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Message: <blockquote data-quote="dagger" data-source="post: 1473986" data-attributes="member: 279">We been kicking their butts for years in the US (and especially the rest of the world, thats why they closed a lot of overseas operations), and the Gateway stores have always been a problem for them. We use to laugh about it in meetings. Gateways business model is basically a copy cat of Dells business model. Anyway, the stores have always been a cash suckage for them with very little return. They should have just stuck with internet and phone sells like Dell does. I guess they finally realized that the stores sucked in terms of profit, and since they purchased E Machines, they figure they don’t need the stores for the extra distribution anymore (or so they said). Dell's and Gateway's core business model is actually highly profitable and successful. Here is why:1) No inventory (ie Build-to-Order)......this in itself has MAJOR advantages over major competition like IBM and Compaq (which is why Dell beats them in market share every single year). Build-to-order means that they don't maintain months of aging and expensive inventory (you got to pay tax on inventory folks). Also it means you can get the latest and greatest technology into new computers much faster.  2) Not having pre built systems means each customer can uniquely configure what they want in the systems (servers, laptops, etc).3)The build to order cuts out the middle man (comp usa, wal mart, best buy)! Thats why I never understood why Gateway kept those dang money suckage stores open. Dell does 50% of its business on the freaking web, you don’t need retail stores! 4) Computer component costs are steadily decreasing so it is not beneficial for a computer manufacturer to keep volumes of inventory in stock over a long period of time. For example, if you buy a Compaq computer from a store, it may have been assembled with components that were in stock for three or more months.  More than likely the Compaq computer will cost more than a Dell computer because its components were bought at their market price three months ago, whereas a Dell computer will cost less because its components will be bought at their current market price. I think Dell has a inventory time of 3 days at most for parts, which is unheard of in any manufacturing environment (not just computers). Not sure what Gateway it, but im sure its close. And NO im not a fan boy of Dell. Compaq has copied the Dell model somewhat as well. Even Ford and Toyota have begun to plan to change over to a more direct model based on Dells model. GM is testing a model based of the Dell way to sell cars in Taiwan.So after that long useless bit above let me say this for Gateway fans. They are better off without those stores (especially stock holders)!</blockquote>

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