Technology History | One Dell Way — Thirteen Days of Stock and a Million Dollars a Day Online

Dell put a storefront on the web in July 1996, and the number that mattered came from its own annual report rather than from any launch announcement. In fiscal 1997, the filing says, the company began selling through an internet site at dell.com, which by year end was generating sales in excess of $1 million a day. That year ended on 2 February 1997, so the million a day was reached inside roughly seven months. Secondary accounts vary between six and seven months, and the difference is only whether they are counting from the launch or to the calendar year end. Selling online was a smaller leap for Dell than for anyone else in the industry. The order-taking machinery already existed: telephone sales staff, a configuration database, a factory that built nothing until an order arrived. The web replaced the operator, not the business. Compaq, Hewlett-Packard and IBM had the harder problem, because each of them sold through dealers and distributors who would read a direct website as their manufacturer competing with them. The same annual report shows what the model did to the balance sheet: days of supply in inventory fell from 31 to 13 over the year, while sales grew 47 percent to $7.8 billion. Thirteen days is the whole argument. A company holding two weeks of parts is exposed to a component price fall for two weeks, while a company holding two months of finished machines in a dealer channel is exposed for two months. By 2000 Dell was quoting internet sales in the tens of millions of dollars a day. Nothing here is visitable, and that is part of the point of the direct model, but the address on the filings — One Dell Way, Round Rock — is a working campus you can drive past, and the sign is the one in this photograph. Photo: Tim Patterson, CC BY 2.0, via Wikimedia Commons.