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Technology Stocks : Dell Technologies Inc.

DELL 122.46

-8.5%

3:59 PM EST

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To: John Carpenter who wrote (33121)	3/8/1998 8:09:00 PM
From: Jack T. Pearson	Read Replies (1) of 176387

"What barrier to entry is there to stop CPQ, IBM , or HWP from adopting DELL's highly successful direct sales/inventory method?" Lets say CPQ starts selling direct. Direct prices will be lower than through traditional channels because there isn't extra transportation, inventory management, and profit to distributors and retailers. So their traditional channels loose sales to Compaq direct sales or distributor and retailer margins get cut or both. As a retailer, I'd be better off promoting IBM and HP product where margins are higher and where my advertising dollars don't wind up helping sell more Compaqs direct.

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