Dell’s Got Game

What’s the key to becoming a successful Internet reseller? First, learn to go direct.

Dell’s Gigabuys store looks like a winner. Its home page has a product search button and several product menus, without requiring users to scroll down. This means all the goods are within a few clicks. The prices seem competitive, and Dell has already built the back-office accounting system (for Dell.com) it will need to make this work. (The two sites can already share a “shopping cart”.) The key to the store’s profitability will be whether Dell can move the goods from warehouse to customer as quickly and efficiently as it moves its own products. The Austin, Texas area has several companies who can help Dell if they need it, but I personally doubt they’ll call. Do I see anything wrong with Dell’s strategy, tactics or execution? If I owned some Dell stock (which I don’t) I’d have to say no. As a writer, of course, I have to wonder how Dell expects its customers to learn what they need to know in order to buy. My guess was Dell would use links to add education and editorial services, and find a way to turn a profit on them. What made all this possible, of course, was Dell’s success in selling its own goods directly to consumers. That eliminated the channel conflicts now bedeviling competitors like Compaq. This also let Dell build the systems it would need to become a successful reseller. Time will tell whether Dell makes it as a full-line computer store. Early indications are that it will do very well indeed. That should be very disquieting for Dell’s new retail competitors. But what do you think? Will Dell make it as a retailer? And what does that mean for everyone else in the PC business? Let’s talk about it.

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