Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Min Park with Goldman Sachs. Please go ahead with your question.
Min Park – Goldman Sachs
Great, thank you. Just a couple of questions please, first can you just tell us how much of a shortfall in your Americas business is due to Tech Data walking away from non-competitive deals versus the overall softness in demand?
Bob Dutkowsky
Well, I mentioned just two specific examples in just two accounts where we walked away from around $100 million in sales. And so, we continue to be focused on where the profit opportunities exist and the price competitively, but we're not going to follow our competitors in some of the deals that they chase.
Min Park – Goldman Sachs
Okay, great. And then with respect to passing of freight costs to your customers, what gives you the confidence that you'll be able to pass on this cost while competitors remain more aggressive on pricing on core products and services?
Bob Dutkowsky
Well, I think first of all, as we tried to say that the idea of passing along freight to our customers is not unique to the IT industry – the IT distribution industry. In fact, the uniqueness of our industry is that we – this industry hasn't passed freight on to their customers. And so, this migration – the passing handling fees on to the customer, we think is a good thing. If you think about the opportunity here, we've added a handling fee to the orders and what that allows our customers to do is consolidate their orders together, place larger orders on Tech Data, and larger orders may cost more efficient. And so, although this is a – it could appear to be a slight price increase for customers, if customers consolidate their business together, place bigger orders on us, they win and we win. So, we think we positioned the freight increase in a way that the customer wins, Tech Data wins, and the overall IT industry gets stronger.
Min Park – Goldman Sachs
Okay, thank you.
Operator
Our next question comes from the line of Brian Alexander with Raymond James. Please go ahead with your question.
Brian Alexander – Raymond James
Thanks. I guess I'll pick up on the last topic on the freight initiative, Bob and Jeff. Do you view your initiative here as similar to what your competitors are doing or have you taken a different approach? For example, is the handling fee a unique twist that you think Tech Data is doing that others aren’t? And more importantly, if the industry is successful, how much should this help your operating margin, or is this more of an initiative to prevent additional margin pressure down the road?
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