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Dell Cheating on the Direct-Sales Model?

Posted by ryuzaki0 on from the i-won't-tell-if-you-won't dept.

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.'"

2 of 116 comments (clear)

  1. If I was Michael Dell.... by Anonymous Coward · · Score: 5, Funny

    "What would I do? I'd shut it down and give the money back to the shareholders."
    (Oct. 6, 1997)

  2. Where's the V in VAR? by i+am+kman · · Score: 5, Interesting

    VAR used to mean you repackaged software and hardware and sold a more complete solution. These days, HW is often bid as a commodity line item so HW VARS often simply provide the HW as a convenience to their clients. Clients know Dell's prices and that's what they expect to pay so Dell's just using this channel as an extended sales force into clients that would've bought direct anyway - who cares?

    In fact, they're successful with this model precisely because they're direct channel models is so successful. With our customers, they often specifically request Dell computers and they generally know exactly how much they cost.