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Technology Stocks : Dell Technologies Inc.
DELL 121.05+4.9%Feb 6 9:30 AM EST
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To: rudedog who wrote (47016)6/10/1998 1:05:00 PM
From: Chuzzlewit  Read Replies (1) of 176388
 
Rudy, CPQ's plan is to provide the infrastructure for direct sales but fulfill primarily from the channel. The channel gets less margin than for their own sales but also has less COGS. You seem to be arguing that the channel will act essentially as a warehouse for Compaq. If you think about what you've said it really implies that at least a portion of the channel could be used for phony sales. If the sale is made at the level of Compaq, then what is the function of the channel member? To assemble and ship BUT in order to do this it must first of all been carrying the inventory with which to assemble the machine. In other words, its really the same invitation to stuff the channels, but this time the channel member would have even less to say about it than in the past. I still think that Compaq must either jettison the channel completely for BTO stuff. The only time a distribution channel makes sense to me is if you are selling a shrink-wrapped product.

TTFN,
CTC
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