CDW 2003 Annual Report Download - page 16

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Technical Support. Our technical staff is well-trained and maintains high levels of professional certification
from product manufacturers. We employ a technical staff of more than 140 with over 400 manufacturer
certifications to assist our customers with technical questions and issues during regular business hours. We offer
technical support services by telephone 24 hours a day, 7 days a week. We believe that our commitment to
service at the time of sale and after the purchase maximizes sales opportunities and encourages repeat
customers.
Information Technology. We use proprietary, real-time information technology systems which centralize
management of key functions and generate daily operating reports enabling management to identify and respond
quickly to internal changes and trends in the industry and to provide high levels of customer satisfaction. We
integrate our real-time systems with CDW.com, CDWG.com and macwarehouse.com, our Web sites, providing
real-time information for our customers.
Effective Inventory Control. Our management information systems, purchasing system, radio frequency-
based cycle counting system and use of vendor stock balancing and price protection programs allow us to
minimize our investment in inventory and to reduce inventory discrepancies and the risk of obsolescence while
meeting customer needs.
High Quality Coworkers. We strive to attract, retain and motivate high quality coworkers and provide our
coworkers with financial incentives designed to maximize performance and productivity. Our objective is,
whenever possible, to promote coworkers from within the Company to positions of increased responsibility.
Examples of rewards and motivations for our coworkers include short-term incentive programs, stock-based
compensation and an on-site childcare and fitness center facility at our Vernon Hills, Illinois headquarters.
Product Offering
We sell multi-brand computers and related technology products, including hardware and peripherals,
software, accessories and other products, for use with microcomputers based on a variety of operating platforms,
including Microsoft, Apple, Linux, Novel, Unix and others. Aggressive inventory management allows us to
limit our on-hand inventory and ship orders generally on a same-day basis.
We continually seek to expand and improve our relationships with manufacturers as well as increase the
number of products which we are authorized to sell.
Purchasing and Vendor Relationships
We purchase products for resale both directly from manufacturers and indirectly through distributors and
other sources, all of whom we consider our vendors. During 2003, we purchased approximately 53% of the
products we sold directly from manufacturers and the remaining amount from distributors and other sources.
We believe that effective purchasing from a diverse vendor base is a key element of our business strategy. For
the year ended December 31, 2003, purchases from distributors Tech Data and Ingram Micro each represented
approximately 15% of our total purchases. Additionally, in 2003, sales of products manufactured by Hewlett-
Packard comprised approximately 28% of our total sales.
Our marketing and purchasing staffs work together to identify reliable, high-quality suppliers of products,
then actively negotiate to achieve the lowest possible cost and expand vendor incentive programs. We seek to
establish strong relationships with our vendors, and employ a policy of paying vendors within stated terms and
taking advantage of all appropriate discounts. Several of our leading vendors, such as Hewlett-Packard, IBM
and Microsoft, have full-time product specialists on-site at our facilities.
We are authorized by manufacturers to sell via direct marketing all or selected products offered by the
manufacturer. Our authorization with each manufacturer provides for certain terms and conditions, which may
include one or more of the following: product return privileges, price protection policies, purchase discounts and
vendor incentive programs, such as purchase or sales rebates, and cooperative advertising reimbursements.
Vendors also periodically offer us opportunities to purchase a large amount of product at reduced prices.