Selling computers - is it worth it?

[shamrin]

A couple months ago I got a call from a lady who wanted a second opinion on some work that had been done on her computer. Apparently she had caught a virus and the guy who repaired it had charged her $149 to remove the virus. She felt she had been ripped-off because this same guy had originally built the computer for her 2 or 3 years ago and she thought he should stand behind his work and not have charged her.

This illustrates my concern about selling the odd computer. I have a customer who wants me to recommend or supply her with a new computer. Regardless of whether I build the computer myself or source it, I can't imagine I can get more than $50-$100 margin out of it. This is scant profit for a perceived lifetime of support that I think an average customer will expect.

I am curious if others have solved this, been bitten by it or if most people just avoid it altogether.

 

[ITTech]

No one offers support on a computer without warranty. Most of the warranty usually covers hardware and no one wants to take the liablity for the software (and corruption of their DATA). This is the policy for every company out there that sells computers (Dell, HP, Best Buy).

So when you sell the computer you have to educate the customer on what is covered in the warranty and how long. If we were all offering services for 2 - 3 years on hardware we sold we would go out of business!

The user could get a virus at anytime (minutes or hours) after you repair their computer. It all depends on how the end user is using their computer, and you can not be held liable for it.

I have stopped selling computers / laptops. I focus mostly on service. I can make more on service. I also dont have to tie up thousands of dollars on inventory. I let them buy the computer from best buy and I do all the services for half the price on new systems.

 

[Alan22]

I have stopped selling computers / laptops. I focus mostly on service. I can make more on service. I also dont have to tie up thousands of dollars on inventory. I let them buy the computer from best buy and I do all the services for half the price on new systems.

Same here.....mostly. I stopped building computers quite some time ago. The only time I sell a computer is when I see a great deal I'll purchase a handful and sell them to clients I know well. Most of the time I'll offer purchase assistance and setup service. I charge for each, either individually or as a package.

 

[Alan22]

Don't discount the value that purchase assistance has. It can be quite a difficult experience purchasing a new computer. I've had people tell me that they've spent hours looking for a new computer and don't understand all the terms - dual core, core 2 duo, core 2 quad, celeron, i7, i5, sempron, phenom, athlon, megahertz, gigabytes, gigabit, ddr2, ddr3, 32-bit, 64-bit, lightscribe, dvd+/- rw, dual layer, blu-ray, 5.1, 7.1.....etc. Then there's providing advice on whether their existing peripherals will work with a new system.

Trust the somewhat knowledgeable & high pressure sales clerk? I think not. Spend an hour with a client configuring the proper system and they very much appreciate it. I find that providing purchase assistance + setup service is a better way to go.

 

[joydivision]

I never ever ever build computers for clients, there is no money in it at all.

 

[mekon]

I never ever ever build computers for clients, there is no money in it at all.

I don't agree. We sell about 7-10 desktops a week and make a good solid profit on them.
It also seems to tie the customer into you even after computer is out of warranty.
We have people who buy all sorts of things from us, even printer paper and blank DVD's simply because they bought their computer off of us.
You are always their first port of call when it comes to upgrading, repair or virus removal; I guess it works in much the same way as when people buy a new car they nearly always take it back to the garage they bought it from to be worked on.
I would agree that there is very little profit on laptops; we can actually make double the profit on a Falcon mobile office trolley than we make on the laptop that goes in it; which has to be crazy.
I also think that being a computer manufacturer (that's what you are in the eyes of the customer) gives you more credibility in the eyes of your customers.
There is no way on gods earth that I would employ somebody working from home on a mobile number to repair my fridge let alone my computer.
I think selling computers lifts you out of that league.

 

[shamrin]

Same here.....mostly. I stopped building computers quite some time ago. The only time I sell a computer is when I see a great deal I'll purchase a handful and sell them to clients I know well. Most of the time I'll offer purchase assistance and setup service. I charge for each, either individually or as a package.

How do you charge for the selection assistance?

 

[PCSupportGlasgow]

nope no cash in it.

Certainly if you have a business client who for example wants 20+ it beneficial as you have full control over specs and makes future admin easier then it is worthwhile but normal client nope.

 

[joydivision]

I think a lot depends on the market. Here in the UK Dell or HP can sell a PC in a retail store in a fancy shopping centre for less than I can get the parts for at my local suppliers with trade discount.

I just tell my clients where to buy the PC from and I set it up for them if they wish. I charge for advice sessions too. I can make as much money in offering advice than I can putting together a PC.

Also to compete with the big boys you have to cut corners on things like power supplies and RAM - something I am not willing to do.

 

[numnutz]

I guess I am in the minority here. I do not custom build laptops because of cost but I do build workstations and small servers. I am usually $100 plus more than the big named players and I always use high end parts. If someone wants a $399 workstation they wont get it from me but I will be glad to go onsite to fix it for them cause they didnt realize the warranty was depot to Chicago or CA...The only few in warranty issues I have ever had were a few power supplies. Which I replaced and got a new one back from the manufacter. My warranty specifically states hardware only viruses, malware and software conflicts of any kind are not included and I have never had an issue **knocks on wood**

And I enjoy putting them together beats working on someone else's 5 year old clunker and having to worry about something else going wrong with it 3 days after I repaired it

 

[dominexsus]

if the pc worth £500 i chagre custumer £700 and let him know it is not cheap but if anything goes wrong with in waranty either hardware or software i will come and make it all ok for him. so far no abuse. £300 covers my hole year maintenance. if no call means i double the profit. i sold 12 computers this way in 2009 and 1 this year. only thing i make sure using quality parts

 

[atlanticjim]

I stopped building computers many years ago when it just became unprofitable and the service calls were killing me.
I have built a few high end gaming machines but these are to customers who know that I am only giving them the expertise of a perfectly assembled machine. What they do with it after that is their own business and they don't call me unless they want a N/P or a hardware fix or upgrade.

I just cannot compete with the big guys.

 

[Alan22]

How do you charge for the selection assistance?

The same way I would for any service call. It's usually a flat fee and I already have something in mind before we meet.

Everything is ordered online whether it be directly from the manufacturer like Dell or HP, or from an online reseller like newegg, bestbuy, etc. I don't usually waste time going to the store & walking out with a box. For me that's a time waster. And I don't send the client to get it because many times they'll walk out with a different product &/or upsells they don't need.

While waiting for delivery I'll prepare everything necessary for the data transfer & peripheral installation. This also gives the client enough time to find their software media, license keys, stored usernames & passwords they forgot, etc. Works out great.

 

[Appleby]

I do not build computers for customers and wouldn't do it unless it was a very good customer, they needed something specialized, they understood they would be over paying and they knew I wouldn't warranty it.

However, want to know what almost 40% of my business was last year? Helping customers buy new computers and setting them up. When I started my business I told people that this was a needed service and I could make alot of money doing it. Surprisingly I was right about something!lol

Here's how it works..... Customer wants to buy a new computer and doesn't know what to get. 70% of my customers still think a good laptop cost $1,200 and a desktop cost $900-$1,000. I guess they've all been shopping at Best Buy. I then give them a ballpark of what I can find them a computer for, which is usually $450-$500 for a desktop and $550ish for a laptop. I offer to do a quick "consultation" about what they need in a computer, find out they will do with it, I find out if they need Office, Quickbooks etc. I find out what brand they like, don't like or if they even care. I explain the pros/cons of the different size laptops if that's what they are wanting. Then I go to Dell's Small Business site and price out the best deal I can find for them. If they want another brand I'll price that out too, but I don't go to brick and mortor stores bargain hunting or anything like that. I've only bought 2 non-Dell pcs for customers in almost 4 years.

I call them with the price and let them know what I've found. They say go for it, I order it. It bills to me, it ships to me and I unbox it, perform the out of box setup, create user accts., install an AV of their choice, install all Windows security updates and put it back in the box. I call them and they come pay me the actual cost of the computer and $75 as a "consulting" fee. It might sound like alot of work but it's really not any work at all. 15 mins consulting, 15 mins ordering, 15-20 actual work mins. setting it up and I'm done.

Here are some other tidbits of info....

I can rarely beat Dell's Small Business site when ordering a custom, name brand pc online.

I don't have to charge sales tax on the machine because it is paid at the time of purchase and I am only being reimbursed for the purchase. I contacted my state comptroller about this for clarification.

I won't pay for the computer up front unless I know the customer already or know them to be trustworthy. ie: you aren't walking in off the street and getting that offer.

I charge more for data transfer, installing other software etc.

I charge to come out and set it all up onsite if they like.

I am now "the" go to guy for so many of my customers when they want a computer. Residential and business customers alike just call me and say "hey I need a new computer, just get me what I need, don't even call me with the price, I know you'll get me the best deal".

I tell my customers, "I'm a tightwad who likes quality for the best price possible. I work for you, so I don't make a nickel more if you spend $1,000, my goal is to save you every penny I can." I prove this to them and they keep coming back.

I love it, it builds up a strong relationship with your customers and it leads to so much more business. I market this as "pre-purchase advice" and "computer purchasing help".

 

[Mushin]

In my opinion no.. unless you specialize in a particular area such as high end gaming machines.... That is of course if you like to build these types of machines.

Or another area.... Home Entertainment machines that act as a full media center... This could be quite profitable because of the built in need for someone to setup the equipment. So the computer actually becomes a gateway to the real money maker... the services.

In fact this is the trend for computer sales as an industry as a whole. Best Buy makes the majority of their money off the Geek Squad services. Regardles of you position on Geek Squad their business model for selling computers with setup services is strong.

If you are going to sell custom computers then you should package some type of setup service... remote support.... off site backup.... or ongoing support package with it... for a fee of course because this IS where you will make the money.


Also as someone else said... purchase support is a great way to help customers. The statment... I can advise you on what to buy and provide you with setup services for $129.99. With this I will help you pickout a computer, determine everything that you will need to go with it and setup and configure your new equipment. Plus I will help you move into the new computer by copying important stuff from your old computer to the new.

 

[shamrin]

I tell my customers, "I'm a tightwad who likes quality for the best price possible. I work for you, so I don't make a nickel more if you spend $1,000, my goal is to save you every penny I can." I prove this to them and they keep coming back.

That line really resonated with me, thanks for your detailed response.

Everyone's comments have been really helpful. It looks like just a few people are really able to make a go of selling computers.

I'll share my general take-away from this. I'm in the business of selling services, full stop (this may not be true for everyone here). If I take on selling hardware, it should be because it helps me sell those services in some way or it should be configured around those services. PC purchase selection and set-up are great examples of this.

Again, thanks to everyone who responded here, it's really helped clarify my thinking.

 

[PR Tech]

I agree with Appleby 100%. My shop has made better money in the consulting area of what product to purchase as well as after sales support. We unbox the system, remove the "crapware", run Windows updates and make sure the system is set for optimal use and install any software that was purchased for a client. We just cannot beat the prices at Staples right now. They are selling systems for cost and hoping to upsale other items at time of purchase such as a keyboard/mouse, software, warranty, etc. So...if you can't beat 'em, figure out a way to join them and still be profitable.

 

[gwilit]

That line really resonated with me, thanks for your detailed response.

Everyone's comments have been really helpful. It looks like just a few people are really able to make a go of selling computers.

I'll share my general take-away from this. I'm in the business of selling services, full stop (this may not be true for everyone here). If I take on selling hardware, it should be because it helps me sell those services in some way or it should be configured around those services. PC purchase selection and set-up are great examples of this.

Again, thanks to everyone who responded here, it's really helped clarify my thinking.

My business, like most others I suspect, just can't compete with big box stores. However when a customer wants a new PC / hardware upgrade I first find out what they want it for (their requirements) then match those requirements to a product (solution). When the product they buy does exactly what they wanted for their requirements they are happy with me.

This is where being a good business owner comes into its own. Knowing what the customer wants and advising perfectly is the key. If I were to make a mistake (e.g - customer wants to do graphic design work but I recommend a computer that has onboard graphics) then my reputation is gone, as well as losing the trust of that customer.

However when I recommend the perfect system for the best possible price the customer is usually happy. Then I get more business by setting up that computer, whether it be migrating data from existing computer or setting the computer up with A/V and F/W and on Wireless etc. I'm happy and so is the customer. They wouldn't get that from a big box store.

I then go away confident that should anything go wrong (which it usually does) I'm the first to be called without fail. Again securing further business.

The amount of people who buy computers based on price or some salesman not knowing why they want a computer in the first place is unreal and I often experience this. You never want to say to a customer why did you buy this or that etc, but both you and the customer know it was a mistake, but it's best to advise certain upgrades accordingly

 

[Appleby]

I agree with Appleby 100%. My shop has made better money in the consulting area of what product to purchase as well as after sales support. We unbox the system, remove the "crapware", run Windows updates and make sure the system is set for optimal use and install any software that was purchased for a client. We just cannot beat the prices at Staples right now. They are selling systems for cost and hoping to upsale other items at time of purchase such as a keyboard/mouse, software, warranty, etc. So...if you can't beat 'em, figure out a way to join them and still be profitable.

Amen! Funny you should mention Staples. I've never been a big fan, but they are the only computer/office store in our small town. I've been shocked at their recent pricing on good HP/Del laptops recently. The prices cannot be beat. Today I was looking at their Dell Inspiron 15" with 4GB RAM, Intel Dual Core, 320GB HD and Win7 Home Premium for $499. Spec out the same system on Dell's site and it's $600ish plus shipping. Amazingly good deals. However, I can still purchase this system, just like I would from Dell and set it up for the customer.

The thing I always tell my customers who are going to go buy their own pc is that they do NOT need all the junk that Staples, Best Buy or whoever else is going to try and sell them. I explain to them that I have no problem with those stores making money as they are entitled to do, but I want them to be armed with all the best info. They do NOT need a $99 version of Norton 360. They do not need a $19 USB printer cable or a $40 mouse. I can get them any of those things (or better ie:not Norton) for much less. Again, I'm being paid a consulting fee for my knowledge, it is my RESPONSIBILITY to save them the most money, while getting them the most bang for their buck.

 

[manderso]

Don't discount the value that purchase assistance has. It can be quite a difficult experience purchasing a new computer. I've had people tell me that they've spent hours looking for a new computer and don't understand all the terms - dual core, core 2 duo, core 2 quad, celeron, i7, i5, sempron, phenom, athlon, megahertz, gigabytes, gigabit, ddr2, ddr3, 32-bit, 64-bit, lightscribe, dvd+/- rw, dual layer, blu-ray, 5.1, 7.1.....etc. Then there's providing advice on whether their existing peripherals will work with a new system.

Trust the somewhat knowledgeable & high pressure sales clerk? I think not. Spend an hour with a client configuring the proper system and they very much appreciate it. I find that providing purchase assistance + setup service is a better way to go.

Do you charge by the hour for this service, or a set price? I have helped a lot of people in the past, and think I should start charging for this, but I don't know how.
Thanks.