Discount Laptops - Case Study
 

DiscountLaptops.com Case Study

Executive Summary
The emergence of the Internet as a shopping channel has been both a blessing and a curse to the personal computers market. On the one hand, more people than ever are able to shop for and purchase new computer systems. At the same time, competition among retailers for consumer mindshare and dollar has increased dramatically. As a result, sales revenues for the industry as a whole are up, while profit margins are at an all-time low.

Directive
Find a way to continue to meet performance and service goals through their website and eBay without dramatically increasing the cost of doing business
Systems Replaced
Conventional desktop tools, such as Microsoft Outlook and Intuit QuickBooks
Project Results
Tripled the volume of products sold, Company sales have grown by 250 percent, from $1.8 million in 2000 to $4.5 million in 2003, without adding headcount
ROI
6 months
“Thanks to CORESense, we won’t have to add another body until we get to $7 million. That’s a problem I look forward to having.”
Matt Richards
President, DiscountLaptops.com
That said, given the large and still growing population of potential buyers, there remains a sizable opportunity for the most innovative retail businesses. Those that are thriving despite the intense competition have found a way to maximize the efficiency of their retail business operations, such that order volume has increased while costs have not. For many, the key to success has been a comprehensive, integrated retail management system software solution.

Based in Las Vegas, Nevada, DiscountLaptops.com sells a complete line of high-end notebook computers to consumers, universities and Fortune 500 companies. Founded in 1996, the mission of DiscountLaptops.com is to provide customers a reliable source of quality, high-powered laptop computers at very competitive prices. The company's strength lies in its ability to bring to market the perfect combination of innovative mobile technology and high-quality service at a competitive price.

Three years ago, in the face of shrinking profit margins, DiscountLaptops.com founder Matt Richards was confronted with a difficult business question: how could he continue to meet performance and service goals without increasing dramatically his costs of doing business? One of the first places he looked for an answer was in his IT “department.” Matt was using conventional desktop tools, such as Microsoft Outlook and Intuit QuickBooks, to manage customer orders, communications and accounting activities. While these systems were satisfactory at the time, he knew they would not scale as his business grew. Matt quickly surmised that to reach his business goals, he would have to increase costs in the short term. In doing so, Matt was wagering that a more powerful technology infrastructure would enable DiscountLaptops.com to grow stronger than ever.

Fortunately for Matt, he found CORESense, Inc. CORESense offers a highly adaptive, web-based retail management system software designed for companies with multi-channel sales strategies. CORESense retail management system solutions automate every aspect of the sales process – including sales channel management, inventory and supplier management, order lifecycle management, customer relationship management, marketing and analytics – to help companies like DiscountLaptops.com increase revenues and reduce operating costs.

Three years later, Matt's gamble clearly has paid off. Since deploying with CORESense retail management system software, Matt has tripled the volume of products sold and company sales have grown by 250 percent, from $1.8 million in 2000 to $4.5 million in 2003. The increase in revenue was more than enough to offset the cost of the CORESense system after the first six months.

Perhaps more impressively, Matt has accomplished this dramatic growth without increasing headcount – not a single new administrative person has been hired since the CORESense retail management sysetm was implemented. Matt estimates that, were it not for CORESense, he would have needed one extra staffer the fi rst year, and one more in each of the subsequent two years. At $30 thousand each, the three-year, salary only cost of hiring these persons would have been $180 thousand. Of course these savings have a corresponding and positive impact on Matt's profit margins.

"The market for personal computers has matured and retailers can no longer compete on price alone. That's why CORESense is so valuable. It's allowed me to keep costs down, so I don't feel pressure to raise prices. By maintaining a competitive price structure, business has really taken off,” said Richards. “Three years ago my gross profi ts were approximately seven percent. Instead of going down, that number has actually increased since 2000. As a business, our goal is to do $6 million in sales in 2004. Thanks to CORESense, we won't have to add another body until we get to $7 million. That's a problem I look forward to having."

The CORESense Retail Management System has also helped DiscountLaptops.com to attain many qualitative business results. According to thirdparty web site resellerratings.com, DiscountLaptops.com has a perfect customer rating based on 110 independent reviews. Matt attributes this achievement to the ability of the CORESense retail management system to capture and manage customer data, such that every customer service representative has access to historical as well as up-to-date information.

"The tangible benefits of the CORESense system, such as increased sales and controlled costs, are evident,” noted Richards. “But the intangibles, including customer satisfaction, customer loyalty and customer serviceability, are of equal if not greater value."