Beginnings of Dell Computers

University of Texas freshman Michael S. Dell began selling IBM-compatible computers from his dorm room in 1984. Using parts he purchased at wholesale prices, Dell built the machines to closely resemble IBM models and then sold them to PC users looking to avoid the prices typically charged by computer retailers. Realizing that the $80,000 per month he brought in could easily be transformed into a full-fledged business, Dell left school and founded Dell Computer Corp. in April of 1984. Believing that more experienced computer users would likely recognize the value his custom-built machines offered, Dell began placing advertisements in computer magazines. People used an 800 number to place orders that Dell would ship in the mail upon completion. Dell used no middleman, and the firm's direct sales model allowed it to price machines significantly lower than competing PC vendors.