Apple extends custom sales

In a bid to become a more efficient manufacturer, Apple Computer said today that its reseller partners will be able to offer custom-configured Macs.

Beginning this month, customers will be able to walk into an authorized computer dealer and ask sales representatives for options such as larger hard drives and special graphics cards. The new program will initially apply only to Power Mac G3 models and will add other products later, Apple said.

More than 300 store locations will offer custom systems, according to the computer maker. The custom systems will not initially be offered at CompUSA stores, though an Apple representative said the company does expect to sign an agreement with the retailer.

Apple and other computer makers who mostly sell through retailers and resellers have been experimenting with ways to emulate the advantages of "direct sales" companies such as Dell Computer that market directly to consumers and businesses. So Apple began offering so-called build-to-order computers to customers purchasing directly from the company in November of 1997.

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At the same time, the company has tried to preserve the traditional model of utilizing the network of resellers known within the industry as "the channel."

But mainly computer makers are trying to combat the inventory problem that arises whenever sales grow more slowly than expected or certain models don't sell. Direct sellers are better positioned to minimize inventory buildup because they build systems precisely when the consumer orders them.

"Customer choice is one issue--that's a big philosophy and strategy here. The [other] side of that is we are driving the channel to carry low levels of inventory," said Mitch Manditch, senior vice president of worldwide sales with Apple in a recent interview with CNET News.com regarding Apple's sales strategies. "We want the most recent technology reaching customer's hands as it comes off the manufacturing floor."

Retailers who sell Apple products say the strategy is not without risk.

"Apple doesn't have to do it to control inventory," said one manager of a large Mac-only sales outfit who wished to remain anonymous. Instead, the company could tighten inventory control simply by giving dealers only 14 days of "price protection" instead of the current 20 days, he said.

Price protection is the practice of offering dealers money back on systems sitting in inventory that were purchased before a company cuts prices on the systems.

"With build-to-order, they take inventory out but then they might have customers complaining about not getting product quickly," he added.