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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."
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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..
geek page at KY speaks
I've noticed that Dell seems to be shifting away from customizability and towards mass production of more standardized models. Their most "value" -priced desktop model is all but unconfigureable.
Mod me down, and I will become more powerful than you can possibly imagine!
My first PC was a dell dimension 386 SX-25 with 2MB RAM bought back around 1992/1993.. and it was bought at a Price Club.. now known as CostCo. So I'm not sure that statement is entirely accurate..
You crazy man? You piss off supahfly!
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!
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...
Blog Prophyts - Right On, Man
I've seen their machines at Staples, though years ago. But the fact of the matter is that their not selling to any dealers. Only dealers "who serve businesses with 100 employees or fewer." So don't count on seeing an unbranded Dell at the local PC shop anytime soon.
My guess is these white box specials will come without Dell technical support and will sell at a lower price, all the while helping Dell get penetration into small to medium sized businesses. The consultants that service these companies often opt for generic machines so they can make a couple bucks. After all, you can't buy a pricey Dell and mark it up. This move from Dell basically allows the consultants to acquire Dell's at dealer pricing, as long as they provide the technical expertise when typical problems arise. It's less problematic than cobbling together poorly tested combinations of generic parts and there is still a profit to be made. A good move on Dell's part if you ask me.
If he ever gets fed up with that evil free software, he can install Windows on that machine and not worry about licenses. He already bought one! How convenient huh?
Oh, and writing the name of my company with a dollar sign instead of an 's' is childish. Give it a rest. That's old already.
Sincerely,
William Henry Gates III,
Microsoft Chairman and Chief Software Architect.
Will they still use all their freaky proprietary connectors I've seen in some models? That would raise the cost of any retailer trying to support the machine. It's little things like a drive bay just a little too thin in width or a power/everybutton connection to the mobo. That's what got me out of manufactured PC's years ago.
Also, "Steven" and I were in the same class in high school. He's a nice guy, a bit goofy at times, but all in all ok. It's funny working in a world where people crack on him as an icon. I'm as annoyed by his character as the rest of us, maybe a little more. I hate anyone that acts like an idiot constantly. But way to go... If I could fall ass backwards into an ad campaign like that I'd love it. Go Dude Go!
I've found Dell service to range from the great to the appalling; sometimes within the same month.
A couple of years ago, I bought 50 PCs from Dell. 49 worked as expected, one had a dodgy video card (three bluescreened ('98) straight away, but that's a different story). They refused to send out a new one for ages; first of all insisting I perform a bunch of patently unnecessary diagnostics & reinstalls, then stalling me, then losing my details, then, weeks later, sending out a new card.
On another occasion, I rang about a fucked hard disk (under warranty), and they had a guy around the same day with a replacement.
Before you all berate me about my intolerance of helpdesk foibles, let me assure you I'm sympathetic. Having techsupported in the past, I'm fully aware that everyone who rings a helpdesk is a lying bastard. But really: who in their right mind insists on an OS reinstall when the machine's failing in the POST?
My guess is that they can sell it cheaper as a no name item since they do not have to handle:
1) Tech Support. This includes web/phone/email etc.
2) Advertising [this alone would be around %3-%5 of a machines cost AT LEAST...
3) R&D wrt design and "dell" labeled cds/manuals/etc... [they dont have to reprint the OEM manual with their own logo] and still use essentially the same parts.
4) This could also be a way to get around certain restrictive licensing agreements that Dell has... [ie: if the machine has the name "Dell" on it they may have to pay some company something to license something else.. weather its software/bios/whatever]
All the above could EASILY make a PC %20-%30 cheaper for the end user...
--
Time is on my side
My most recent example...at home, my Dell monitor gave out--flicking and being all blurry on me. I had my wife (who's not really a super-technical person) call up the next day when I was at work...
Basically, they said the monitor line was defective, I was still under warrenty (bought the computer 2 1/2 years ago with a 3 year warrenty), and they would send a new one within 2-3 business days. (This was on a Thursday, by the way.)
Great! I totally didn't expect them to do jack, especially not replace my monitor that quickly.
So...what do they do? Monitor on my doorstep via Airborne Express at 11am THE NEXT MORNING.
Yes, they overnighted me a new monitor when I was in year 2 1/2 of the most basic warrenty--all when they made no promises to me any sooner than 2-3 business days. (Meaning Tuesday or Wednesday the next week. Obvously, I wasn't thrilled about having no monitor for 5 days.)
So, in my experience, Dell's service is outstanding. They get a big thumbs up from me.
-Jayde
What's a sig?
What ever you do don't go through Dell Financial Services. My experience with them was so bad that I will gladly waste karma and time to tell people.
Some things:
1. I received a rude bill for $.05(no kidding)
2. I was called numerous time after I paid off my entire bill saying I better pay or they would report me.
3. One time I received a call asking me if I had the decency to return their calls.(After I already had)
4. If you paid more than the monthly bill it would screw everything up on their end.
5. Can't pay a bill on their web site, and they make it nearly impossible to pay over the phone.
They are so bad I almost think they do it on purpose to squeeze out more money from "customers".
If anyone has any info I would like to hear it.
"The Boston Globe reports that Dell, which has heretofore sold only through its website, direct to consumers"
This is incorrect. Dell did experiment with selling their PCs through retailers. I know, because in around 1991, I bought a Dell 486/50 from CompUSA.
I remember the first time I saw a Dell computer. Being from Austin, I took a tour of the Dell facilities when I was in high school, and even met Michael Dell. That was in 1990? 1991? But the first one I saw for sale was in a department store in Toulon, France in 1993 or 1994. I probably would not have taken note if I hadn't been on the tour...
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So you are from Chattanooga, TN?
"Da ist ein Technölüst in mein Unterpanten!"