Attractive Margins
Our attractive margins are sustained over time by providing a range of services to our customers which they value and are therefore prepared to pay a premium for. Such services fall broadly into three categories - customer service, technical support and value adding activities.
Customer service can be for example the delivery of products held in inventory on a next day basis. Technical support is often provided by helping customers design the products into their specific applications. Value adding activities are services such as kitting or assembly, which the customers would have to pay someone else to provide, or they would have to invest in their own resources.
If real value is not provided, margins will erode over time. The evidence that we are delivering value lies in our gross margins which in specific product/market segments are very stable over time. Movements in gross margin principally arise due to changes in the mix of business or short term currency movements.
