If ordered part is dead who pays?

[RegEdit]

If you order a part for a customer and the part happens to be bad, then do you bill the customer for the extra shipping that you have to pay to ship it back?

I only charge customers the exact cost of parts, billed as "reimbursement". Maybe I should consider tacking on 5%.

 

[ljtechservices]

Are you selling the customer the part or your overhead?

yet another argument for having reasonable markups.

 

[RegEdit]

Are you selling the customer the part or your overhead?

When a part needs to be replaced I order it an charge them just for reimbursement. I do computer repairs.

 

[14049752]

You should be charging some mark-up, in my opinion. You have overhead associated with obtaining parts, and then providing a reasonable warranty on those parts. (OK, even if you don't warrant parts, you probably would still take care of a customer is something failed right away, right? That's overhead.)
Using your own money, even if you'll be paid back in a day, is overhead. Your time to order the parts and deal with shipping...that's overhead. All of those things are worth something, otherwise every customer could just go get their own parts and have us install them.

The idea isn't necessarily that you're making money on the mark-up. It's that you're covering your time and money. If you want to make a little extra on parts, nobody's stopping you from doing that, either. Plumbers, electricians, mechanics...basically everyone whose main job is service...they all charge a markup on parts because there is an overhead involved. Computer repair isn't any different.

 

[RichmondTech]

Eat the additional cost. It's part of the cost of doing business. Always markup a little to compensate for when things like this happen.

 

[jdpetrov]

Ideally, you order the part from a place that covers RMA shipping, so you'd be out nothing.

But you are definitely on the hook for the cost in your case. The customer paid for the part, and making them pay MORE for the same part because the first one was DOA, that's a bad way to treat the customer and a good way to go out of business with bad word of mouth.

If you can return the defective part and get your money back, you could actually cross-ship the parts, and even if you can't, sometimes you can cross-ship the RMA replacement part (Dell will do this for me when I fix Dell laptops still under warranty).

When I order a part, I take the total (part cost plus shipping) and do a 10-20% markup on the part. This gives me a little extra income and serves as a hedge against RMA shipping costs.

 

[gikstar]

Sounds like a flawed business plan to me... you should never have to go back to the customer as ask for more money. Put yourself in their shoes.

Can you imagine being hit with the cost of returning a 1500VA UPS unit?

Tacking on even 5% isn't enough to cover any cost over-runs or return bad shipping costs.

Depending on the client, we charge 15% to 20% and don't notify the client of any return merchandise unless it is going to affect the installation or completion of the project.

When I build a business class computer and install the hard drives in Raid1, I like to include in the build an identical third hard drive, the third goes into the computer case but not connected, to be used in case of a drive failure. Also, if one of the three drives is bad, I have a better chance of finishing the build. After the RMA comes it, I can deliver the third drive to the client. I will not charge the client for the RMA costs and will try to schedule the installation of the 3rd drive the next time I go to service his system.

 

[ljtechservices]

When a part needs to be replaced I order it an charge them just for reimbursement. I do computer repairs.

so do I.
but in the course of those repairs I sometimes have to replace parts.
I keep a stock of the most common parts so that I can have a quicker turnaround with the customer.

talk to your accountant. you are potentially throwing away a lot of money by getting reimbursed instead of selling outright.

 

[Xander]

I get all of my parts locally. There's a store nearby that has pretty good prices; they know I do repairs and I've made a point of telling them that I choose to bring my purchases to them. I might be competition but I'm the friendliest competition they've got
If I pick up a $50 HD, it'll be $56.50 with tax and I'll usually charge $65 to cover my time and gas.

 

[Appleby]

I've posted many times on this forum of how I operate when it comes to parts and my markup. I make good money on all parts but my customers never pay more than retail (ie: Staples prices). Since I make a really nice profit on parts, if I have to send a part back, I've usually made enough profit that it would cover any shipping fees I might incur. If it's a small enough ticket item such as a network card, modem, wireless card etc, I don't even mess with RMA'ing it. My time is too valuable to spend 30 mins to get my $12 back, plus mess with packaging and shipping back.

It's a cost of doing business and it's another great reason to spend your time finding good parts are really good prices and making a nice profit on them. It's how every other business industry in the US operates. Computer techs should be no different.

 

[MrUnknown]

I am with the "Eat the cost" crowd. Your client did nothing wrong and wasn't involved in the transaction and shouldn't be liable for anything.

I used to charge at-cost for parts I sell. I now usually mark up prices to cover problems like this that I used to have. Once a bad PSU killed all of my profit because it died just after the return period. Actually, I lost money in that case. Since then I make at least $10 or so on just about everything I sell.

I don't think people really care about markup. Sure, you may tell them that Kaspersky costs $80 in the store, but you are only selling it to them for $25, they will be happy you are saving them money. But they will be just as happy as you saving them $20 and you make more than you normally would.

 

[RegEdit]

Who do you all order from? TigerDirect? ZipZoomFly? NewEgg?

Once a bad PSU killed all of my profit because it died just after the return period. Actually, I lost money in that case.

Was this on a repair or a new computer that you built and sold?
For repairs my warranty on parts is the same as the part vendor's warranty. My labor however is covered for 90 days.

 

[Martyn]

I always charge a markup now, I never used to. Sometimes I would say to a customer 'you can buy that from xxx for xxx' and because they couldn't be bothered with doing it they would say 'would you buy it?'. Now I charge about 20% over to cover situations where sometimes you have to take the hit. Just recently I broke the ribbon latch on a small circuit board and it cost me £25. On the whole job I didn't make hardly any money but I was honest and told him I broke it. Since them I have had a further two laptops from him which did make me money. So taking the hit gave me more business and my honesty shone through.

 

[TopLevelComp]

The best thing I ever did was get ShopRunner.

http://www.shoprunner.com/

Free 2 day shipping, no minimum purchase, and return shipping is free.

 

[ljtechservices]

I order from D&H, Amazon, Newegg, tigerdirect, PartsNow!, feedroller, etc.

I normally only stock the basics:
1 each SATA & IDE drive of median capacity.
1 each PCI, AGP, PCIe video cards.
a few 100/1000 NIC's
1 each SATA & IDE DVD drive.
1 power supply
network patch cables.
a few keyboards and mice.
maintenance kits for a few different printers that the majority of my customers have.

I pick up odds and ends along the way. sometimes I order something I think i might need for a job but it doesn't get used. Like a molex to sata adapter cable I thought I would need according to what the customer told me about the model of PC. turns out there was one unused SATA connection. so it sat on the shelf for about a year till I used it for another client.
I just sold a 5 port switch that had been on my shelf for about 3 years. I picked it up off the discount rack at office depot and sold it just below the original MSRP. I warranted it for the length of the original warranty of 1 year because I knew that I could replace it for next to nothing.

I got a deal 8 years ago on some logitech ps/2 keyboards. 10 for $10. i eventually sold them all but one for $5.

Even though I was out of pocket some money for a while it didn't matter as I recouped it with a modest profit.

 

[Appleby]

Newegg and Amazon. Shoprunner and Amazon Prime is the best money I spend in a year. I can buy my parts from those two places 25-100% off Staples retail prices in most cases. I sell at Staples prices. My customers are tickled pink and I make money. Win win.

 

[RegEdit]

Amazon Prime for an annual membership fee of $79.
I don't want any membership fees.
TigerDirect just informed me that they pay for RMA shipping.

 

[MrUnknown]

Who do you all order from? TigerDirect? ZipZoomFly? NewEgg?


Was this on a repair or a new computer that you built and sold?
For repairs my warranty on parts is the same as the part vendor's warranty. My labor however is covered for 90 days.

This PSU was a Seasonic from Newegg.

It was a repair. I warranty all parts and labor for 30 days. It died on day 27. Newegg's RMA policy is that the item must be received within 30 days after purchase, of course it wouldn't get there in time. I had to purchase a new PSU, pickup the pc, install it and return the pc for free.

I won't purchase that type of PSU again. It was a OEM Seasonic, I still trust the Seasonic brand, but I can't say anything about their OEM ones.

 

[Drakester]

I would certainly not charge the customer, it is not their fault the part was faulty. You should be able to go back to whom you bought it from and get the shipping covered.

Drakester

 

[Appleby]

Amazon Prime for an annual membership fee of $79.
I don't want any membership fees.
TigerDirect just informed me that they pay for RMA shipping.

I don't meant this to be rude, I'm just asking..... You don't want to pay $79 for unlimited free 2 day shipping or unlimited next day shipping for $3.99? Find me another supplier in the the US that can match Amazon's prices and that will deliver my items with 2nd day shipping for free or next day shipping for $3.99 and no membership fees and I'll buy from them.

The speed of delivery in our business is huge. I stock most common parts that I regularly need but being able to order a part for a customer by 5 PM today and having it at my office tomorrow for $4 and getting one of the best prices on the net for the item....that's awesome. Sure I understand that if you aren't ordering many items the $79/yr fee isn't worth it. I've ordered almost 60 items from Amazon in the first 5 months of 2011, so it's well worth it for me. Plus I can order personal items too, it's not just business.