Dell Decision Underscores Value of Channel Sales

 Computer manufacturer (and channel player) Dell is in hot water after a New York State judge ruled the company was deceptive in advertising its warranty and financing policies. Essentially, Dell stands convicted of running a classic bait-and-switch scheme in New York State.

The company denies serious wrongdoing and says only a small number of customers were impacted. However, Dell, whose history is in direct sales, has already generated controversy in the channel, and this is certainly not going to help matters any. The company has been getting slammed. For example, the Ziff Channel Insider site takes Dell to task and notes that some of the practices may still be continuing. CRN's ChannelWeb site has published five steps Dell needs to take, including a public apology from Michael Dell. (Don't hold your breadth.)

Before publicly hanging Michael Dell & Co., it might be wise to see how many people were actually impacted, how much restitution will be ordered and what the company does about the public relations mess. (A Web site has already been established by the state for financial restitution.) So far, this has been big news in the New York area, but generated nothing but passing interest in the rest of the country. Seems to me it also points out the benefit of buying Dell (or any other brand) through the channel, since that avoids the perils of arranging direct financing and warranty service. Having a channel partner in the middle of the consumer and vendor is one of the smartest moves a technology buyer can make. 

Have channel partners experienced the same dififculty with Dell? Are customers turning to them for help? So far, there's no evidence of that, but it would be interesting to find out.

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