Slashdot Mirror
Dell Cheating on the Direct-Sales Model?
capt turnpike writes "Despite its CEO saying that the direct model is the company's 'religion', according to eWEEK.com, Dell seems to be moving away from direct sales and working with value-added resellers." From the article: "Still, 'they'll never admit it or make [the channel] a formal program,' said one analyst who asked not to be identified. 'If you look at Dell's stock versus HP's, part of the difference has to do with Dell's reputation for owning the customer. There's a sense they own the entire margin and have higher profits because they sell directly. It makes them appear more valuable to Wall Street.'"
This is nothing new, Dell has always been willing to go through resellers even in the 1990s. There are bsiness customers who have exclusive arrangements with VARs but still want to buy Dell. The solution is for the VAR to buy and resell the Dells, though typically the price was a little more after the VAR added in a percent or two for their troubles.
That isn't exactly what Dell is saying. Anybody can go out and buy things from Dell and turn around and resell them to make money. Most likely, this guy bought a large volume of monitors from Dell, therefore got a large discount, and then sold one to you charging less than Dell, but more than he paid for himself. This is not the same as Dell hiring the guy to sell his product. Gateway on the other hand, has a deal with best buy to sell their computers in their retail stores.
I use Dell Higher Education (I work at a University) and they will match any other price from a Dell reseller, or another Dell department (Small Business, Home) if you want to buy directly from them - I do it all the time.
"But this one goes to 11!"
Blah blah blah.
Building your own PCs isn't any great skill. Anyone can do it. But there's really no REASON to do it. It's *cheaper* to buy the pre-built machine from Dell. Building your own PC almost never saves you any money, and hasn't for years. Seriously, can YOU build a complete PC, with a monitor and a legit copy of Windows, for $400?
Now, once you start spendig BIG BUCKS on a PC, then it can be cheaper to build your own. Sometimes.
I think they mean pwning.
Last year, I bought a new Dell workstation for work, the first of several workstations we were going to evaluate to replace our aging machines. Price on website: $1300 and change. But the website was flaky, and I couldn't complete the order. I called, got an "account manager", who took the product numbers I had written down from the website, and we ordered it--only to have the total come to $1400 and change.
I called back to complain, and the account mangler very rudely refused to do anything to help resolve the situation, boldly lying about one of the options I had purchased as an add-on supposedly being included in the base price. Eventually he said, "I don't know what you expect me to do about this," and wouldn't say anything else.
Needless to say, today we are an all-HP shop. We have a local reseller who provides excellent on-site service, and who I can reach directly; no IVR, no switchboard; I call my tech directly.
This site will never buy another unit from Dell.
Find environmentally and socially responsible products on http://buy-right.net
In the 90's and maybe even the early 00's you could build your own machine cheaper, but I no longer believe this to be true. Lately I've found that it would cost me about the same amount of $$ to build a PC versus buying one from Dell. Especially when you're bundling monitors and such, there is no possible way to save hundreds of dollars rolling your own, sorry.
Also, it's one thing to be able to assemble a computer from commoditized parts, but it's often a whole another thing to be able to get the parts working together optimally. Add in the fact that most people want tech support for the warm fuzzy feeling, and it just doesn't make sense for most people to build their own.
I saw the same thing too, however it was actually a decent deal. If you looked closely, yes it was an EOL machine, but the price did include AppleCare. It's about $150 or so for a Mini, I think, so subtract that from the price and it's not as bad a deal as your laughter would indicate.
Having worked in Dell's VAR division, I can attest to the fact that very few VARs actually add any kind of 'value'. Worse, it doesn't even take much to be approved as a Dell VAR - just a signed agreement that you won't export product, sell to large Dell accounts, and that you will disclose the enduser every time you order. VAR division sales people generally have larger discretionary discounting power on the non-entry level lines; it's just a matter of finding the salesperson who will give you the price you want.
...we've put an official decree down that we're not buying their crappy, crappy crap anymore. We finally convinced the higher-ups that when they save a couple of hundred bucks on a server, they lose it all in downtime. Who'dathunk you had to explain money to accountants?
Which is more painful? Going to work or gouging your eye out with a spoon? Find out!
http://www.workorspoon.com
If it is the same one I saw, it not only included AppleCare, but a wireless keyboard and mouse as well. If I wasn't saving my pennies for a FrontRow Mini to use as a media center, I may have picked it up.
If your a small fish, you probably won't get the service you think you deserve from Dell, that's my experience. Now that I spend a few million a year with Dell, while it may not be Dell's biggest account, we get some more attention.
I hope Dell's listening, because I've been buying Dell personally for a long time and my XP400 while a good machine, didn't come with a restore disk (lame) and had so much 'trialware' running it was killing my performance. I just had to wonder what a non technical person would do. Is it about the price or the customer? IMHO Dell's going to lose market share.
Here's a good war story, my 5160 laptop USB ports went dead, I think due to a power surge. I called and spoke to 'India' to a very very pleasent person, but couldn't do anything outside of the script. They finally agree to replace the motherboard (after having me check lots of things). I travel a lot, so the local VAR calls me and we make an appt. for 2 weeks out. He calls back and says that he had to return the part because the ticket was open to long per Dell. I had to call Dell support again, and again go through the script, and they wanted me to do every test again (30 minutes). I played along, because I needed my ports and there was that this guy was going to comprehend the situation. After both the Dell calls, they ask, would you talk to a supervisor about your experience. I did both times. But, the second time, I told them the story and I don't think it meant anything to the guy, because it probably didn't impact his pay. I got a 'ok thanks'. (No thank you)
So Dell had to take two calls at 30+ minutes a pop. Dell mailed the motherboard twice to the VAR and 1 time back to Dell. I had to sit on the Dell support line for an additional 30 minutes, but luckily they gave me another code, the VAR got the motherboard back and he fixed my laptop before I headed on another trip.
Did Dell save money on that transaction by outsourcing? Probably, but it's short term IMHO
For more discussion on Dell negativespace2005-Dell at yahoo dot com