.03 and now R18.99 .

 

[Dolby]

1. Companies will forecast their foreign purchases for a specific period. They will enter into an agreement to buy $ at a specific rate on a specific date

Correct - but it doesn't mean that the ROE is going to be a non issue. ROE is still going to be an issue in a market like ours - and there are challenges :

* The rate decreases or is at least lower than the agreed rate. In other words, I've agreed to pay R19.00 - but now it's R18.70 ... and I 'lose' on that tranaction . Something tell me MyBB will not be happy in that case either ... so it's really a lose/lose. You can't keep everyone happy all the time .

2. They also arrange payment terms with their suppliers. I.e. try to match payment dates with 1. above to try to remove the volatility in the exchange rate.

Correct - key word ... try.

There are occasions that items are delayed over and over - especially in Covid with chipset shortages. And you have very few options avaliable to you

My point is forward cover is one the mechanisms used to help 'iron' out the RoE - but it doesn't get rid of the issue altogether.

 

[TheMightyQuin]

Then how do you think it works that ROE isn't an issue ?

Whether you book for 1 , 3 or 6 months - you're booking for a different ROE each time . Forwrd cover is mitigation - but it doesn't eradiicate challenges from a rate fluctuation totally. And it has it's own issues - like if the rate goes down in that time? Or there's a delay on your items that you've promised to pay 1 November?

View attachment 1722389

Are you just looking for an argument here?

'Cos we all know how that works on the internet...and I am really NOT interested, as it would be pointless.

And the reason I ask is that you went really quickly from

What is forward cover?

to being an "expert" on the matter...

 

[Dolby]

Are you just looking for an argument here?

Sorry I thought it was a discussion?
Are you getting upset because you don't have the answers?
Or maybe you assumed too much?
Or what exactly is bothering you?

 

[TheMightyQuin]

@TheMightyQuin

The below are an hour later and they've dropped.

A 3 month forward cover was R19.03 and now R18.99 .


View attachment 1722397

Oooff...I wonder if that R0.04 would not be absorbed by the rather big margins they ALSO operate with?

Or as mentioned before, merely passed onto the consumer with an immediate R1.50 price increase?

Forward Cover is NOT the only way these distro's protect themselves.

 

[Dolby]

Oooff...I wonder if that R0.04 would not be absorbed by the rather big margins they ALSO operate with?

Ah - we're getting somewhere.

So earlier you said ROWE makes no difference - but now you feel it should be absorbed?
Is that because it's 4c ? What if it was R1.00 ? Is there a limit to where it should be absorbed?

 

[TheMightyQuin]

Sorry I thought it was a discussion?
Are you getting upset because you don't have the answers?
Or maybe you assumed too much?
Or what exactly is bothering you?

Yep...here we go. As predicted.

It is a discussion.
The "getting upset" comment just shows your intent.
I assumed nothing...I have 22 years of experience in buying from distro's.
You asking "what is forward cover?" and then 3 posts later being an expert and telling everybody else they're wrong, will "bother" anyone.

But I have had my run ins with you before...it always degrades into this BS.

 

[TheMightyQuin]

Ah - we're getting somewhere.

So earlier you said ROWE makes no difference - but now you feel it should be absorbed?
Is that because it's 4c ? What if it was R1.00 ? Is there a limit to where it should be absorbed?

Keep cherry picking my responses, since that makes you feel knowledgeable. Keep ignoring everything else I posted too...that way you will be "right" and I will be "wrong".

Why do I even bother?

 

[Dolby]

Yep...here we go. As predicted

What was predicted ?

I assumed nothing...I have 22 years of experience in buying from distro's.

Oh - buying from them? Like a customer?
You've never actually been involved with one?

You asking "what is forward cover?" and then 3 posts later being an expert

So you're unhappy in the time it took for me to read your link & ask you a question?
If I ask you tomorrow, will it be ok? Or just let me know what a reasonable time frame is

and telling everybody else they're wrong, will "bother" anyone

I just really asked ... you could just answer if you know, or not ?

it always degrades into this BS.

I think it degreades when you're challenged and you don't have the answers

 

[Dolby]

I'm sorry I upset you .

Let's rather stick the quote below because you're a buyer & know how they operate .

The ROE has zero NEGATIVE impact on them...

 

[TheMightyQuin]

Oh - buying from them? Like a customer?
You've never actually been involved with one?

When you spend an average of R4bar per month with a distro and sit in meetings with their FD and my client's FD on a regular basis, negotiating pricing etc. you are not just a buyer.

So you're unhappy in the time it took for me to read your link & ask you a question?
If I ask you tomorrow, will it be ok? Or just let me know what a reasonable time frame is

Not sure what you're trying to achieve here.

I just really asked ... you could just answer if you know, or not ?

No you did not just ask...you went from "what is forward cover?" to "you're just wrong" based on some graphs and imaginary scenarios that makes zero sense in the real world.

I think it degreades when you're challenged and you don't have the answers

I do have answers, but you just don't like them and refuse to accept/understand them.[/QUOTE]

 

[TheMightyQuin]

I'm sorry I upset you .

Let's rather stick the quote below because you're a buyer & know how they operate .

You couldn't in a million years...not for lack of trying though.

 

[Dolby]

When you spend an average of R4b per month

Whew -Almost R50bn a year.

You must know so much - and it really does show ...

 

[TheMightyQuin]

I'm sorry I upset you .

Let's rather stick the quote below because you're a buyer & know how they operate .

If you think distributors LOSE money 'cos of the ROE, you're either a moron or just extremely obtuse.

 

[capd]

I was shocked a few years ago when I saw that a distributor beginning with S pays R8 for 4GB DDR4 SODIMMs. R15 for 8GB LOL.

 

[TheMightyQuin]

Whew -Almost R50bn a year.

You must know so much - and it really does show ...

Wow, your really are committed here aren't you....feverishly waiting to pounce om my next post?

My b typo instead of typing bar, made you really happy I see. Again stop being so petty, it's tedious as fuk tbh.

And here I am ...embroiled in another pointless MyBB argument...with a instant FC expert no less.

As I said: how predictable.

 

[Dolby]

If you think distributors LOSE money 'cos of the ROE, you're either a moron or just extremely obtuse.

Have you noticed how quickly you turn to personal insults, quoting how much you spend & how much you know more than everyone else?
What is that about any way ?

 

[Dolby]

.

I actually ASKED you how it worked.

And then apparantly, I commented too soon for you ?
Because there is a time limit ?
I offered to ask you tomorrow rather?

I look at the posts in think 'who hurt you so much?'

 

[TheMightyQuin]

Have you noticed how quickly you turn to personal insults, quoting how much you spend & how much you know more than everyone else?
What is that about any way ?

Oh dear...are YOU now OK?

See how silly you sound?

You tell me I know nothing about how distro's operate.
I tell you that I actually DO know and explain why I know.
You take that and twist it around to suit your silly little agenda here.

I don't know more "than everybody else"....just you.