Same Part, Same Supplier, Different Prices

linuxwrangler writes "Infoworld's "Notes From The Field column this week includes a comment from a reader who found that Dell listed several different prices for the same part. Intrigued, I grabbed the first part number I found (a 512MB memory module #A0193405) and found that the list price is $289.99 which the price offered to "large businesses". Meanwhile, the GSA/DOD contract price is $266.21 while "home users" find the list-price discounted to $275.49 and "small businesses" fare even better with a $246.49 price. InfoWorld contacted Dell who responded, "Each segment sets its own pricing, and consumers are free to pick the one that's cheapest." Buyer beware."

Comments

Marketing vs IT

[fembots]

Different pricing strategy is not wrong, but allowing anyone to buy from any section is not so smart. And I can't believe they are actually expecting customers to help themselves, instead of building a site that is smart enough to provide useful information.

I wonder why isn't Dell doing something to control the purchase upon "Add To Cart"? Something like:

"This item is only available to our spend-like-no-tomorrow customers, please enter SLNT code now to add to cart, or select an alternative item from the following..."

Maybe it's a miscommunication between marketing and IT department?

Re:Marketing vs IT

[Rei]

It's actually smart marketting. They can make a profit on the low end cost, but if they feel they can make more off of certain customers, they will.

My contacts, for example, are marketted as daily wear. However, they're the exact same contacts that the manufacturer sells as their multi-use contacts, just in a different box. For people willing to pay for the "multi-use" contacts, the company simply makes extra money. It doesn't hurt them any.

Re:Marketing vs IT

[Bill Wong]

I've known about this for a few years now, and I've always bought as a "Small Business", regardless of the resulting use of the hardware, just because it was often 10~20% cheaper.

Re:Marketing vs IT

[hedronist]

Not always, just most of the time. If you're buying a system *with* a monitor, you'll probably do better on the home/soho site. Without, start on the Small Business site. I often end up checking both, but sometimes it's a bitch trying to build identical systems.

I find Dell's quality to be generally acceptable, but it's a real PITA trying to get a decent price on exactly the system/service features I want without them suddenly adding in crap I don't want/need. Given a reasonable alternative (and, no, I don't want to build my own any more), I would change in minute. (BTW, their 3000 line of desktops is definitely a step backwards.)

I wish I felt better about HP's PC products, but their build quality just ain't what it used to be.

HP joke circa 1985: Two engineers, one hardware and one software, take an HP workstation up to the roof. Connecting a long extension cord, they boot it up and then drop it three stories to the pavement below. Running down to see the results, the hardware guy says, "Hey! It's still running!", and the software guy says, "Yeah, but it's still running HP-UX"

Re:Marketing vs IT

[Xzzy]

Small Business section also makes available some great low end poweredge machines, with no windows tax. Great machines, usually from $274 to $500.

They update their deals once weekly.. keep an eye on it until they offer something you can't resist, get a good deal.

Re:Marketing vs IT

[Pharmboy]

Actually, Dell has been doing this on systems for years, which is why I have always bought ANYTHING from them via small business. (my experience has shows that sm. biz is always cheaper anyway)

Don't mean to be cocky, but this isn't really news is it? I can't possibly be the only one that knew they have been doing this for years.

Re:Marketing vs IT

[Anonymous Coward]

Joel Spolsky wrote about this a few months ago: http://www.joelonsoftware.com/articles/CamelsandRu bberDuckies.html

he would suggest that its not a good plan to price for the market segment.

Re:Marketing vs IT

[siliconjunkie]

My contacts, for example, are marketted as daily wear. However, they're the exact same contacts that the manufacturer sells as their multi-use contacts, just in a different box. For people willing to pay for the "multi-use" contacts, the company simply makes extra money. It doesn't hurt them any.

The thing you need to be careful of is the "invisible stuff" you buy when purchasing a product. like: licences, warranties, etc...

For example, if I buy a processor from Intel in the Intel branded box, I get a warranty. If I buy the *same* processor in an "OEM" box at a discounted rate, no warranty.

This is just one example, but also consider this: You buy these "daily wear" contacts, and they have their usage guidelines printed on the side of the box. The "Multi-use" contacts may allow for the contacts to be worn under certain circumstances that differ from the "daily wear". Now, you, as consumer, save a few bucks on the "same" contacts, but use the "daily wear" in a manner than is inconsistent with their labeling and you go blind one day. You can bet your ass that the contact lens maker is going to claim that you were indeed "using their product in a manner that is inconsistent with the packaging" when you attempt to be compensated for damage to your eyes due to their product.

Just some food for thought (IANAL, however).

Re:Marketing vs IT

[unclocked]

Yeah, I bought (and subsequently sold the next day) a dimension system. Consumer price was 600, Small Business price was 499, and for large business available only as an optiplex for 1400. I thought the whole thing was funny. The reason why I sold it next day was their crappy customer support. I called twice, each time waiting 1/2 hour to talk to a human being in New Delhi who subsequently said it was not his job and transferred to other department. No need to say, it was my last purchase at Dell.

Re:Marketing vs IT

[null etc.]

One of the reasons that I've never trusted Dell is that they have "discounts" that rotate on a weekly basis. Today, this laptop might be 10% off, tomorrow, it might be 20% off, and the next week, there might not be any discount. And Dell customer service representatives are very strict about only honoring the discounts that appear that day, regardless of when you bought the product, whether you had a coupon, or when you want to upgrade.

My friend was told by a customer service representative to "wait until next week to place your order, if you think there might be a 20% discount again."

That's such a shady practice that I'll never buy Dell. I'm always afraid I'll be screwed by buying on the wrong day. How is that supposed to inspire consumer confidence?

I'm pretty sure it's not. It's more likely done to generate sales via the "OMG the sale ends tomorrow!" factor, to the millions of consumers who don't realize these discounts cycle on a weekly basis.

Re:Marketing vs IT

[nolife]

So you would feel Dell more trustworthy if they just had the higher price and left it at that? I do not see the connection to trust. I am sorry about your fear of the price potentially going down but that is retail baby. Sears puts things sale, CompUsa, Bestbuy, a car dealer, airlines, and grocery stores. No difference at all. None of those stores will offer the unit for the previous lower price after the sale is over either. About a drop after the fact? Check the winter coat rack at JcPenny next time you are at the Mall, you will see nice coats for $35 that were selling just 6 weeks ago at $150. You should buy a product for a price you feel comfortable with, not simply on hope that it will never go lower. I could understand someone not wanting to play the game and shop or wait for a better price but that has nothing to do with trust and that is not going to get you the best deal if your into that kind of thing.
Back to Dell. I got out of the white box business because of the hassles and free lifetime support I felt obligated to provide. I now refer everyone that asks to Dell now. I describe what is currently available and tell them to wait a week or so and check again if they want something different. I know a few people that have got discounts from newly lowered prices and others that have had to return the unit and then buy another one just to get the discount. Hey, if it is worth it to you, go for it.

Re:Marketing vs IT

[null etc.]

So you would feel Dell more trustworthy if they just had the higher price and left it at that?

Yes, actually. I'll lay it out real simple for you. Let's look at a few facts:

1. Dell's discounts rotate from 0% to 20%, within two weeks.
2. Thus, there a few possible types of consumers:
   • Slightly profitable consumers who buy a computer at maximum discount.
   • Moderately profitable consumers who buy a computer at a midlevel discount.
   • Hightly profitable consumers who buy a computer at no discount.
3. Furthermore, there are several subcategories of each:
   • Highly profitable consumers who don't wait for maximum discount because they don't know about the discounts, or they don't shop for price comparisons.
   • Moderately profitable consumers who don't wait for maximum discount because they think the midlevel discount will "end at any minute".
   • Highly profitable and moderately profitable consumers who don't wait for maximum discount because they need the computer immediately, due to circumstances.
   • Highly profitable and moderately profitable consumers who don't wait for maximum discount because they are impatient. These are the same people who ship everything overnight for $100 extra.
   • Highly profitable and moderately profitable consumers who don't wait for maximum discount, because the few hundred dollars savings don't mean anything to them.
   • Slightly profitable consumers who happen to buy a computer at maximum discount through sheer luck.
   • Slightly profitable consumers who wait for maximum discount before buying a computer.
4. If more consumers were aware of the tactics that Dell uses, a significantly higher percentage would wait a few days in order to save a few hundred dollars.
5. If this were to occur, consumers would only buy large quantities of computers during days of maximum discount. This means that very few consumers would buy computers during the other days, which would significantly hurt Dell's ability to move inventory.
6. Dell would therefore be forced to sell computers at maximum discount all the time, in order to keep inventory moving.
7. But clearly this doesn't happen. Why? Due to the ignorance of the consumer.

So the bottom line is that Dell has significantly higher profit margins due to the shady way in which it discounts its merchandise at the expense of the consumer, relying on the consumer's ignorance.

Do I think this reduces Dell's trusthworthiness? You better believe it.

How do you think Apple gets away with charging the same high price for its equipment, regardless of the holidays or which specific outlet the equipment is sold through? Because of intense customer loyalty (of which trustworthiness is a prerequisite.)

Your example of seasonal sales and competitive discounting does nothing to counter my argument, because Dell's rotating discounts are arbitrary. Seasonal sales and competitive discounts, on the other hand, occur to stimulate sales and encourage competition, according to the supply and demand curve (winter coats dropping in price during the summer? No kidding! Could it be due to a lack of demand?)

Gotta love Dell!

[chris09876]

That's just hilarious. I can't say I'm surprised... I've never liked Dell. They have a lot of shady practices, and it doesn't seem like they're convinced with offering the best value on hardware. Their support plans might be nice (and I'd assume that's why lots of schools/gov'ts use Dell), but that's not what I need. Heh.. dell...

Re:Gotta love Dell!

[iLL_L0gic]

Support plans might be nice? I don't know if you've had any experience from Dell, but unless your school has a few teachers from Bangalore India, I don't think you'll love the support options. For those of you that get frustrated with waiting for a half hour to talk to some grabass from India that wants you to reformat your computer, here's a few catch phrases you can study up on while you wait. chuutya = asshole tum chuutya ho = you're an asshole. gaand = ass hijda = transvestite kuttiya = bitch lund = dick lund choos = suck my dick Have fun, and keep it safe! :)

Re:Gotta love Dell!

[the unbeliever]

If you buy a gold support plan or higher, you get an American call center. At least for small business customers.

Re:Gotta love Dell!

[clymere]

Do you realize how insane it sounds that you have to pay them extra to get tech support from someone who actually speaks the same langauge as you? and I _work_ in tech support.

Re:Gotta love Dell!

[the unbeliever]

Sure it does, because at one point I had to travel to India to train my replacements. ;p

Re:Gotta love Dell!

[Large Green Mallard]

In all seriousness, some pronounciation guides for those who don't speak Hindi or Gujarati would be handy ;)

Re:Gotta love Dell!

[1u3hr]

. For those of you that get frustrated with waiting for a half hour to talk to some grabass from India that wants you to reformat your computer, here's a few catch phrases you can study up

What a racist rant, modded informative by likeminded rednecks. How about you ponder who is hiring these Indians and firing Americans? It's the white-as-the-driven-snow WASP CEOs. The Indians didn't invade and conquer the American call centers, the American companies chose to outsource to bump up their bottom line.

My Life is Dilbert

[RicJohnson]

This is nothing. Dell always has sold to the business market for more.
I found this out years ago when I had to upgrade 300+ computers. I went on to their site, found the best price for the most power, and then called up for the best bulk price
The system I picked was the Dimension, with the latest tech. But the salesman wanted me to buy the 'business optimized' OptiPlex. I pointed out that each unit was MUCH more expensive for the same power, he tried to sell me that new technology was not good for business - I should use 'proven' hardware (i.e. 1 year old chips at top prices).
I told him no thanks, please give me a price on 300+ Dimensions as I specified them.
He did give me a price, but when I went to my boss to get the check, I found out that the salesguy called him and told him to but the OptiPlex! Then my PHB believed the vendor, and I eventually got fired cuz I would not support them. (The drivers for the network card would not support the latest Windows)

Re:My Life is Dilbert

[AviLazar]

Well sorry about the loss of your job...but if your boss disagrees with you and decides to go the other route ---telling him that you will not support his choice is a surefire way to get yourself fired.

Your former boss may have made a bad call - but as his employee you gotta deal with it and when shit hits the fan, he will get in trouble for making the bad call....but by not being a "team player" you open yourself to a world of hurtin (i.e. losing your job)...unless that is what you wanted.

Re:My Life is Dilbert

[NigelJohnstone]

You can see his point though, if the drivers for the Network card don't work, no amount of pandering to the PHB will undo that bad decision.

Re:My Life is Dilbert

[riptide_dot]

The system I picked was the Dimension, with the latest tech. But the salesman wanted me to buy the 'business optimized' OptiPlex. I pointed out that each unit was MUCH more expensive for the same power, he tried to sell me that new technology was not good for business - I should use 'proven' hardware (i.e. 1 year old chips at top prices).

First, let me say that I'm not a Dell rep and I couldn't care less where people buy their computers.

However, there is such a thing as a "business optimized" PC, and I can see the value in a business paying a premium for them. Speaking as as a person who has been charge of those who support the hardware on these things, a "business optimized" PC means a PC line whose hardware components don't change very often. I wouldn't necessarily buy into the argument that I need "proven" hardware, but having a line of PCs that don't change their overall component structure can be a very good thing in terms of supportability.

Re:My Life is Dilbert

[Didion Sprague]

but by not being a "team player" you open yourself to a world of hurtin (i.e. losing your job)...unless that is what you wanted.

Teamwork on jobsites is vastly overrated. Most of the time, your teammates are assholes. And if your temmates aren't assholes, you are.

Either way, it never works.

Re:My Life is Dilbert

[Anonymous Custard]

You can see his point though, if the drivers for the Network card don't work, no amount of pandering to the PHB will undo that bad decision.

Hopefully, he would order just one machine and put it in a test environment, before buying up 300 machines.

Then, the test environment would clearly show that the version of windows used by the company does not work with the network card.

Test Condition: Connect Dell Optiplex to our network with standard company software (Windows Version XX, etc)
Result: Failed.
Reason: Dell supplied Network Interface Card not compatible with Windows Version XX.

Then, the boss could decide to:
- Order 3rd party network cards that DO work with the version of windows, and install then in the new machines
- Go for a different config altogether - maybe choose those dimensions that already have compatible network cards.

Also, Dell would probably have installed alternative network cards for a few bucks per PC.

What version of windows were you using that the network card wouldn't work?

From the part of the story you mentioned, it doesn't sound like it had to end up with you losing your job...

Re:My Life is Dilbert

[Rinikusu]

It really does depend on the situation as a whole. If my boss told me to procure new units based on whatever criteria set by whomever, and that I was responsible for said purchase, and then the boss OVERRIDES my decision without prior discussion with me (but is more than glad to discuss it with the vendor...), then I'd say you've got more serious problems at hand. You're being set-up for failure, you can't make the right decisions because someone else is going to change your decision, but ultimately they'll make the blame stick on you if the shit hits the fan. You can't be a "team player" if the coach doesn't put you in the game unless he needs someone to blame...

Re:My Life is Dilbert

[swillden]

Complete and utter bullshit.

I disagree.

PC parts are, by very nature, COTS equipment - as the military would say.

True but irrelevant.

Even if all of your 300 machines are built with COTS equipment, your support burden can be significantly increased if they're not all the *same* COTS equipment.

It's well known that when you buy very low-priced computers that you can expect to get a grab bag assortment of different components. They'll all fit together and work (most likely), but they'll have whichever video card/RAM/drive/whatever was cheapest that day -- or that hour.

I haven't personally been faced with the task of dealing with managing large numbers of machines, but I can certainly see the value in them being identical. If nothing else, that ensures that you can build a single system image and use something like Norton Ghost to replicate it out to all of the machines with no worries about needing different drivers or anything. And then there are upgrades to worry about... having identical hardware means being able to test the latest service pack on one box and being sure that it will behave pretty much the same on the rest of them.

Besides, anyone ordering as many as 300 systems sure as hell better get a support contract for them as well. Doing otherwise would be beyond foolish.

Sure, but that support contract only covers the hardware. If the user manages to screw up their system it's the company support staff that is going to have to re-install the OS, drivers and apps.

Re:My Life is Dilbert

[riptide_dot]

"Complete and utter bullshit."

What a way to inspire thoughtful and enlightened discussion...

"...I ran a small office's network (3-13 employees)..."
"...Now, while I can understand a large company's situation is definately a bit different..."

Normally I wouldn't have even responded to this, but your points are ironic, because they actually help make my case. First, a business of 3-13 employees doesn't need standardization like a large organization does - it needs dependable, easy to use, somewhat powerful PCs for competitive prices. "Business optimized" PCs don't make much sense to really small organizations.

When you get into the larger support realm however, power and individual PC price don't weigh as much in the overall support equation, but STANDARDS do. When you are deploying a new piece of software/OS/etc to 1000+ workstations, it is of TREMENDOUS benefit to the support staff to not have to worry about every one of those thousand plus workstations having different hardware configurations. So, like I said before, "business optimized" PCs are by definition:

- not supposed to be top of the line
- not necessarily the cheapest option
- usually leased and not bought (so they are replaced every so often)
- static in terms of their component configuration
and
- more easily supportable because of their static nature.

Re:My Life is Dilbert

[JoeShmoe]

Actually, I can give you a very concrete example of the difference between buying "home" and "business" lines of computer.

When I was contracting for a major corporation, they wanted to rollout new software to 4000+ PCs. Since there were only two or three different models of machines I recommended using a little known utility by Binary Research called Ghost.

One model used in one division was Compaq Presario. The wise ass IT manager of that division decided to save a little money by getting the cheaper home units instead of the Deskpro 2000 units everyone else had.

Well, come time for rollout and about 75% of the hard drives in the Presario units died after being ghosted (obviously, not the one unit we had tested on). After a couple weeks of panicked calling with 3rd level engineers at Compaq, the bottom line was that they couldn't help us with the problem. They had a room full of engineering documents on the Deskpro line and could literally follow the path of electrons if that was what was needed to fix the problem. If we wanted that kind of help with the Presario line, we would have to go find the random Taiwanese board maker who had slapped together the motherboard and see if they could figure it out.

Well, smart ass IT manager decided to secretly have a few of the now-broken hard drives put in Deskpro units then send them in to engineering. Compaq took one look at the barcodes and realized they had been swapped. Ironically, having the bad drive in the Deskpro they were able to discover there was a bug in Matrox's firmware that caused the drive to report it as having 16 heads when it only had 15 heads. Compaq theorized that the Ghost program was operating at a low enough level that the Maxtor drive was trying to squeeze a square peg into a round hole and breaking itself.

Anyway, bottom line is...if the computers work out of the box, it doesn't matter what's in them. But if you ever plan to use computers to something other than what they current doing, then you need to know that the vendor will actually stand behind them and not tell you that you are SOL. Companies may pay more of a premium for that kind of guarantee, but if you looked at the cost involved in swapping out a few thousand machines because you can't get a problem conclusively solved, that premium might not be so bad after all.

- JoeShmoe
.

Re:My Life is Dilbert

[DrCode]

My experience is that teamwork is great; but the people who talk the most about being a "team player" are usually the ones you don't want to work with.

Re:My Life is Dilbert

[ComputerSlicer23]

I've seen this sort of thing before. Not out of Dell, but out of HP. HP sold two series of machines. Don't ask me the line of computer, this was approximately 5-6 years ago. They sold two computers that we're fundamentally the same. One came pre-done with Win98, the other with NT4.0 or W2K. We picked up the two machines with Win98 with the intention of installing NT4 on them (the price difference was bigger the buying retail NT licenses). At the time, HP was installing plenty of equipment they made/designed that only had Win98 drivers. I searched high and low for the drivers for the video and sound drivers for the onboard stuff for NT4. It just didn't exist. You couldn't get any sound, or anything want that wasn't 800 by 600 at 8 bit color under NT4.

Now, I know why the machines we're so much cheaper. It was a learning experince. We ended up throwing an old sound card, and a cheap recycled video card into the machine. It worked fine after that.

Kirby

Re:My Life is Dilbert

[ak3ldama]

But this is the new Dell/Windows universe where such things are not necessary since Wintel solutions always work perfectly, and the habits of old Unix administrators are just not necessary, so shave that beard, and sit down.

Re:My Life is Dilbert

[CAIMLAS]

But the point is, if you've already got an existing system install, and the "business optimized" (whatever) systems are not the same model as what you've currently got, what's it matter if you get 300 systems that are cheaper and powerful, or 300 that are older and cost more? Well, it does. It just shouldn't matter that there's "business optimized" PCs, as any level headeded person is going to get a support contract for those systems guaranteeing $years of support for that specific model.

I know this is how IBM does it, as I currently work for a large non-profit which relies largely on such contracts. The machines aren't by any means "top of the line" but they're not gimps and reasonably priced for the spec.

And so?

[YankeeInExile]

It's called Channel Marketing/Pricing and it's been around for years.

If it takes me an hour of research to save $10 I have lost much more than I've gained.

Re:And so?

[Tenebrious1]

If it takes me an hour of research to save $10 I have lost much more than I've gained.

If you save $10 after an hour of searching, you're in the hole. If you're buying 20 of them for your office, then you've saved your company $2000. That's certainly worth your time (unless you're Bill Gates).

I have two accounts, one at Dell Business and one at Dell Home. I buy from whichever suits my needs at the best price. I've been doing that for several years now, I can't believe this is really news...

Re:And so?

[Tenebrious1]

oops, meant "200 of them"... oh well, so much for my math.

Hmmm...

[mikeophile]

Maybe internal competition will drive down their own prices.

nothing new

[AviLazar]

This is nothing new. (just to note we are discussing off the shelf price, not haggled prices through sales people) Dell (and other companies) always offer different prices to different organizations. There is the gov't groups, non-profits, small business, large business, consumer, students, etc...

The company I work for buys all dell hardware (servers, desktops, laptops, monitors) - so we get a slight automatic discount on stuff (not that much really, techbargains can usually offer a better price).

Sometimes, not always, being the big corporation won't get you the best off-the-shelf price. Also, many of times times (as it should be) companies have to input their EIN number to get the price (and usually tax discount)...students need to provide proof of their student status... same for other organizations.

Does it affect warranty and support?

[Jeff DeMaagd]

I am wondering if it is like the extended warranty model the computer companies are using. You buy the consumer version of a computer, and you get 90 days or a year, small businesses maybe two years and large corporations a full three years. Parts bought through the corporate division might have a cross-ship arrangtement, but the consumer division might have a delay, where they wait to see the defective part before sending a replacement.

This is all speculative though.

it's like a game.

[kevinx]

my cousin will sit all day adding and removing components from the dell website. There are lots of hidden discounts to be gotten if you are persistant. You can make a PC for 800$ or make one with more ram and a bigger hard driver for $600. One time he even got 6 free palm zires and an axion.

Priceless

[Dr. Zed]

a 512MB memory module ... $289.99
a 512MB memory module ... $266.21
a 512MB memory module ... $275.49
a 512MB memory module ... $246.49
Not buying from Dell .... priceless.

But seriously, it always pays to shop around. You just wouldn't expect to be shopping around from the same suppiler. :)

Prices for different segments

[Anonymous Coward]

I work for a large direct marketer who competes with Dell.
We set prices not only for different segments on any given part, but sometimes for specific customers. This practice has been done for years, and is a smart way of maximizing profit from different segments.

Dell seems to be making a mistake by telling consumers they can buy at the cheapest price if they want.

In the company I am in, if you sell to the wrong segment at too low a price, you (the sales rep) will loose out, becuase any lost GP (Gross Profit) that happens as a result of the sale directly comes out of your paycheck.

Also, on our web site, if you account is clasiffied for a specific pricing segment, you get prices for that segment only.

That way we make sure that the right segments get the right prices.

In other news...

[Waffle Iron]

Can of pop from machine in front of supermarket = $1.00.

Same can of pop from aisle inside the supermarket = 20 cents.

Re:In other news...

[Linker3000]

Cup of coffee in a hotel restaurant after your meal = £3.00

Cup of coffee back in your room = £0 (complementary) + free pack of biscuits!

(Just don't make it with the £2.50 bottle of mineral water)

Capitalist version of Marx slogan

[G4from128k]

"From each according to his abilities, to each according to his needs!" -- Karl Marx

If a segment can afford to pay more, Dell and other companies will find a way to get them to pay it. You find it in airline ticket prices (last minute, weekday travel fares catch business travellers), remodelling projects cost more in rich neighborhoods, sales people judge the buyer and set the price accordingly, etc.

Is it really that different from a progressive tax system in which the rich pay more than the poor?

No Kidding Shipping

[purduephotog]

This is old hat to those lurk in deal forums. Dell Small Business has the best deals... but then they smack you with shipping. The same computer over in Dell Home has a higher price... and the coupon codes don't work.

Accordingly FedEx apparently only charges Dell about 20$ to ship a computer. Ones that are damaged go to the dump. Dell charges 99$ shipping.

Re:No Kidding Shipping

[Joe5678]

Dell Small Business gets free 3-5 day shipping...

Why are we still surprised about capitalism?!

[Anita Coney]

The point of business is to make profits. That's exactly what Dell is doing. What's the problem?

Anyone who thinks Dell is stupid is... wrong.

[bigtallmofo]

The comments of "Wow! That's hilariously dumb" are starting to come in already. Dell is not stupid. Keep an open mind to the fact that something that is counter-intuitive might still be the best way to do something.

In this case, Dell is taking advantage of an inefficiency in the marketplace. Specifically that customers are honestly identifying themselves and they're offering the highest price they feel that particular type of customer will pay. Of course, this starts to break down when customer knowledge makes the marketplace more efficient, but the average person is not a Slashdot denizen or FatWallet (or similar site) checker.

Pricing strategy for nerds.

[shark72]

I'll join the chorus of folks who've pointed out that Dell has done this for, like, ever and that it's quite common in the industry. Best Buy, CompUSA and Circuit City each pay different prices to manufacturers and distributors for the same parts, too.

By the way, Dell's pricing strategy is primarily the reason that the first question you're asked on the Dell home page when you begin shopping is not "how much do you want to spend?" but "where will you be using it?".

At the large company for which I work, whenever we buy Dells, we simply have somebody buy them on a personal credit card and have them shipped to a home address.

The article talks about 256MB not 512MB

[Zed2K]

Unless I'm looking in the wrong place the article actually talks about 256MB modules not 512, but anyways:

"Depending on the link he followed, the 256MB SIMM cost either $88 (Small Business), $99 (Home & Home Office), or $110 (Medium & Large Business)."

Why in the world anyone would ever buy memory from dell continues to confuse me. A 256MB dimm from crucial for a dimension 4600 runs 42.99. A 512 one runs 76.99.

Why pay more than double from dell???

Re:The article talks about 256MB not 512MB

[crimoid]

I could understand how a non-techie would feel comfort knowing that they only had to deal with one tech support number and warranty process.

If some old grandma's computer takes a dump she's not going to want to track down some 3rd party's tech support number for an RMA - rather she'll call Dell who'll send a tech onsite to fix her box or she'll return her HP to CompUSA.

Its somewhat like dealing with servers... I'd gladly pay extra (although probably not double) to have one common vendor for all of my servers rather than mess around with a bunch of different companies.

Re:The article talks about 256MB not 512MB

[Obfuscant]

Why in the world anyone would ever buy memory from dell continues to confuse me.

You haven't been in an institutionalized environment, then. Like, for example, a state government or college.

We have buying departments. They go out and justify their existances by creating contracts with certain businesses for buying things. The upside for the business is they get a good lock (not 100%, but close) on the entire organization's business for that kind of product. The upside for the buying department is they justify their existance.

And before we forget this, there is an upside for the user. We can buy things without having to go through a set of paperwork hoops, because the vendor is officially blessed as the official vendor. Otherwise we need to justify buying whatever it is for whatever price we find it at from whatever company we locate. That justification process is not just because we want to buy from someone else, but would be in place for the contract company if they weren't contracted.

Another upside is that the contracted company already has the organization's account details and we can often just say "send me one of X and two of Y and bill it to account Z" and it gets done.

This takes place for all sorts of things, ranging from computers and supplies to chemical supplies to travel.

Of course, the downside is when you want to try to keep consistency in what you buy over a few year period, and the contracted computer supplier likes to sell the latest hardware ...

"scuse me sir

[way2trivial]

which dump? I have some vacation time saved up..

the real lesson is being missed here.

[frovingslosh]

fare even better with a $246.49 price

$246.49 for 512 meg of memory in todat's market and the post can call this "fare even better" ? Hardly, it's a huge over charge for buying from Dell. Sadly, some Dell systems do require "special" memory, I had tried to help a girlfriend add memory to her Dell system a few years ago and we learmed that standard memory would not work in it. Dell used some memory with very strange clock requirements. Still, we were able to get the memory from any of several large memory suppliers for about half of what Dell wanted for it (although for significantly more than "standard" (and faster) memory would cost. The lesson is don't buy memory at all from Dell, and to avoid getting "locked in", don't buy at all from them.

This isn't shady at all

[gte910h]

This is called "Market Segmentation".

This is a good thing for companies to practice from a profit point of view. Its the process that makes the most money. It also means that people who can not afford to pay a higher price (e.g. students, the elderly) can get software/movie tickets at something they can afford.

Joel Spolsky wrote about it here.

I work in education..

[Sime208]

..and found this out recently.

The guy that deals with buying equipment called Dell up wanting some machines like what he'd bought his kids.

For his kids, Dell charged 300gbp per box.

For the school, they wanted around 30% more!

Dell's excuse was really laughable. Something about "For schools, the computers can be further upgraded before purchasing so it gives you the option of upgrading at the point of sale.". They could be upgraded for home use too, so that didn't really wash.

Beware of customise options!

[zero-one]

One of Dell's fun tricks seems to be charging far more for parts when brought with a PC then they would do if purchased separately. For example, a 1905FP monitor from Dell's UK site costs £284.59 on its own (including tax and shipping). A random Dimension PC from the home and home office section includes a monitor in the price and has the option of upgrading to the 1950FP monitor for £339.58. It actually works out cheaper to get the bundled 17" monitor and buy the other nice LCD screen as well then to just buy the good screen with the PC.

Once you've worked out you need to play the Dell website game to get the best prices from them, it is just adds an extra layer of hassle to buying PCs. Perhaps someone could make an app that scrapes their web pages looking for the best deals (e.g. is it best to start with a high spec PC and customise the components downwards or is it better to start with a low spec PC and add the bits you want).

Re:If anything...

[Master Bait]

Definitely failures of the marketplace when the sellers generate a reality distortion field of Branding and the buyers are hypnotized by it. My girlfriend loves Starbucks coffee and pays a huge premium for their pedestrian flavo drinks. Look inside an Apple computer and you see a collection of off-the-shelf chips and drives.

People who are loyal to the Dell brand insist that they are solid machines -- even though they are really no different than any other collection of Taiwan/China parts.

Re:Well DUH!

[bonch]

Incidentally, this is one of the criticisms against the PC world made by Apple users. No hodge-podge of duplicate-priced parts from all over the place. Just order what you see at the Apple Store, customized if you want.

Discounts that aren't

[bender647]

My company buys Dell, so they get to extend an employee discount to us for home machines. But I found that it is cheaper to buy without the discount. When I punched in the company discount code, all the free shipping and upgrade deals disappeared.