Dell's Asia-Pacific president, Phillip Kelly, was in Sydney recently to sing the praises of the direct-selling model. He said his company was pleased to see other manufacturers acknowledge both the market share and efficiency of selling direct.
"If it wasn't the best way to do business, why are they reacting like they are?" asked Kelly. But, he also said that "implementing a direct model is the hardest thing in the world", explaining that everything has to be in place before you sell the first unit, unlike the channel system where the onus can initially be placed on the distributor.
Quick to point out that Dell simply wasn't interested in home or first-time small business users, Kelly said the strength of Dell lay in the ability to service its corporate and government customers all around the world on an equal basis. He explained that Dell customers can have prices set in one country for delivery in another. When asked if there was an advantage for Asia-Pacific buyers to get their prices from Dell's US list, he explained that prices were generally lower in this region "but don't tell the US customers that".
Dell now relies heavily on its Internet presence to keep customers informed and running. "The Internet is universal and real-time!" explained Kelly.
Pricing is a subject close to Dell's heart. "We change pricing very quickly because we're a direct marketer. Every day components are made with a lower price and better quality and if we want to, we can change system prices many times a day." However, he pointed out that larger customers are informed of price drops well ahead of time, as a form of price protection.