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Sunday, January 27, 2008

It's not a religion

Michael Dell is on record as stating the direct model is not a religion and anything can be changed. I suppose if it were change would not be an option, but that is another matter. What the company has done is it has continued with its direct model while at the same time partnering with WalMart, Best Buys and other retailers in America as well as in Europe and Asia. In keeping with change, Dell annouced several weeks ago it would launch a channel program where it would partner with VARs (Value-Added Resellers). This course of action by Dell is, of course, not without its detractors and skeptics. Nonetheless, the potential sales increase for Dell is
enormous. I think the future looks very bright for Dell.

Some thoughts, or lessons, come to mind as concerns independent apparel retailers and independent technology resellers, VARs (Value-Added Resellers) as they are more commonly known.

1 The willingness to change your mind about how you do business. Dell has effectively admitted if it is to not only survive, but to thrive, it must reassess the competition. The company decided it would be better to partner with that competition, namely VARs and mainstream retailers to their mutual advantage.

Thought: Both, independent apparel contractors and independent apparel retailers in Round Rock and Austin have consistently acknowledged the value of partnering with one another. Yet, the decision to act on that acknowledgement has yet to materialize. Talented, knowledgeable, skilled and experience techology individuals have reponded heartily to the possibility of partnering with VARs, not as employees, but as independent contractors. That is a mutually advantageous relationship for both parties. Independent retailers, whether in apparel or technology, continue to hold to a model that will not allow their growth because they as individuals can only do so much.

2 The realization that it takes time to develop relationships with VARs who were yesterday's competition. Like anything new Dell realizes it has to, and Dell is willing, to make adjustments if the relationships are to grow stronger. Dell's decision to partner with VARs by any other name is a network.

Thought: The Independent Enterprise Network model is not a cure for all struggles, challenges or problems faced by independents. However, because it provides a means for increased sales and service without the burden of hiring new employees, the potential for growth in sales and service is enormous.

Finally, the IE-Network business model as different from conventional business as was the direct model for Dell twenty years ago. You remember the snickering about an upstart company thinking it could sell its computers without a middleman? I hear the snickering of those who think you cannot leverage IE-Networks to create or build apparel and computers, locally. Michael Dell didn't listen. I'm not listening, because I know there those who have worked their existent business model long enough. They are surviving. Now, they want to thrive. Their business model is not a religion. They can change it.

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