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Like 1945 Hiroshima which received the Little Boy nuclear weapon (pictured right) all the DEA/HIs who have been working for the SAVA BX received a bombshell tonight as SAVA BX announced a significant fee cut from 50 to 40 per EPC (they still pay lodgement so its around 46 equivalent to other work providers).

Quite what the fallout of this announcement will be remains to be seen, plenty of DEA/HIs are sure to be upset and withdraw their labour from SAVA BX.

Quite who pulled the strings on this commercial decision will of course remain quite private. The Business Exchange (BX) is a joint venture between Simply and SAVA so the decision must have made with joint agreement, even if one forced the other ones hand. Interestingly, I would wager that Simply would have been doing the forcing, they could choose to source their EPCs elsewhere for less if the charge-out fee from SAVA BX did not reduce by an appropriate amount. Who are winners? Well Vibrant, ERS and Chris Rodgers seem obvious beneficiaries. This industry continues to implode and the wise advice at the moment to anyone involved is to walk away, the messy business will continue for some time to come.

This is purely my personal opinion, but here are the issues as I see them:

1. Simply don't have the market share they would like, their conveyancing costs are simply too high for a 'conveyancing factory' solution when compared with others like LMS and ehips

2. BX did not get the volumes it should have done, maybe it was pricing, maybe it was other major pack providers not prepared to effectively put money in a competitors pockets, the competitor being SimplyHIP who would earn off the back of the EPC panel work thru BX

3. Losing Tony Rinaldi to Vibrant. I have only met Tony twice, and he probably doesn't remember me as it wasn't for long, and he was a busy chap, but this chap was around since year dot, had major connections in the industry and I'd be amazed if he had a lock-out period to his BX contract preventing working him in the industry, other than possible being on gardening leave for 3 months.

4. The rise of Chris Rodgers/Vibrant- these non pack providers have scurried round hoovering up work whereever they can get it, 'win at all costs'. I am less certain over the funding behind Vibrant, but there is no lack of investment at Chris Rodgers as they have a long trading history in allied trades.

The leading forum is full of comment about this announcement tonight, will it be tomorrow fish'n'chip wrappers or will it be the final nail in the coffin for many DEA/HIs who were already hanging on by their fingertips.

Labels: SAVA BX announced a significant fee cut from £50 to £40 per EPC Vibrant ERS Chris Rodgers Tony Rinaldi