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What Inspired Michael Dell to Sell Computers Directly to End Customers?

Posted on the 14 August 2011 by Bonirulzz @bonirulzz

Michael DellMichael Dell is the founder and CEO of Dell Computer Corporation.
It was started in 1984 with $1000 in reserve and now it has $62 Billion! It sells computers in almost all countries of the world and is the world’s second largest computer selling company.
Dell is very famous for it’s Direct Selling Technique(i.e.Company sells its product directly to customers, all intermediates like distributors,retailers are eliminated)
Michael Dell adopted the Direct selling technique at a time when biggies like IBM and Apple Inc were selling PC’s through Indirect channels.

So what inspired Michael Dell to stick on his thinking and not to sell PC’s indirectly to customers ?

The answer to this question doesn’t lie on the analysis between Direct and Indirect selling technique, and that Dell found Direct method better,yes that was one of the reason but not the prime one.
In fact,answer to this question lies in his nature/attitude,which inspired him to sell PC’s direct.

Michael Dell believed in one thing, If there’s a way to get something done more quickly and easily, then that’s the way to go.In his book, Direct from Dell, he says “I’ve Always Been Fascinated with Eliminating Unnecessary Steps”

The idea of selling computers Direct actually favoured his way of thinking.He saw that by selling PC’s Direct he could eliminate the role of distributors and wholesalers, cutting a long process short!
He wanted to keep the process of buying simple and easy.He didn’t wanted his customers to suffer from the problems due to some distributor/retailer.
Dell says “Indirect channel was based on a marriage of the unknowing buyer and unknowledgeable seller and i knew that marriage couldn’t last”.

He asked himself a question “How can i make the process of buying a computer better?”
Answer was “Sell computers directly to the end customer.Eliminate the reseller’s market and pass those savings on to the customer”

This very reason Inspired Micheal Dell to start selling PC’s Direct.

Now, I would leave you with some interesting facts Of Micheal Dell and Dell Corporation:-

    -Micheal Dell was the youngest CEO of a company ever to earn a ranking on Fortune 500
    -He has earned various Titles on his name like “Man of the Year” by PC Magazine , “Entrepreneur of the Year” by Inc and “CEO of the Year” by Financial World.
    -The Annual income of Dell when he was in high school was $18,000 (i.e. INR 8,10,000 Approx)
    -When Dell was launched there were 25 companies selling computers.Today 17 of that 25 companies are wiped out.
    -In 1999, sales of top $35 million per day
    -Dell Corporation is build on this three rules: 1) Disdain inventory 2) Always listen to the customers, and 3) Never sell indirect*

(*In 2010 they have decided to sell the PC’s Indirect as they found their Global market share falling down.)

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