In the face of tough competition from large chain stores and mail-order catalogs, the Duke Computer Store still comes out on top.
In a price comparison test with Circuit City, Best Buy, and Micro and MacWarehouse, the Duke Computer Store consistently offers lower prices to students who are looking to buy a new computer. Macintosh, Dell and Compaq computers were the brands upon which the comparisons were based (see graphic).
Scott Seaman, the founder and manger of the Duke Computer Store, said that the store does a lot to make sure that it is competitive with the larger and more profitable retail distributors.
"Some of the things we do include," Seaman said, are "dropping our prices when our cost goes down, and not just when a 'retail' price change is publicized; purchasing at academic discounts when available; and shopping the distribution vendor market for the best pricing, availability and service."
Seaman attributes the University's competitive prices to special contracts with its major vendors, its practice of staying abreast of market conditions and continually evaluating its competitive position.
"We take advantage of the biggest discounts available [and] we manage our operating expenses effectively," Seaman said. "We are here to provide a service and not to increase new earnings for stockholders, as is the case with many retailers."
Seaman also said that during the past three years the Duke Computer Store has significantly lowered its prices and margins and will continue to adjust as necessary to meet the needs of Duke customers.
In addition to providing Duke students with the most competitive market prices, the Duke Computer Store offers a few other intangibles that major retailers do not. Currently, the store's staff has more than 50 years of combined experience servicing computers, printers, and software.
Furthermore, the products sold are tested extensively to work in the Duke computing environment and can be supported through the various resources available.
The computer vendors which were used in the comparison each have their own methods for determining the prices of specific products.
Jeff Lloyd, a higher education account executive for Apple Computers, said that one of the primary reasons for Apple educational discounts is that the company started its business in the educational market-part of their selling philosophy is devoted to making sure that educational institutions receive products at lower prices, he said.
Lloyd also said that Apple gives the University better prices than many other educational establishments because the campus computer store conducts business professionally and efficiently. Also, the University does a high volume of business with Apple thereby resulting in lower prices than at other institutions.
Lastly, Lloyd said that there is a group at Apple that makes sure that when price adjustments are made worldwide, schools like Duke will still have an advantage over other resellers in the market.
The Apple example serves as a contrast to Duke's agreement with Compaq, which is similar to contracts with other average retailers. Compaq, a company which distributes its products indirectly through resellers, has what is typically called a minimum advertised price that is extended throughout the computer market, Seaman said. This price is a company-established minimum price under which no reseller is allowed to sell. Therefore, the prices at which Duke sells Compaq computers are the same as one would find at a large retail store such as Best Buy or Circuit City.
Tommy Hines, a higher education sales representative for Dell Computers, said that Dell offers a standard two percent discount to educational institutions. If such an educational institution is a Dell Microcenter, which is an authorized reseller for Dell products, then an even greater discount can be passed on to students and faculty. Because Duke Computer Store is recognized as a Dell Microcenter, it is able to sell computer products at a discount greater than the standard discount.
The Optiplex line that Dell offers mostly to Universities also differs from the Dimension series offered in various computer magazines. Hines said that all Optiplex computers are network certified, unlike the commercial Dimension line, and they have a three-year limited warranty instead of a one-year, on-site parts warranty.
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