Gateway Goes Channel, Drops Online Sales

By Mark Hachman  |  Posted 2008-07-25 Print this article Print

Gateway is expected to announce plans to abandon online and phone sales and move to an indirect channel, focusing exclusively on retailers, e-tailers and channel partners.

Gateway will be 100 percent channel, ending online and telephone sales of its desktops and notebooks, the company tells PC Magazine.

The company is expected to announce July 25 plans to move to an indirect channel, focusing exclusively on retailers, e-tailers and channel partners, said Lisa Emard, a Gateway spokesperson.

"This change will dramatically simplify Gateway's business model and deliver significant cost savings, ultimately resulting in an improved value proposition for consumers," Emard said.

Beginning this weekend, the PCs and other products Gateway previously offered online and through the 1-800-GATEWAY service will be shifted to the company's channel partners, she said.

Gateway's relationship with the channel was once rocky. The PC vendor was famous for its family of retail stores the company opened in the late 1990s and early 2000s. But the stores, which competed with local and small and midsize business VARs, antagonized the channel. Competition from Dell's direct model forced Gateway to abandon the stores and embrace a more traditional direct/indirect channel blend.

The move aligns Gateway with Acer, which purchased Gateway in August 2007. At the time, some thought that the purchase indicated that Gateway had failed to develop a successful direct sales model. Instead, Emard said that Acer's business was built upon indirect channel sales, and that Gateway would now be aligned with that strategy.

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