For Michael Dell ,this success story started in high school when he cecame a computer whiz kid.Later, while attending the University of Texas in the early 1980s,he began buying personal computers from local retailers who had excess inventory .He supercharged them with new disk drives,enlared their memories,and improved their monitors.Then he sold them at a discount through ads in local newspapers and computer magazines.Dell's souped-up computers handled more data faster than machines manufactured by the leaders in the computer industry.During its first nine months of operation,Dell Computer generated $6milliln in revenues--a staggering amount for a firm that began as a one-man show on a part-time basis operationg out of a room in a college dorm.
Early success enabled Dell Computer to concentrate on its direct sales approach;selling computers over the telephone.According to Michael Dell,''Customers tell us what they want and we build computers to meet their needs and ship them out,usually within thirty-six hours.''By selling direct to customers,Dell avoids the price markup that retailers charge;in many cases,customers can purchase Dell's ''customized''computers for 15 to 25 percent less than the brands sold in stores.In addition to lowering prices,direct selling has enabled Dell to reduce inventory costs and to stay in touch with its customers.By constantly talking with customers over toll-free phone lines,Dell Computer finds out what customers like and dislike.As a result,the company has incorporated into its new product lines numerous small improvements that give it an edge on its competitors.
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