Gateway to End Its Online Sales, Shift to Retail Company Follows Acer into Channel, Retail Sales

by Mark Hachman

Gateway is planning to discontinue online and phone sales of desktop PCs and notebooks, and move entirely to an indirect channel model, the PC vendor plans to announce on Friday.

"We are planning to issue a news release tomorrow morning about Gateway's move to a 100 percent indirect model, focusing exclusively on retailers, e-tailers and channel partners," Gateway spokeswoman Lisa Emard said in an email Thursday night.

"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.

The shift will take place over the weekend, Emard said, and 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 products may still be found online, but only through the company's partners. The channels include Best Buy, Circuit City, CompUSA, Costco, HSN, Newegg, Tiger Direct, Office Depot, OfficeMax, Wal-Mart and many other retailers and e-tailers, Emard said.

It's a coming-home of sorts for Gateway, which was famous for its family of retail stores the company opened in the late 1990s and early 200s. However, Dell and its direct sales model forced Gateway to ditch the stores and their high overhead, and move back online. Only recently have direct sales vendors like Dell begun embracing the channel yet again.

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.

"This shift better aligns with the company's successful global strategy, which was built upon an indirect model," Emard said. "The company believes that its retail and e-tail partners offer consumers the best, easiest and most effective way to purchase Gateway products."

"This move also makes Acer the only top-tier PC company fully committed to the channel without a competing U.S. direct sales force," Emard said. (from www.pcmag.com)