STAPLES BUYING DELL INK BY THE BARREL

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STAPLES BUYING DELL INK BY THE BARREL

 user 2008-03-05 at 2:51:43 pm Views: 73
  • #21398

    STAPLES Buying Dell Ink By the Barrel
    Executives
    at Staples say their new deal with Dell is already paying off, but
    their focus for Dell now might be considered something of an odd
    strategy. Mike Miles, Staples president and COO, said this to analysts
    during Staples’ quarterly earnings conference call Tuesday:We’ve seen a
    steady ramp up in sales since the product launch as customers have
    shown strong interest. The combination of hardware, ink, peripherals
    and extended services plans makes Dell a winner for both sales and
    operating income.We’ve just started to shift the focus of our
    advertising and promotion to ink and toner consumables and expect these
    higher margin skus to continue their strong sales ramp throughout 2008.
    As the only retailer offering a full line of Dell ink we have an
    opportunity to drive substantial new customer traffic. Sales in other
    brands have not seen a material negative impact due to the successful
    Dell launch and we have planned a number of marketing initiatives to
    drive continues sales of Dell and believe this product line will be a
    big win for us in 2008.

    Printer ink hasn’t exactly been a
    product in Dell’s wheelhouse. In fact, judging by OEM numbers over the
    past 18 months from Lexmark – - which has listed Dell as one of its
    biggest OEM customers – - printers in general have been closer to a
    bust for Dell. The brick-and-mortar retail segment is a different
    animal for Dell, so maybe Staples’ strategy will work. But of all the
    areas for Dell to compete with rival Hewlett-Packard, whether retail or
    commercial, printers and consumables would appear to be much less
    favorable than other areas.