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Technology Stocks : Compaq
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To: Stevefoder who wrote (13142)1/11/1998 8:06:00 PM
From: Tmanquinn  Read Replies (2) of 97611
 
Sales "channels" are the middlemen or retailers that Compaq utilizes to get most of their product to the end customer. They mark up the price they get from Compaq in order to make a profit. Stuffing a channel is when a manufacturer oversells to a retailer whether intentional or not. The manufacturer records the sale and the channel or retailer is left with excess inventory.

What Steve suggests is that Compaq does some monitoring of channel inventory and holds back sales when they reach some predefined level. I have no information that would confirm or deny Compaq's channel inventory strategy, but I can tell you that if its true, Compaq is in the minority of most manufacturers in that respect.

Dell can't "stuff the channel" because they sell direct.
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