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Thread: Thoughts about direct sales vs retail

  1. #1
    *Flashaholic* KevinL's Avatar
    Join Date
    Jun 2004
    At World's End

    Default Thoughts about direct sales vs retail

    Inspired by a thread talking about Surefire and their delays when buying direct, I've been thinking a little bit about companies whose distribution model relies on the traditional retail system, vs direct Internet sales.

    In the era of the Internet, many traditional retail companies have been forced to set up Internet shopfronts. Also, others have emerged which use the Internet/mail-order/phone-in collection of technologies exclusively. It seems there are many parallels.

    I've not-so-recently thought about adding a Mac to my network of computers, and being used to ordering over the Internet, filed my order electronically. Apple just keeps pushing the ship date back. I care not for what reasons any more than the Surefire buyers care about why SF cannot deliver and keeps pushing back the date. "It's a specialty product" "we don't keep stock" "we're backordered" - the customer doesn't care. Really. The customer is interested in getting their product. I am REALLY not happy about this either.

    On the other hand, the other major manufacturer I order from has, over the years, slashed delivery times to the extent it leaves my jaw dropping. Their distribution model for their computers is direct Internet sales. The last laptop I ordered - I filed the order over the weekend. Monday afternoon they called me to confirm my custom configuration as they always do. That same week, I wrote to them on Thursday because I realized I wanted to change one option. They called me back - "Your laptop is already on the plane." Two hours later, their local office called me and asked when would be a good time to deliver it to my doorstep.

    That's FOUR days to build me a CUSTOM configuration that they could not have pre-stocked, put it on the plane, fly it across international borders, and rush it to my doorstep. And my first thought was "that's impossible" - well, here I am holding it with the exact config I ordered on Monday and I'd better believe it!

    And from the start they actually told me two weeks lead time. Put it this way, yes I am buying from them, and since I work in this field, I am sometimes required to make purchasing decisions or influence such decisions at the office - guess who I recommend.

    So it leads me to think - do retail businesses only set up Internet storefronts for the sake of doing so rather than seriously backing them up? If so, why even bother when they can't fulfil the orders?

    It leads me to the same advice I gave the SF buyers - buy from a retail-level distro who has better communication, better inventory management and better logistics. I am kicking myself for making the wrong decision to order online rather than hunt down a retail outlet with what I wanted. The irony is that five days after the order was placed I found a local shop with the Mac I wanted, except that I decided not to cancel the online order. And why didn't I cancel? Because of the excessively optimistic ship date they provided me.

    It's not to say I don't understand the challenges in the supply chain. (Most customers, even if they do, could not care less with regards to companies) It's just that if they cannot deliver, don't promise. At this point, having promised so much, the product itself had better DAMN well deliver or I am going to be really mad.

  2. #2
    Join Date
    Dec 2003

    Default Re: Thoughts about direct sales vs retail

    not really fair to compare computers built with comodity parts VS Surefire built from mostly custom parts.

    Custom parts are almost always sourced from a single manf due to extremely high setup costs.

    a single plastic molded part may cost 10K+ to make the first one, then pennies each. Guess how many times a manf will pay for those setup costs.

    runs for custom parts tend to be large & infrequent. So when you run out, you've got a long lead time.

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