Dell Computers
, or just plain Dell is a company whose business model makes it’s turnover, the fastest in the industry. Less than a week in inventory which equals a very large number ! Well, how did they get to this staggering amount of numbers ?
Their reason is Buying Direct/Direct Business Model (DBM) .DBM is a model which enables the supplier (Dell) to bypass retailers who will charge them for renting space and others, and connect with the consumer more directly. The upside of this model is a lot of things, as mentioned by Mahesh Nagarajan, PhD:
1. Double Margin = Cutting our the middle men –> getting higher margins, the easier process to manage
2. Stronger Customer Relationship –> beter information and customer behavior is better captured
3. Reducing Variability/ Risk.
4. Customization –> giving customers what they want, builds loyalty and differentiation and therefore more revenue for the company.
In the end, this is what has made Dell more profitable in the long run, by using the model they are able to cut costs and increase their revenue.