CDW 2006 Annual Report Download - page 16

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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. 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 regarding product compatibility and other information.
Sales Activities and Order Fulfillment
Our success is due in part to the strength of our account managers’ relationships with customers
that are developed by calling existing and potential new customers, providing advice on products,
responding to customer inquiries, and developing solutions to customers’ complex technology needs.
Our account managers have in-depth product knowledge, are trained in Company philosophies and
systems, and are motivated to maximize gross profit and provide high levels of customer service.
New account managers are immersed in CDW Academy, our proprietary sales training program, and
complete an intensive sales consulting, product training, systems, and customer service curriculum.
Our sales force is organized based on various customer segments, including industry verticals,
geography, and customer size. We seek to build customer relationships by addressing customers’
unique needs in the various segments to order to maximize customer satisfaction and gross profit.
Each catalog and advertisement distributed by the Company lists a toll-free number and Web site
address to be used by customers in contacting CDW to place a product order. Once a customer
order is received, by phone, online, or by fax, it is processed for credit approval. We ship most credit
approved orders on the day the order is received. We generally ship products to customers by AIT,
DHL, Eagle, FedEx, United Parcel Service, and other commercial delivery services and invoice
customers for delivery charges.
Customers
We are not dependent on any one customer. For the year ended December 31, 2006, our
largest customer comprised approximately 0.3% of net sales and our top five customers comprised
approximately 1.3% of net sales. Our corporate sector customers are primarily small, medium, and
large size businesses that generally have up to 1,000 employees at a single location. We also serve
larger enterprise class customers which generally have more than 1,000 employees at a single
location, including FORTUNE 1000 companies, as either a primary or secondary vendor. Our public
sector segment focuses on meeting the technology needs of federal, state and local governments,
educational institutions, and healthcare institutions. Our Berbee segment serves a broad spectrum of
corporate, healthcare, education, and state and local government customers, including enterprise
class customers.
Our customers are located almost entirely in the United States. Approximately 2% of our sales in
2006 were to customers outside of the continental United States, primarily in Canada.
Custom Configuration and Technical Support
We offer custom configuration services such as the installation of accessories and expansion
products, loading of software, imaging for custom applications and configuration of network operating
systems. Custom configurations provide additional value to our customers because they reduce the
cost and time necessary to deploy new products into their existing technology environments. The
ability to configure products to customer specifications enables CDW to generate incremental sales.
In order to meet growing demand for configuration services, we have 24,000 square feet devoted to
configuration services in our Vernon Hills, Illinois distribution center, including an 8,000 square foot
enterprise configuration center for specialized configuration services. In addition, we have 25,000
square feet of configuration space in our North Las Vegas, Nevada distribution center used in
performing standard and specialized configuration services.