Dell To Sell To Retailers

dmarx writes "The Boston Globe reports that Dell, which has heretofore sold only through its website, direct to consumers, will now sell generic computers to dealers. This marks a shift in Dell's business model."

Comments

WRONG TOPIC

[doubtless]

Dell is not selling to Retailers, no, you won't see that brand new shiny Dell in BestBuy or Circuit City. Dell is only selling 'generic computers' to dealers who in turns sell them to small businesses.

I thought true slashdotism (not reading the story) only happens to joe six packs, and no the editor..

Bad move

[seanadams.com]

As an OEM, it's hard to turn down retailers who are asking to resell your product. Basically what it boils down to is whether or not the retailers are cannibalizing your own direct sales.

Dell has made an enormous investment in proving themselves to be a good online/catalog source for PCs. Direct sales are nice - you get fatter margins (my guess is 20 to 35% for Dell) and all you have to do is stick the labels on the boxes. Compared to the cost of manufacturing a PC, the cost of sticking labels on 100 invidual boxes vs shipping one big box of 100 pcs is negligible. The sales work is completely automated now.

What Dell needs to ensure is that their retailers are reaching *new* markets - people who would not have otherwise bought a Dell. The worst case scenario is that people browse their web site to get the technical specs and pricing, and then head down to their local retailer to actually buy it. Dell still sells the same number of units, but they make $200 apiece instead of $400.

My company makes *half* as much per-unit when we ship in qty to a reseller vs direct to a customer. We want out resellers to be happy so they'll promote the product, but at the same time we miss the margins for direct sales. You can't be greedy though. Sometimes a smaller piece of a bigger pie is better. Good luck Dell!

Will Microsoft play it's hand here?

[E-Rock-23]

OK. Gotta sort this out here. If Dell sells to retailers (which will mark up the cost a bit to give them a profit, bumemr), what will Billy Boy and his gang in Redmond do? Will they adapt their license agreement (again) to force Windows onto these machines? Some retailers do sell PCs with vacant HDs, allowing for OS choice. I'm willing to bet MS won't take too kindly to that...

Or could this be a tactic to circumvent MS? If Dell sells directly to retailers, could they install another OS onto the machines (ie Linux, FreeDOS, etc)? Does MS's license cover Direct-To-Consumer PC makers adding in the retail factor? This is going to be an issue to keep an eye on...