Merisel shifts into high gear to get Windows 95 onto retailer shelves.

The dust has started to settle at Merisel Inc. following weeks of furious activity getting ready for the launch of Microsoft Corp.'s Windows 95.

The reason: El Segundo-based Merisel is one of the primary distributors of Windows. In other words, it was Merisel's job to get Windows to retailers in the United States to meet the much-ballyhooed Aug. 24 product launch.

Except for a few minor glitches, Merisel pulled off the job and, as of last week, had shipped 1.3 million copies of Windows to retailers or, as they are called in the high-tech industry, resellers.

By the end of October, Merisel expects to ship another 1 million or so copies in the U.S. of the software that Microsoft boasts brings personal computing to a new level.

Worldwide sales projections for Windows 95 range up to about 18 million copies by the end of the year. In its first week of release, Microsoft said, 1 million copies of Windows had been sold at a retail price of between $89 and $95.

"It was pretty hectic around here," said Dino Farfante, vice president of sales and operations at Merisel, a 3,000-employee, $5 billion in sales company that is a distributor of high-tech products. "Near the end, we were working long hours. But we started planning for this a year ago, so we knew what we had to do."

Warehouse added

To get ready, Merisel opened a new 70,000-square-foot distribution warehouse in San Francisco to exclusively handle shipments of Windows. (Merisel has seven other warehouse facilities around the country.)

At its 800-employee headquarters, a 16-person Windows 95 Team was formed to coordinate things. Exact figures were unavailable but Merisel hired dozens of new workers at its headquarters and the San Francisco facility. Among the newcomers at Merisel's headquarters were between 50 and 75 inside sales representatives whose job was to sell Windows to retailers.

When planning began for the launch, Farfante said, Merisel set up back-up systems upon back-up systems to make sure Windows got to the stores on time. The primary method of transporting Windows was by truck. But Merisel had back-up systems to use air freight, trains and other ground transportation in the event of a foul-up or something like a strike.

"I'm sure there are a few stores out there that didn't get their shipments right on time for the launch," said Farfante. "But for the most part everything has worked out."

Merisel acts as a product distributor for about 200 high-tech manufacturers, including Redmond, Wash.-based Microsoft. The products end up on the shelves of about 20,000 retailers in the United States. For the Windows launch, Merisel shipped the software to about 6,000 retailers around the country.

Peddling byproducts

In addition to Windows 95, Farfante said, Merisel is shipping many of the ancillary products that are being sold with the software. Those byproducts are new software to run with Windows and PC hardware equipment upgrades to accommodate the new operating system.

Microsoft is a longtime user of Merisel as a product distributor. The way the system works is Merisel buys Windows 95 units from Microsoft and then sells them to retailers.

Beth Wright, Merisel's director of software products and a member of the Windows 95 Team, would not reveal specific details of the arrangement. But she said Merisel buys each Windows 95 unit for between $75 and $80, and sells it to retailers for between $80 and $85.

"We're operating on a very low margin here. But you also must remember that a lot of our costs involved with the launch have been absorbed by our regular operations. This is what we do," she said.

Wright said she could not predict how much additional revenue the Windows 95 product will mean to Merisel. But she noted that it is by far Merisel's biggest single source of business in the history of the 14-year-old company.

Wright said in addition to actually shipping Windows, Merisel also offers sales training to retailers. That training will be extended to large commercial buyers of Windows 95 later this year when Microsoft shifts its marketing emphasis to businesses, said Wright.