Dell goes online to sell everything the user needs

Hopes to steal a march on its rivals

Dell is vying for a place in the cyber channel with today's launch of gigabuys.com - its on-line shop selling products from a multitude of vendors as well as the odd Dell PC. The direct vendor's newest site will offer 30,000 electronics products in addition to its own computers - including chips, printers, digital cameras and software. The move into E-retail follows Dell's disappointing financial results for last year in its main PC business. Only available for US customers as yet, the online store is aimed at home and small business customers. According to CNET, the Texan vendor will not actually stock inventory from other companies. Delivery is likely to go via a distributor or electronic reseller. Dell will handle the customer orders. The Wall Street Journal said Dell wanted to establish itself in the accessories market before it was beaten to it by one of its competitors. Otherwise, customers might find what they wanted on other sites. Dell CEO, Michael Dell, said: "They might decide to buy their next PC at somebodyelse.com." In turn, accessories could push punters across to Dell's existing Web site - Dell.com. Dell already claims to get around 2.5 million visitors to its Web site per week, totalling $14 million Internet sales per day. Vendors are expanding their product lines to combat increasingly tight hardware margins and boost flagging sales. Dell recently reported fourth-quarter sales at $5.17 billion, a 38 per cent jump but falling below the $5.5 billion predicted by some analysts. For the first time in nine quarters sales rose less than 50 per cent. Hewlett Packard is also expected to launch an Internet site - selling just about everything - in conjunction with start-up business Ariba Technologies, according to a CMP report. It estimated this market - "from desks to paperclips" - could reach $500 billion by 2002. Robert Cashman, PC research analyst at Context, said gigabuys.com looked similar to the DellWare site, where customers can buy third-party products. Cashman said: "One-stop shoppers wouldn't shop for accessories at a vendor, even if it was a direct seller. This is partly because you wouldn't expect a manufacturer to sell these products, and partly because you would wonder if they could be as competitive as a distributor or reseller." Regarding industry trends, Cashman commented: "Dell is following the likes of Gateway and Compaq. They are becoming part of the channel and definitely changing the way traditional vendors are seen. However, I'm not sure what message this is going to give to corporate customers." ®

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