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Summary BBA3201 Marketing Unit 6.docx BBA 3201 BBA 3201 Marketing Columbia Southern University Logistics I will be discussing how Dell is changing the way computer manufacturers are looking into the way they currently sell their inventory and consideri
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BBA3201 Marketing Unit BBA 3201 BBA 3201 Marketing Columbia Southern University Logistics I will be discussing how Dell is changing the way computer manufacturers are looking into the way they currently sell their inventory and considering a new way ahead. Currently most manufacturers...
bba3201 marketing unit 6docx bba 3201 bba 3201 marketing columbia southern university logistics i will be discussing how dell is changing the way computer manufacturers are looking into th
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BBA 3201
BBA 3201 Marketing
Columbia Southern University
Logisti
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I will be discussing how Dell is changing the way computer manufacturers are looking
into the way they currently sell their inventory and considering a new way ahead. Currently
most manufacturers sell in store fronts and don’t offer custom builds to the consumers. Dell
has been operating in a custom order fashion and has been seeing great sales doing so. This
allows Dell to hold very little inventory on hand leading to no inventory loss and no need to
clearance items out since they don’t sit on shelves for more than a week. Other computer
manufacturers build the computers and sit them on the shelf until they are purchased where
they then go to a store and sit until someone purchases them. The problem with that is that by
the time a consumer purchases the computer it could potentially be out of date and will need to
be either listed for a sale price or clearance out. All of this leads to a bigger profit for Dell and
lower profit margins for companies that ship computers to retailers for sale. Some of the
competitors are now looking in to competing with Dell in the area of custom PC’s ordered and
shipped directly to the buyer. This new way of selling computers will enhance their sales
since only around 25% of all PC’s sold in the US are in the retail channel. By realizing the
market they are missing out on they will capitalize by seizing the rest of the market and
enhance their profit margins.
Dells logistics’
Dell only keep enough stock on hand to make it through a week of custom builds
which alleviates the possibility of the technology becoming outdated. Dell also only does
custom builds shipping directly to the buyer. This eliminates products sitting on shelves
awaiting
, purchase meaning Dell doesn’t have to sale or clearance products out resulting from sitting.
The custom builds means that Dell sells computers to consumers at a lower price since it only
installs
technology that the consumer orders and not any waste. This allows Dell to sale at lower prices
than its competitors since the competition is trying to build computers that will suite a large
variety of individuals and purposes. The competition operates off of a build in large lots of the
exact same build and ship them to retailers to sell. The problem with this is not only do they
have to build the computer to specifications for a wide variety of uses but they also have to
ship these items out in large quantities for them to sit on shelves and warehouses until they are
purchased. Computer technology is rapidly expanding and what is good today will be obsolete
within a few months. This leads to the retailers having to sale price or even clearance out the
items to get rid of them. Every computer sold at a sale or clearance price reduces the
company’s profit margin for that product. Another problem the other companies have to deal
with is
forecast demand forecast to much and you’re forced to dump the inventory at huge discounts
but discount to low and you lose sales when consumers do not want to wait for product
availability. Dell only has to forecast for a weeks’ worth of inventory at a time whereas the
competition is forecasting for about a months’ worth of inventory at a time. Dell ships directly
to the consumer with the purchase of the product already done and shipping paid whereas the
competition has to build the product, ship it to its retail stores and wait for consumers to
purchase the products.
This leave them also paying for the shipping of the product to its retail stores or having to
increase the price of the product to recoup the cost of shipping the product. On top of all that
they also have to survey the market area for each retailer that they ship to so that they ensure
that they are sending the correct amount of units to each location. A location around a college
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