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View Full Version : Buying hard ware from customers


Big Jim
11-11-2011, 05:32 PM
As you may or may not know I have recently started my shop and I wish to start bying and selling 2nd hand computers/laptops

I am thinking it might be wise to get the customer to sign some sort of paperwork to reflect that I have given them cash for their laptop/phone/whatever.

What process do you guys follow who do this and have you got an example document I can steal/copy/butcher

Thanks
James

RichmondTech
11-11-2011, 06:46 PM
I tell my customers that I don't assign a monetary value to their old junk. I am not going to haggle with someone over an old computer just to squeak a few dollars profit out of it when I go to resell. Since I'm upfront about my position of not paying for their junk, if they want to give it to me and I'll recycle it that's great. If they want to hold onto their paperweight that's great too.

No paperwork. Haven't had a problem yet.

Cadishead Computers
11-11-2011, 06:49 PM
Pretty much what RT says. Although I occasionally do buy a pc / laptop from a client. In saying that, though, they have to be a pretty good spec, and not over 3-4 yrs old, before I will entertain buying it.

Ensure though, when you are buying anything from any client, you have some paperwork, if only for your accounts.

Styxbound
11-11-2011, 08:09 PM
I'd just add always get a receipt and avoid anything which "smells" as to ownership. There's a lot of hot property out there and you don't want to get involved in any of that. A lot of people won't buy from walk-ins and that's probably the safest course; instead find sources like state and county auctions, ect..

nesrinamb
11-11-2011, 08:49 PM
I have a recycling and refurbishing program set up. I never pay for used computers. I have had people try to sell me things which are junk and they want $100 even though the PC is 4 years old and the screen is broken.

JAG Computers
11-11-2011, 09:25 PM
I have a recycling and refurbishing program set up. I never pay for used computers. I have had people try to sell me things which are junk and they want $100 even though the PC is 4 years old and the screen is broken.

I hate shopping on ebay for broken computers. Many sellers want to charge $100 or more for a broken computer. The thing is not worth that.

Plus when they say things like "the computer works just the screen is broken".
Then the computer is broken! Grr.

Big Jim
11-11-2011, 11:49 PM
Pretty much what RT says. Although I occasionally do buy a pc / laptop from a client. In saying that, though, they have to be a pretty good spec, and not over 3-4 yrs old, before I will entertain buying it.

Ensure though, when you are buying anything from any client, you have some paperwork, if only for your accounts.

Part of the reason I assumed I needed paperwork was this and also so that they dont (in an extreme case) go and report the laptop stolen themselves.

Something simple that they sign to state that they are selling to me and the computer is becoming my property and that it is in fact their property to sell so that should it turn out the kit is stolen I would only have it taken off me and no further action would be taken legally (I do plan to be careful about this obviously if I smell a rat I wouldn't be handling it full stop)

The reason for my question is I always planned to do this and I am in fact buying a laptop off someone tomorrow morning.

I may not get paperwork ready in time however.
I was only doing this mobile last year and I did take 2 laptops off people, one I paid for with no paperwork and the other I took as the customer didn't want to pay his bill instead chose to give me his laptop.

Thanks
James

gikstar
11-12-2011, 12:02 AM
If time is of the essence, why not just use your receipt book. Just make sure you include everything about the computer (including serial number) and the person selling it to you.

For tax purposes, if you are concerned about that, you will want to have a record of what you paid for the item to offset what you sold the item for, thus your net profit.

tobey
11-12-2011, 03:45 AM
This is what a bill of sale is for, there are tons of templates available online. This one for example: http://www.sampletemplates.org/computer-bill-of-sale-template.html

DanF
11-12-2011, 08:38 AM
What I do is take note of the unused hardware clients have. I have a special list for this (just a spreadsheet with the client's number, part details and the date inputted). This comes handy whenever I am working on an old computer and require a specific part (ie. CPU). Usually you can't find this from distributors so I simply check the list and contact the client to check if they still have the CPU.

My advantage is that the island I live on is very small, so I'd simply test the part and if it's not working I would return it to the client and get the money back. Never ever had problems. Must be the way I work cause I don't accept new clients if I don't manage to satisfy their needs, so I have a small client base of LOYAL clients. So dealing is not a problem.

This came handy quite a few times.

Tony_Scarpelli
11-12-2011, 07:11 PM
Put a Recycle poster in your window and then just receive the stuff for free.

If someone thinks their stuff is worth something they will ask. I never buy workstations or servers but I do occasionally buy a laptop.

Fix all the stuff abandoned in your shop and sell it. You will never have more than $40 in it and you can sell it from $199 or more.

I do not transact any paperwork.

Cadishead Computers
11-12-2011, 07:21 PM
Put a Recycle poster in your window and then just receive the stuff for free.

If someone thinks their stuff is worth something they will ask. I never buy workstations or servers but I do occasionally buy a laptop.

Fix all the stuff abandoned in your shop and sell it. You will never have more than $40 in it and you can sell it from $199 or more.

I do not transact any paperwork.

I agree with the recycle poster in the windows, good idea, I will implement this in the workshop.

Do you not have any paperwork when you purchase a laptop tony?

What about your accounts, how do you compensate for that?

If that happened in the UK, the inland revenue would have a field day. I.e. we could say we bought a laptop for 400, when we only gave 30 for it. They want paperwork for everything. I would of thought your taxation (sorry, I can't think of the name right now) people would of been the same.

Tony_Scarpelli
11-13-2011, 10:08 PM
I agree with the recycle poster in the windows, good idea, I will implement this in the workshop.

Do you not have any paperwork when you purchase a laptop tony?

What about your accounts, how do you compensate for that?

If that happened in the UK, the inland revenue would have a field day. I.e. we could say we bought a laptop for 400, when we only gave 30 for it. They want paperwork for everything. I would of thought your taxation (sorry, I can't think of the name right now) people would of been the same.

We do not keep any of our used, recycled or even bought refurbs listed as inventory (unless it was purchased through a vendor with an invoice/bill of sale then we treated as we do new computers). We list used stuff as scrap computer parts with little or no value. This is a similar handling to an auto salvage yard might record their salvage autos.

In the USA salvage laws specifically allow us to handle this type of property differently. The main advantage is that you do not have a large Cost of goods sold account for used inventory.

Much of the used inventory we get is as nice as stuff I might buy when I run low on used inventory. So what do I do, artificially value the stuff I get for free as dropped off salvage-recycled? I actually charge a fee for some of the recycled stuff to be dropped off and then turn around and sell it to other customers so the cost is actually a negative amount in some cases.

When we sell it, it just goes against a scrap parts account or miscellaneous acct used for the same purpose.

There are so many transactions that my accountant, nor IRS really care what I paid for them and what I sold them for. BTW the amounts paid for used customer laptops is .00009 % so it is not a significant amount to my sales volume.

I incur the scrap purchase expense when I make them, the same month, and I then assume the sales price is 100% profit just as if it were a service. So for example, I pay $30 - 50 for a good workable laptop and then refurb it and sell it for $199 or more. I do not carry the laptop as inventory. I expense the check I write for the used laptop as scrap parts purchased and then when I sell it It goes against a misc sale account.

I only bother matching costs of goods sold to new or near new products that I purchase from vendors that give me a Bill of sale.

Tony_Scarpelli
11-13-2011, 10:14 PM
AT the risk of complicating the matter I will try to explain it.

Option one:

buy used laptop from customer for $30. Put it into used purchase acct.

Then sell it for $200. When you sell it you recognize the income of $200 less cost of $30 for a gross profit of $170.


Option two:

buy scrap parts for $30. Recognize the cost of $30 that same month.
Next month sell the laptop with a zero expense value out of the scrap acct and realize a $200 profit. So the net difference is still $170 gross profit but if the purchase and the sale are in different months one month will be lower by the cost of the purchase and the next month will be higher by the same amount but the total gross profit is still the same.

We do not have a VAT tax so I am unsure what effects that will make.

You might inquire to your accountant or bookkeeper how an auto salvage is required to handle their salvage? Which is inventory of sorts to be resold or melted down and returned to steel mills.

PWD
11-14-2011, 12:43 PM
I do not buy Old computers either. Now if I knew I put $50 out and get $100 in I would think about it.

hope this helps.

Big Jim
11-17-2011, 12:38 AM
I only want to do it because there is money to be made.
If it turns out to be non profitable I'll knock it on the head.

A guy brings in a Dell Studio that needs a mobo replacing, I offer to waive his diagnostic fee (45) in exchange for the laptop and he wants 100 for it.
He is due back into the shop tomorrow to "see what I have said" (I wont be there) I explained to the lad that works for me to break it down for him.

Same or similar laptop on ebay for 400 with 12 month warranty
Same or similar laptop on ebay for 310 with no warranty

I can repair your laptop and probably get 350 for it
motherboard will run somewhere between 150 - 200, and also the lid needs replacing at a cost of approx 50, if I give you 100 that is 350 I have paid out + my time, where is my profit ?

I've a feeling he wont be leaving it with me lol.

carlitos31
11-17-2011, 05:38 AM
The max I pay is $50. Depending on the laptop, It sells between $150 to $275.
I sell around 5 to 7 a week. November and December are even better

Aescaepulus
11-17-2011, 05:42 AM
I participate in an E-recycle program, so when I install or set up a new machine for a client, after I transfer their settings and documents, I offer to take their old machine away to be recycled.

If they are good with that, I have them initial again the new machine receipt where it states that all of the documents and settings they wanted to be migrated are on the new machine as requested. I tell them that their data will be erased (I have actually used Darik's Boot and Nuke right in front of clients), and take it to recyclers.

I take the machines home and part them out for HDD, RAM, optical drives, PSU's, and monitors (only flat panel). If the machine is less than 4 years old, I look at installing Linux OS and upgrading the RAM and reselling it via the Nickel, or most often finding a needy child / family in the neighborhood and making an anonymous delivery.

When my girlfriend starts staring pointedly at the pile of carcasses in my office, I figure it's time to pile them up in the truck and haul them to the waste disposal facility, where I can dispose of e-waste for free. :rolleyes:

But to get back on point, if the customer wants to sell their machine, I tell them to try Craigslist. The reason I never buy used parts is that if I install used parts in another repair job (with the customers knowledge and consent) and that part dies during my warranty period, then I would be out of money twice, once for buying the used part, and again to buy new and replace that part under warranty. :eek:

Big Jim
11-20-2011, 12:08 AM
So does anyone have a form that I can use as a template for myself ?

Bit cheeky I know but I could really do with making sure the wording of the T&Cs is right.

Thanks
James