Hardware Purchasing

[Greg M.]

Broad question, but how does your company handle hardware purchasing?

I often provide links for clients to directly purchase then I charge to configure. Larger jobs I will purchase, but often find it hard to expense (creating a billable expense to keep track of it).

Guess my main question is do you purchase the hardware for clients?
If so do you mark it up or have a vendor that gives you a discount on orders (I have yet to find one for small orders)?

 

[YeOldeStonecat]

When you first start out...and cash flow is barely started, it's hard. Once you get more and more clients, and some MSP clients or other recurring services...and you start getting cash flow, and you start building a history with wholesalers..and build a credit limit with them...it gets easier.

Our "official" policy....is that we'll require a deposit for hardware to be purchased above 2 grand. Depending on the client, if they're MSP or not, we often will order up to around 5 grand without a deposit. Have done more at times...if we know the client will pay fairly quick.

Yes..of course, mark it up. We shoot for ~20 margin.

When you first get started with wholesalers...your discount (wholesale price) may not seem like a lot, and you may be inclined to just get it from amazon or something. Resist that! As you build volume..and purchasing history, your discounts will get deeper and deeper. And typically free shipping (at least on orders above X amount). Stick in there..it's well worth building that relationship with wholesalers/suppliers...so stick in there..it's well worth it in the long run. Pretty soon you'll be purchasing hardware at true wholesale prices so when you resell them at MSRP...you get good profits.

 

[Mercenary Roadie]

I purchase everything from one of my distributors and mark everything up. This ensures that all warranties are valid

 

[GTP]

I do the same thing as @Mercenary Roadie just stated.
It takes a while to build rapport with suppliers but after you do, you'll find that they are an integral part of your business.
Bulk discounts, easy payment options (if your in a bind) quick support, friendlier when it comes to RMA's, cheaper freight etc The list goes on.
I have suppliers that I've used for over 20 years, in fact I'm still with the same company that supplied the first parts I ever bought!

Edit: Forgot to mention that having a good rapport with your suppliers helps when you order the wrong parts!

 

[Mercenary Roadie]

The worst jobs I get is when the client supplies the materials like cable and such. They always buy just enough cable to do the job which requires me to do multiple pulls instead on just one pull per location.

 

[Your PCMD]

I have just 2 distributors

 

[Mercenary Roadie]

I have just 2 distributors

I have around a dozen as they all carry different products. I also play them against each other for the best price and availability.

 

[AndrewFergus]

As we have a store front we carry $30K-$35K of stock between floor stock, PC's we build & repair stock. We purchase on account from the distributors and put 20% markup. All our distributors give us 20th of the Month terms so we buy up big at the start of the month.

 

[Greg M.]

Thanks for your insights.

 

[ElementalWindX]

Anybody want to name the distributors? I just stick to newegg. I really have never seen a benefit from other distributors, even if I spend $100-$200k with them in a year.

Like others said too you have to keep a list of them for the various parts. Most don't have a fancy website to look at the parts either. Plus I hate playing the "pit them against each other" game. I want the lowest pricing they can provide me.

 

[AML]

I think if i was an onsite service tech only I would suggest the client buys the parts, that way the price he pays is the price he can get. You dont need to worry about putting it on your credit card, warranty etc. They call you in when it is ready to install. Since we are a Brick and mortar we have dozens of suppliers and we mark up our prices; many times; just over the price of online purchases. This way a customer does not have to worry about RMA's etc. Now having said that we spend many ten's of thousands of dollars to our distributors. Our distributor prices are usually very good.

 

[HCHTech]

Anybody want to name the distributors? I just stick to newegg.

We use D&H primarily, then Synnex if D&H doesn't have what we're looking for. Provantage for server & networking stuff mostly. We'll go down to Newegg & Amazon only if we can't get the items elsewhere. Newegg especially has very unpredictable shipping. For Amazon, we try to stick only to items eligible for Prime shipping. We have a standard 25% markup, and rarely if ever go below that.

 

[ajgyomber]

Check out www.dllgroup.com. They offer 30-60 credit terms form the major distributors with no fees.