The Dell practice of selling customizable computers online direct to consumers worked exceptionally well because it catered to a niche market of higher end consumers. These customers sought to design their own machines with customizable options, rather than having to make adjustments post purchase on their own. The text, Supply Chain Management, by authors Chopra and Meindl (2012), illustrates the company’s success in this arena stating Dell experienced, “more than a decade of tremendous success selling its PCs only online” (p. 89). As part of this business model, Dell was able to avoid excess inventory by using a LEAN principle of ‘Just in Time’ manufacturing, assembling each PC only after an order was placed. This dispensed with costly inventory build-up and allowed Dell to manage their bottom-line.
The decision to sell through retail outlets, later made by Dell, proved to be the right decision for the company. As the text outlines, lower end solutions with standard parts have proven to fill this gap for in store retail purchasing. Dell was missing out on this market segment by focusing only on the customer computer manufacturing market via online sales. Authors Chopra and Meindl present their support of this statement when they wrote, “Selling standardized models through distributors and retail stores allows the supply chain to save on transportation costs, which are a higher fraction of cost for these low-cost configurations” (p. 92). What is also an intriguing insight by the book, and was very successful in my own days of retail computer sales (when I was employed by CompUSA), is that despite existing as brick and mortar stores, these retailers can also share in the advantage of the custom sales market through kiosks. These kiosks enabled consumers who visited retail stores, but whose needs went beyond the sub-set of pre-configured systems to make