Sources:

http://hbr.org/1998/03/the-power-of-virtual-integration-an-interview-with-dell-computers-michael-dell/ar/1

Michael Dell (founder & CEO of Dell) talks about how he uses the direct business model plan which is the main cause of his success today. A direct business model consists of the suppliers, manufacturers and customers. It takes out many liabilities such as losing suppliers of a certain place; there is a liability in having a third party because sometimes they can bail or really screw things up since there is more than just one aspect of the business to worry about; same with the physical aspects, including a place to keep your inventory. With this plan Dell does not have to keep a place for inventory, rather they just order from Sony whenever they feel they need the certain amount of computers that they do, decrease risk in a huge liability. This plan is more efficient in my opinion because it lessens the amounts of things that can go wrong, and liabilities and risks go down. Instead of developing everything on their own, they take people who specialize in the aspects that they need and ask them to help. This also helps develop a stronger relationship between the customer and the manufacturer, which is likeable and can really help with customer service. Happy customers only spread their joy and are excellent at networking.