CDW 2003 Annual Report Download - page 18

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newsworthy announcements, personalized access and customized two-way interaction that allows our customers
to check the status of their orders.
We continue to enhance our award-winning, customized Web sites, marketed as CDW@work and
CDWG@work extranets. These sites give customers online access to information such as order and shipping
status, payment details, purchase history and details about their dedicated CDW or CDW-G account team.
Customers may also use their sites to automate technology purchasing procedures, manage software licenses,
inventory asset-tagged items, reprint invoices and retrieve quotes prepared by their account managers. In
addition, we have, through our strong relationships with vendors, arranged for links between vendors’ Web sites
and our own. Many customers use the extranets to gather product information, including pricing and
availability, and then follow up with their account managers to access the account managers’ knowledge base
regarding product compatibility and other information. In 2003 and 2002, sales to customers with active
extranets, including online orders and those placed directly with account managers, totaled approximately $3.2
billion and $3.0 billion, respectively, representing approximately 68% and 70% of total sales, respectively.
Sales Activities and Order Fulfillment
Our success is due in part to the strength of the relationships our account managers develop with our
customers by responding to customer inquiries, providing advice on products, and proactively calling existing
and potential new customers. Our account managers are trained in Company systems and philosophies, have in-
depth product knowledge and are motivated to maximize gross profit and provide high levels of customer
service. All account managers are graduates of our proprietary sales training program which is part of CDW
University, our company-wide training program with colleges of specialization. New account managers are
immersed in the University’s College of Sales and complete an intensive sales consulting, product training,
systems and customer service curriculum. We seek to build customer relationships by generally assigning each
customer to the account manager who first serves the customer. Upon subsequent calls to CDW, the customer is
directed to its account manager for assistance. In the spirit of teamwork, account managers are encouraged to
cooperate and work together to maximize gross profit and customer satisfaction.
Each catalog and advertisement distributed by the Company bears a toll-free number and Web site address
to be used by customers in contacting CDW to place a product order. Telephone calls are answered by account
managers who utilize on-line computer terminals to retrieve information regarding product characteristics, cost
and availability and to enter customer orders. Account managers enter orders on-line into a computerized order
fulfillment system which updates our customer purchase history. Computer processing of orders is performed
immediately following the placement of the order and upon receipt of credit approval. We ship most credit
approved orders on the day the order is received. We generally ship products to customers by Airborne, A.I.T.,
DHL, Eagle, FedEx, FedEx Ground, United Parcel Service and other commercial delivery services and invoice
customers for shipping charges.
Customers
We served approximately 416,000 commercial customers for the year ended December 31, 2003 and sales
to our commercial customers accounted for approximately 98% of total net sales. We are not dependent on any
one customer. For the year ended December 31, 2003, our largest customer comprised only .39% of net sales
and our top five customers comprised approximately 1.18% of net sales. Our corporate customers are primarily
small and medium size businesses that generally have less than 1,000 employees at a single location. We also
serve larger corporate customers, including FORTUNE 1000 companies, as either a primary or secondary
vendor. CDW-G, which conducts the Company’s public sector business, focuses on meeting the technology
needs of federal, state and local governments, and educational institutions.
Our customers are located almost entirely in the United States. In 2003, approximately 10% of our net sales
were to customers in Illinois, approximately 34% were to customers in the eastern United States, approximately
20% were to customers in the southern United States, approximately 20% were to customers in the western
United States and approximately 15% were to customers in the midwestern United States (excluding Illinois).
Approximately 1% of our sales in 2003 were to customers outside of the continental United States.