Dell Plans to Sell PCs at Wal-Mart

DJAdapt writes "In a departure from Dell's approach of selling machines only directly to customers, a Dell spokesman said Thursday that the computer maker will begin selling two of its Dimension desktop computers in about 3,000 Wal-Marts beginning June 10. Dell spokesman Dwayne Cox said the Wal-Mart deal 'represents our first step' into global retail. 'Customers want more and new ways to buy our products, and we plan on meeting their needs on a global level,' Cox said. 'Offering Dell Dimensions in Wal-Mart is a great example of this approach.'"

Comments

Increase sales volume, destroy the brand

[traindirector]

This screams "We want to be the #1 North American computer seller again and we'll just have to deal with the negative effects of that on margins and brand perception".

I'm sure they'll sell a ton of these because of the nature of Wal-Mart, but this seems like a horrible move in terms of the perception it will create about the Dell brand. I can see those who know little about computers who are looking for quality rather than bargain basement pricing steering away from Dell because they will be the new "cheap Wal-Mart computers". Dell will surely be offering low-end models and will make even less on them because a portion of the purchase price goes to Wal-Mart.

I imagine they're going with Wal-Mart because

• Wal-Mart takes less of their profit margin than a Best Buy or Circuit City
• it's a quick way to sell a lot of computers
• pushing up sheer quantity of computer sales to achieve the highest number is their primary goal at the moment.

Either I'm missing something or this is a short-sighted move.

Re:Increase sales volume, destroy the brand

[SEAL]

Either I'm missing something or this is a short-sighted move.

You're missing the minor point that HP is killing Dell lately, and HP sells most of their computers through traditional brick&mortar channels. Dell is trying to get back in the game.

Re:Increase sales volume, destroy the brand

[MMC Monster]

My local Walmart sells iPods.

'nuff said.

Re:Increase sales volume, destroy the brand

[SatanicPuppy]

You're talking educated consumers. As far as Joe Sixpack is concerned, Dell is still a quality brand...Hell, you buy a computer from Dell, and it actually has a NAME on the front, as opposed to most of the computers you buy from Best Buy, Staples, and Walmart now.

I dislike Dell, and when people ask me why I say, "I find their tier two and three support to be unbearable, and I hate their proprietary hardware, and their tendency to skimp on things like montherboards." It makes people's eyes glaze over, and in their minds, they file it away under "Nerd crap that doesn't apply to me."

The bottom line is, for the average Walmart buyer, Dell will seem like a sexy, high-end brand, even if they're just dumping their low end stock on Walmart.

Re:Increase sales volume, destroy the brand

[div_2n]

Either I'm missing something or this is a short-sighted move.

No offense, but you are missing something quite subtle yet extremely profound. It is no big secret that the prices of computers have plummeted over the last ten years or so. From the consumer's perspective, this is a great thing. However, this has the interesting side effect of making computer repair less economically attractive. In the age of the disposable society, people just dispose of their computer and buy a new one rather than spend money on repair.

This is where Wal-Mart comes in. They have thrived and to some degree promoted (even if unintentionally) the disposable society. Many things are so cheap that people just go buy a new one if their old one breaks. Selling computers at Wal-Mart is a natural fit for this mentality. While you don't want to sell lemons, you don't have to sell the top of the line $5000 desktop there (in fact, you wouldn't want to). Rather, just sell your low end and low margin PCs there and watch as every couple of years, a consumer buys a new one.

It is this kind of approach to selling low cost goods that led Snapper lawn mowers to refuse to do business with Wal-Mart. Quality is one of their core values. Quantity isn't if it affects quality.

Sold at Wal-Mart != low quality

[tepples]

I can see those who know little about computers who are looking for quality rather than bargain basement pricing steering away from Dell because they will be the new "cheap Wal-Mart computers". Any more than a PLAYSTATION 3 video game console is perceived as the "cheap Wal-Mart console"?

Dell [...] will make even less on them because a portion of the purchase price goes to Wal-Mart. As opposed to a portion of the purchase price going to DHL (or whatever shipping company Dell uses)?

Re:Sold at Wal-Mart != low quality

[traindirector]

Any more than a PLAYSTATION 3 video game console is perceived as the "cheap Wal-Mart console"?

A PlayStation 3 is a single item with a single manufacturer that doesn't vary in price or quality depending on where you get it. No matter where you buy, you get the same PS3. Do you really think the same is true with computers for someone who doesn't know much about them? I'm going to leave the burden of proof with you, as this doesn't seem worth writing an argument for.

As opposed to a portion of the purchase price going to DHL (or whatever shipping company Dell uses)?

It's clearly cheaper for Dell to pay their super cut-rate DHL shipping than to give Wal-Mart a portion of the profit and to ship to their DCs. If it weren't, how would Dell be saving money by only selling direct for so long?

Re:Sold at Wal-Mart != low quality

[BakaHoushi]

At the same time, I've seen instances, quite a few, where a company produces two varieties of the same item:
One for a "normal" store
The other for Wal*Mart.
The difference being that the Walmart version is always inferior at some level.

Personally, this does not surprise me, but it worries me. People have a hard enough time dealing with computers now. How well with the average Joe deal with them when Wal*Mart sells them a cardboard box full of rocks and calls it a PC?

Re:Sold at Wal-Mart != low quality

[cmacb]

"The Walmart version looked identical to the hardware store version in every way, but it had plastic gears instead of the metal gears in the hardware store version."

If you saw it on the Internet, I'm sure it's true but...

It's also "well known" for companies to sell large stores like Walmart, Frys, Compu USA (RIP), Circuit City, etc. unique model numbered items so that those stores can "price match" one another. You know: "Bring us the ad from a competing store with the same product and we will match their price." Followed by "Oh, I'm sorry sir, that ad is for the HP 37509Q783RT7 laptop computer, the one you are looking at here is the much better 37509Q783RT8." With computers instead of swapping out the metal gears for plastic ones, you get lower end graphics cards 8X instead of 24X burners etc.

Well, anyway, that's my apocryphal consumerism story, and I'm sticking to it.

Missing from the discussion above is the fact that in many rural areas the only store in town is a Walmart. I haven't had any particular quality problems with the one here. For business products they often have lower prices and more selection than the nearby Staples (but Staples does have a better selection of laptops). I can drive 30 miles to a Best Buy (the smallest in the country they tell me) and do even better as far as selection. But if the close-by Walmart has what I'm looking for I have no hesitation buying it there.

Daddy likes...

[phildawg]

Yea, I'm glad somebody will have the opportunity of taking on Best Buy. I mean outside of Best Buy, are there really any PC retailers worth mentioning? It almost seems like you either buy your PC over the internet or from Best Buy... Now you can buy it from Wal-mart or Sam's Club. And if this works out well, you can probably seem some configure to order kiosks placed into these stores as well to add a better variety. Maybe some of you guys like Best Buy more than Wal-mart... But I don't think you understand just how evil Best Buy is on the actual level... Have you ever received Best Buy coupon's in the mail? Have you received them lately? If you haven't received them lately or you find your Best Buy credit account closed and told it's because you haven't purchased anything in a while.... realize these are all roadblocks used to slow move you away from using Best Buy because they have data mined you and determined you are not at the profit level they desire, no coupons for you!

Re:A major change in emphasis

[_KiTA_]

Except that Dell has sold through 3rd parties before. They're just adding one more. Yes, this is a bit of a shift in strategy. But I seriously doubt that even Walmart is big enough to bring down Dell's direct business model.

Will Dell sell a lot of machines through Walmart? Who can say? Will Dell get their name out there right next to HP, bringing their online and phone stores business that they might not have gotten before? You bet.

I think that's the ultimate goal here. If the individual units sell at Walmart is irrelevant -- this is one giant free advertising campaign.

Re:This represents our first step into...

[nickspoon]

Wal-Mart owns various different stores in various different countries under various different names. For example, ASDA, a large chain of discount supermarkets in the UK, are a division of Wal-Mart (it says so on the bag). And as far as I am aware, ASDA sell electronics, though I don't know about PCs. Now the question here is, will Dell be pushing for international retail at Wal-Mart's various international divisions, or just within America? Only time or a Dell representative will tell.

Re:Wal*Mart Bob

[LunaticTippy]

I'd like to see some legal rulings on abandonware. Right now copyright is still in effect even if the company is gone and hasn't assigned the rights. In the meantime, a good rule of thumb might be if the software is available on a prominent website and it isn't c&d within several years the rights owners probably don't care. Filesharing is a whole different case since there is no effective way to stamp out every copy on the entire planet. Hm, I wonder if there are any MS-BOB torrents around?

In any case, the OP could have just posted a link. I would have guessed anyone with a MS-BOB CD clock would know about the availability of the code. It's been there in the top few search results for years.

Another thought: I actually owned a copy of MS-BOB when it was current, and I don't think the licensing was as draconian as is fashionable these days. It might be completely legal for me to use.

I'd like for copyright to revert to public domain if the work is not available for purchase for some number of years. We're going to lose a lot of works forever if this issue isn't addressed.