Tally increases dealer prices by 40%

Following the hike in excise duty and service tax in the Union Budget, Tally Solutions has recently increased the prices for its ERP and accounting solutions to keep up to the market momentum.

The increase in prices has been between the range of 33.33% for end-user licenses and 40% for the dealer prices. The differential increase is estimated to cut into the pockets of the Tally channel partners pulling down their bottmline.

Although the increase in taxes and duty are being cited as the major factors for the raise, The DQ Week has learnt that Tally is shortly coming up with new or additional product features because of which the price hike was felt necessary by the ERP major.

"Tally is shortly coming up with Series B which will have extra features to it and will be able to process the data at a much faster rate", said Amit Sharma, CEO, Dyna Vision Corporation, a Master Tally Partner.

According to Tally channel partners, the vendor had sent a circular to their partners on March 15 informing them about the decision and had stated the increase to be around 17%. The raise of excise duty on the other hand was 2% and less than 1% increase in service charges.

However, some Tally partners have put into question about the vendors commitments towards its pricing and customer dedication.

"The incidence of price on the customer will result in an immediate dip in current sales and stocks may be affected. Although the price increase has been enormous, the real problem is with the stocks", said a Tally partner wishing to remain unnamed.

According to market sources, Tally had given a cut off date for its partners to return or keep old stocks (with the old MRP) and take in new packs with the revised MRP. However, a Tally partner complained that since the billing was already done for the stocks and the invoices raised, a company cannot claim to take back the inventory.

"If one already has stocks with the old MRP lying with them and the invoices raised, how can a vendor ask the partner to return the old stock and buy it back at the new increased MRP?", questioned a Tally partner on condition of anonymity.

However, according to Sharma, the impact over old stocks will not be much.

"The old stocks when deployed will automatically upgrade themselves to the new version and thus the customer will be billed in accordance to the new MRP. I think that the move to recall old stocks by Tally will help stabilise the new pricing situation as well as stabilise the MoP", he opined.

However, according to most of the Tally partners, atleast 1 month set-back for the vendor is expected.

"Any price increase is bound to have some immediate impact on the channels as well as the end-user. But I think that by 1 month, the situation will normalise as customers will also come to know about the enhanced benefits of Tally", Sharma concluded.