Wednesday, February 4, 1998
Byte out of profits
ASUCLA: ASUCLA finds that competitors, on-line sales, cheap
catalogs are taking a
By Michael Weiner
Daily Bruin Contributor
One would think that cache, a computer’s immediate memory, would
be of great concern at the UCLA Computer Store. However, the main
issue for the financially strapped store is not cache, it’s cash
… or more importantly the lack thereof.
UCLA Store computer sales for the fiscal year, which began in
August 1997, were down $622,000 from what was budgeted.
That constitutes a sales loss of $200,000 in the month of
December alone, compared to a loss of $38,000 in November.
"It’s by far one of our worst sectors in the store," said
Lung-Chi Lee, finance committee chair of the ASUCLA Board of
Directors.
But Rich Delia, ASUCLA’s chief financial officer, said that
although sales are down, the store’s contribution is only $6,000
below budget. Contribution equals total profits after operating
costs.
"Even though our sales were down, our costs were less than
planned," Delia said.
ASUCLA is currently working on solutions to rectify the computer
store’s financial woes. And although the store continues to be
profitable, something will have to be done if the store is to
remain able to compete in a very competitive market.
"We have not firmed up our strategies yet," Delia said.
"(The store) is profitable, but we are concerned about the sales
decline," he continued. "We have to look at what we can do to stop
the erosion of the sales."
Lee said that a possible solution is concentrating on areas in
which the store does well, such as educational software.
"Otherwise, I don’t think we can compete," he said.
The computer store recently added two new lines. One is the
high-quality Compaq Presario, and the other is a Toshiba computer
which costs under $1,000. So far, these are the only additions to
the computer store’s selection.
"We’re going to keep working, but there’s nothing concrete today
beyond the Compaq and Toshiba," said UCLA Store manager Carol Anne
Smart.
Smart hopes that these additions will boost sales in the
computer store.
"Where it makes sense, we are trying to increase the PC side of
the business," Smart said.
IBM compatible computer sales have been a problem area because
these distributors have been reticent to deal directly with college
stores. Instead, the UCLA Store has had to go through an
intermediary in order to obtain those lines, Smart said.
"The PC manufacturers have not wanted to have a direct
distribution channel to college stores," Smart said.
The computer store’s financial problems stem from a variety of
areas. One of these areas is competition from chain stores such as
Best Buy and CompUSA.
"We can’t really compete because of all the big megastores," Lee
said.
Another problem is the increased success of mail order and
on-line computer sales.
"The whole computer store business is doing really poorly
because of mail order," Lee said.
Historically, the computer store has not matched their prices to
outside vendors, which Lee feels is a main contribution to the
store’s problems. But Smart said that the store will be able to
begin matching prices on some lines.
A high level of customer service is one of the points on which
the UCLA Store prides itself.
"We offer a level of service for UCLA students, faculty, and
staff that is unparalleled," Smart said.
"Our goal is to offer a competitively priced product with
superior service," she continued. "We know we’ve got the superior
service point down, and we’re trying to get the competitive price
point down."