E-Commerce Success and Its Causes

The Success of Dell

Dell Computer Corporation is a success to the E-commerce world. Dell was founded 16 years ago by a medical student name Michael Dell. Today, Dell is one of the world’s top providers of computer products and services such as servers, storage, workstations, notebook and notebooks computers. The company has an average revenues of $38.2 billion dollars worldwide and it employs over 41,000 staff worldwide.

In 1994, Dell started using the Internet as an information source and by 1996 they already started their business through the Internet. The reason for them to start using Internet to conduct business was that Dell saw the opportunities. By using the Internet, it is easier to communicate with all the involved parties, includes less costs for transactions and provide an improved customer relationship.

E-commerce offers many benefits to businesses and consumers in their purchasing activities. It changes the purchasing process from being a physical transaction to being a virtual transaction where no paper is involved.This saves time and money for everyone and opens up a virtual global marketplace – for example, you could be staying in Malaysia but you can still buy online from a shop in New York. It is also more convenient as you can access the Internet 7 days a week, 24 hours a day, at your own convenience. However, it requires a whole new business methods and infrastructures to meet the demands of the buyer and the needs of the seller.

Disintermediation and real-time production
Due to its efficient supply chain management, Dell is capable of shiping a PC within 24 hours of receiving an order. This introduction of the internet and e-commerce has helped Dell improve this efficiency and profitability. At Dell, the traditional supply chain has two fundamental differences: disintermediation and real-time production. Dell sells directly to its customer, cutting out the middle man, the distributor and retailer. When a layer that exists between two other layers is removed like this, it is known as disintermediation.

Dell manufactures the products and then sells them directly to the customer, Dell creates disintermediation – the outside retailer is cut out of the process. This reduces time and costs in the process and also ensures Dell is better positioned to understand its customers’ needs directly.

Dell’s supply chain costs are reduced on the storage side too by its efficient relationship between orders and production. Each individual PC that is ordered is only manufactured AFTER the order is received and only using the freshest raw materials, which are delivered to the factory several times a day. This is known as just-in-time production or real-time production. There is no warehouse for either raw components or finished goods. Each computer has been paid for and has been built for a specific customer before it is shipped.

Real time production ensures no costs are incurred from rising inventory stocks. Output is always driven by actual customer demand. Each individual product is created with the latest technology and each product is custom-made to exactly what the customer wants. Dell’s direct selling started off using the customer channels of mail order and ordering using toll-free phone numbers and this has grown to embrace online sales channels too.

Focus Improve Customer Service
customers can create and view their service records online. This includes product support, shipment and delivery dates. Each purchase comes with a service tag code, which can track the model bought and its service requirements. This allows Dell customer service representatives to quickly and efficiently handle requests.

This level of 24 hour customer service and fast response time helps Dell build strong customer relations, which of course is crucial for the company in its understanding of consumer needs. It is also a very cost-effective way of providing sales and support – cost savings which can be passed on in the form of better prices to customers.

Dell is focussed on enhancing its image and relationships, not only with customers, but also with employees and the wider community. To do this, the website is also used as a communication tool for news, press releases and general information to help customers, employees, the media and prospective employees find out more about the company.