how is dell so low?

By ripken204 · 15 replies
Feb 25, 2005
  1. does anyone know how dell can afford to sell their computers for so low w/ sumthing like 1000$ rebates? are they putting cheap stuff in them such as the power supply or motherboard, they are the only people that i have seen doing this, plz tell me what ur thoughts on this is.
  2. LMoore

    LMoore TS Rookie

    As far as i'm aware dell are so cheap because they are an internet-only company and don't have to spend thousands on keeping shops open etc, costs are minimised and therefore their products can be offered cheaper.

    Everyone wins.

    I do not think cheaper components are used, Dell certainly have not made the mistake that Tiny did and made computer from bits they found on the floor.

    I have several Dell systems and they all function fine.
  3. ripken204

    ripken204 TS Rookie Topic Starter Posts: 139

    actually the prices arnt all that good, i just recently got the latest dell magazine, b/c my dad has a dell, and the comps arnt all that good prices, xpecially the laptops, wow those r overpriced.
  4. isatippy

    isatippy TS Rookie Posts: 497

    Then why did you post. :hotouch:
  5. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,742   +422

    lol exactly.

    He created the thread about low prices, and then says they aren't that low. :confused:
  6. ripken204

    ripken204 TS Rookie Topic Starter Posts: 139

    what i dont get is how ppl are talking about them being good priced but after checking it out there not
  7. AtK SpAdE

    AtK SpAdE TechSpot Chancellor Posts: 1,495


    Since we are talking about Dell...I hate them, well its more of a love hate relationship. BUt i must commend them, they sell PCs to our school for 200 USD a pop, and these are decent machines

    Pentium 4 @ 2.93 Ghz
    512 MB 3200 RAM
    1x 60 GB HD
    1x CD-RW

    Like i said not my favorite brand but the bring technology to our school for cheap so we dont have to use old P3 machines we used to have

  8. gbhall

    gbhall TechSpot Chancellor Posts: 2,431   +77

    It's the same in the UK (your mother-country folk!). Dell is cheep but generally very good. Probably economies of scale, internet only, cosy relationship with Intel and $ill $ates, expensive support charges, little or no in-house software development, efficient automated order processing etc etc
  9. StormBringer

    StormBringer TS Maniac Posts: 2,244

    Pretty much, as far as the actual systems themselves, one is as good as the other. Most laptops(and many desktops) from top manufacturers contain generally the same components. Some competing companies actually sell systems that are clones of eachother. The difference comes in with the service contracts. These companies make very little on the sale of the equipment(especially true of Dell) They make their money by selling the service contract.

    Only like 15% of Dell's customers ever call Tech support, and only around 10% of those ever need parts or service. I don't know the numbers for other companies but am told that it is pretty much the same.
  10. gbhall

    gbhall TechSpot Chancellor Posts: 2,431   +77

    Mr Dell - is he an ethical manufacturer?

    Sorry for this long post, and you don't need to read it unless you want to know why Dell computers are so cheap. Also I have absolutely no axe to grind here - I am just reporting facts as I understand them from a British public broadcast a few weeks ago.

    Right.... Nokia, you probably know, is a major world supplier of all sorts of electronic equipment. They very seriously want to be an 'ethical' employer, which means they care for the environment, do not use toxic chemicals in their product or during it's manufacture, and wish to take the care and working conditions of their employees to a high level. They want these concerns to be strictly observed by all their component suppliers too.

    To this end, they sought and received permission from the Chinese authorities and the factory owners and management to conduct an independant ethical audit in a Chinese factory which makes all Nokia's chargers for mobile phones. Surprisingly, it was agreed this should be filmed - again by an independant company. The filming was supposed to be for Nokia internal training use, and they had almost unbelievably free access (until the penny dropped anyhow), but somehow or other it ended up running from 9 to 10pm on Channel 4 which is about the fourth most important British public broadcasting company.

    Now the most interesting points to come back to me from memory, are these.

    Virtually all the workers are young Chinese girls 17-22 years old. They work the hours they can get, often 10 hours with short breaks. If there is a breakdown, or a shortage of supplies or orders they don't get paid. They live and eat in a vast factory dormitory, mostly eight girls to a room. The food is contracted out, and bad enough that many girls go out and buy something as often as they can manage it. They are not allowed to socialise with the few men workers, and if they get pregnant they lose their job. The company freely admitted they do not have contracts of employment mainly because it would be illegal at the level of pay they give.

    The level of pay (assuming full overtime was available) amounted to roughly $10 per month, out of which their accomodation and meal charges were compulsorily deducted. The figures were substantiated from payroll printouts and you got the impression they had picked the 'best' weeks to show the visitors...just over £5 GB per month....less stoppages.

    Watching this film I was struck by the thought 'this is Victorian sweat-shops in a 21st century context'. The film never suggested anything, it just showed the facts, interviewed some workers and the (European) manager voluntered anything they asked. Until his company Mr Big (a German) got wind and phoned him to shut up a bit. A footnote said that since the filming much had improved, such as they now paid legal wages, had moved toxic chemicals away from the kitchens and so on.

    Now open your Dell PC and look at the labels on all the components. It says made in China, and possibly Taiwan, Korea and so on. That is the most likely reason that Dells are cheap - it's Capitalisim in a Communist regime that does it. You might care, you readers over the pond, to ask Mr Dell if he would like to be an ethical employer. I've nothing against Dell or all the other computer-makers who do exactly the same thing, it's just we all close our eyes to what cheap electronic everything really means around the world.
  11. leon phelps

    leon phelps TS Rookie Posts: 23

    Pretty funn last post. I was an importer of cables from China for a long time. I know of the sub-standard conditions and the willingness for the Chineese Govt to cover up the rights violations. When I visited, I broguht my own translator who was instructed to tell no one he spoke fluent Mandarin. Women would routinely camp out with children on their back to ensure they were to get work the next day. Made me really wonder if I wanted to be in the business.

    As for Dell, when you are big enough you can dictate terms with Chineese manufacturers. You can set price and payment terms. The rest of us little guys have to pay upfront and are slave to market pricing(if the owners of the plant have their car payment or mortgage due--my translator overheard my price going up for someones daughter going to college in the UK). On top of that, Dell offers horrible warranties. Tech support tells you to use restore disk more than 90% of the time. Restore=reformat just in Dell lingo. It is the users responsibility to backup. For 10-15% more buyers can have custom systems built with 3 year processor, three year hard drive, one year motherboard, lifetime modem and NIC cards. This is sure better than the 90 days that Dell gives.

    As it goes, we all know about AOL. Why would they be the #1 ISP? American consumers are not very bright. Same reason for Dell being the best.

    I forgot to mention that it is dificult to make a meaningful job soldering and crimping parts for computers. If you have ever done it for a couple hours, you totally understand.
  12. StormBringer

    StormBringer TS Maniac Posts: 2,244

    Just to toss some gas on this fire...

    In response to the cheap labor used to produce Dells, look inside every other computer, same labels, pretty much same components, just different case designs.

    In response to the warranty remarks, Dell, as well as most other manufacturers, offers up to four years service contracts, while sure, consumer tech support is crap, if you can manage to get a business relationship contract(employee purchase program or such), you get much better support, from American tech support people. You'll still hear restore/format from time to time because of legal reasons. Most OEMs can't legally support more than basic operation of OEM software(this includes OS as well as most other junk on the machine) And legally can't support any of the crap you add after you purchase it. How would MS like it if Dell offered free tech support for OS issues when MS charges a fee for the same thing? Backup, thats another legal area, if you lose the data, you could then blame Dell(or whomever was helping you back it up) Not many people are going to risk that, especially since lawsuits are so popular these days.
  13. zephead

    zephead TechSpot Paladin Posts: 1,569

    communists have rights now?
  14. leon phelps

    leon phelps TS Rookie Posts: 23

    I am not quite sure of why an OEM or other vendor or software cannot legally suppoort more than basic? I am open to a legal explanation. I always thought MS would offer OS support for a short time. Since you pay for a license from DELL, shouldnt someone offer OS support? We all know MS will pass you off with an OEM S/S and Dell offers no OS support. Another way Dell robbs customers. I am not sure how helping to save data would cause a lawsuit since reformatting definitely loses data. Wouldnt the first way be some way to keep some customers happy even if it worked 15% of the time? There are these new techincal thinggies called flow charts that when followed help even *****s manage risk. Too bad one couldnt be invented for poor OS's and support for software.

    Funny you would mention that Dell offers tech support contracts with a straight face. Imagine paying for reformatting advice. Paying extra for hardware that should be in warranty from the manufacturer is a noble idea. Paying per month for it is even dumber.
  15. StormBringer

    StormBringer TS Maniac Posts: 2,244

    Dell offers free software support within the first 21 days from invoice, after that you can get fee based support(just like MS offers) With the fee based software support you get more than just basic usage support(the basic usage is what you get with regular TS) But its basically the same support you'd get from MS. The problem is, rarely will a tech support agent refer you to software support because customers tend to get mad when they find out they have to pay for that support.

    The legal aspect of this is that OEMs pay MS a fee and agree to offer support for those copies, part of this agreement is that they must offer that support in similar terms as MS. How ould MS like it if OEMs started giving free support for OS issues when MS charges for it?

    Hmm, paying for formatting? I don't follow. You pay for a service contract so that if you need parts or service in that time, you don't pay for it. This might be a bad investment if you never have a problem but a HDD replacement pretty much makes it worth the price of the contract(if you ever bought a notebook drive, you know what I mean). The phone support is free during the term of the contract(and until recently, phone support was for the life of the system with Dell, and is still an available option with certain contracts)

    BTW, get the facts straight, the proper "Dell lingo" is Format/Reinstall, unless you have a Dimension or Inspiron sold after July '04(they have a PC Restore partition) all other Dell systems come with a Windows CD and a drivers disc, they have since sometime in the late 90's when they got rid of the zztop restore partition.
  16. Tedster

    Tedster Techspot old timer..... Posts: 6,002   +15

    You get what you pay for. Ultra cheap means they're really skimping on performance.
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