inquisity

I noticed that Dell has decided to abandon its direct-sales model that it has been using for 10+ years. Now, instead of buying a Dell from www.dell.com or one the phone, you can stop by your local Best Buy and pick one up:

I’m skeptical about Dell’s move to sell in retail, which has been tried before and scratched due to low profit margins. One of Dell’s biggest advantages was using a just-in-time (JIT) inventory system, meaning it only ordered the parts to make your computer after you had paid. This allowed Dell to keep minimal inventory on hand at any point in time.

In the computer industry, this is a huge advantage. Because computer hardware is becoming faster and cheaper at an exponential rate, computer manufacturers have to keep offering the latest and greatest at competitive prices. If HP, for example, overestimates demand and produces too many desktop computers, they either become obsolete in a few months, or have to be sold at a reduced price (and for less profit or even a loss). Dell minimized this problem by only ordering what was needed.

Best Buy is certainly the best retailer to choose, but now Dell is competing in-store with the likes of Apple, HP, Compaq, eMachines, Gateway, Acer, and others, who have much more marketing experience in the retail arena.