Buy or build? Which is actually cheaper for a customer?

[diogenes571]

I am asked all the time to obtain computers for the best price and value. I can easily build systems for $100-$300 lower than the equivalent Dell/Gateway/HP/Compaq system. But the question is, is building it myself a better deal for the customer considering the warrantee and support offered along with a Dell/Gateway/HP/Compaq? I know it is better for me to build my own personal systems because I know I can repair them, but for other people, who I can't always be there for to fix problems--is it better to go with a traditional PC manufacturer?

Also, where do I get the best deals on OEM software for PCs I build? I can usually find the best price on Pricewatch, but it is still outrageous compared to the software I can find here in the For Sale/Trade forum. I want to get full, licensed copies of the latest Windows OSes and Office suites for my customers, but I don't want to spend $200+ per license (and it would be nice to be able to include media with the systems so that the user can reinstall if necessary).

 

[DDad]

Well, software is a Biatch, I've noticed that the "authorized" distributors have prices WAAAY outta line IMO- and if your not carefull you may well end up buying counterfit (I've found this out the hard way). To be honest I haven't figured out what the best answer is. As far as myself- most of my budget builds still use Win98 SE- reasonably affordable, still does everything, known problems are fixed.

 

[DN]

<< I am asked all the time to obtain computers for the best price and value. I can easily build systems for $100-$300 lower than the equivalent Dell/Gateway/HP/Compaq system. But the question is, is building it myself a better deal for the customer considering the warrantee and support offered along with a Dell/Gateway/HP/Compaq? I know it is better for me to build my own personal systems because I know I can repair them, but for other people, who I can't always be there for to fix problems--is it better to go with a traditional PC manufacturer?

Also, where do I get the best deals on OEM software for PCs I build? I can usually find the best price on Pricewatch, but it is still outrageous compared to the software I can find here in the For Sale/Trade forum. I want to get full, licensed copies of the latest Windows OSes and Office suites for my customers, but I don't want to spend $200+ per license (and it would be nice to be able to include media with the systems so that the user can reinstall if necessary). >>



Sounds to me like you answered your own question.. If the PC is for your "customers", you are SURELY better off going with a brand name PC for them so as to keep your sanity..

 

[DaveK]

I personally buy all of my OEM software from Directron. Good prices, good service.

Even with cheap software, if you don't have multiple people doing support for you, it'll probably be better to buy them a Dell or whatever.

DaveK

 

[DSTA]

I know it is better for me to build my own personal systems because I know I can repair them, but for other people, who I can't always be there for to fix problems--is it better to go with a traditional PC manufacturer?

I only build custom systems for friends (BTW, geek definition of friends: class of people that get free tech support ) for the exact reasons you mentioned. Only exception is when the price difference to the big manufacturers is real big, as with some "workstation" class computers. Some of the systems ATers use as private computers would mop the floor with commercial workstations, and that at half the price .

 

[ajskydiver]

Coincidentally, I just did an article on building vs. buying...

Regarding cost, it depends on how much the system is going to cost. Less expensive computers have very, very small margins...the software alone will kill a comparison.

BUT if you get in the higher priced stuff (+1500 and up)...you have more room to manuever.

I can give you solid #'s here because I just priced this system out.

It'll probably look like crap (it looked great in my document)...but the bottom line is that you can easily beat the retail, especially if you're not buying the software...and the retail system isn't as good (ie speakers and keyboard/mouse).

~AJ

Edit: It did look like crap...lemme see if I can clean it up for you.

_________________Retail Computer________________________Build
Motherboard:______Proprietary____________________________MSI K7T266 PRO2 113.00
Processor:________AMD Athlon XP Model 1900 (1.6 GHz)________AMD Athlon XP Model 1900 (1.6 GHz) 280.00
Memory:_________1 GB PC 2100 DDR SDRAM_________________Crucial 1 GB PC 2100 DDR SDRAM 173.00
Storage:_________100 GB 7200 rpm Hard Drive_______________Western Digital 100 GB 7200 rpm HD 215.00
________________16X CDRW_____________________________LiteOn 16/10/40 CDRW 84.00
________________3.5? 1.44 MB Floppy Drive_________________Included w/case
Video:___________64MB GeForce 3 Ti500____________________Leadtek 64 MB GeForce 3 Ti500 300.00
Sound:__________Sound Blaster Live! 5.1 Value_______________Sound Blaster Live! 5.1 Value 35.00
________________JBL Speakers___________________________Klipsch ProMedia 2.1 Speakers 150.00
Keyboard/Mouse:___Proprietary____________________________Logitech Cordless Freedom Keyb/Mouse 45.00
Modem:___________56K v90 Data/Fax______________________US Robotics 56K v90 Data/Fax 35.00
Network:__________10/100 PCI Ethernet Card_______________3COM 10/100 Office Connect 25.00
Software: _________MS Windows XP Home___________________MS Windows XP Home 95.00
_________________MS Office XP Pro_______________________MS Office XP Pro (Upgrade) 290.00
Case:____________Proprietary____________________________Enlight 7237 (300 Watt) 60.00
Support: 1 year parts/labor & 90-day Software Technical Support___Varies 1-3 Years (depending on product warranty/service)
Sub-Total:________2310.00____________________________________1900.00
Tax:_____________161.70______________________________________N/A
Shipping:_________50.00________________________________________50.00
Total:____________$2471.70___________________________________$1950.00

 

[ajskydiver]

It still looks horrible...but you get the idea.

and because everyone will question the prices....they're almost all from mwave, crucial, newegg etc. from the past week or so...the retail system is a Compaq---this isn't a system I'd buy or necessarily recommend...it was strictly to get a comparibly equipped retail vs build system.

Although it'd be a nice to have I'd change stuff here and there...but I started with Compaq and picked readily available retail items...

~AJ

Edit: To answer your question, you can easily beat prices of retail places...but should you...that would depend entirely on who you'd be building the system for.

 

[dullard]

Some thoughts:
1) I guarantee that the big companies get better prices than you do on their parts, they buy in massive bulk quantities (plus the shipping charges are often outrageous for individual orders).
2) Warrantees and customer support have value, however this will vary with each customer.
3) Are you including the cost of your time when you say you save $100-$300? If you charge a low price of $25/hour, then the time you spend finding the good prices and putting them together may far outweigh the money saved.
4) Building yourself will usually allow better customization: for example you might not want an IBM hard drive...
5) State tax can be free when ordering online, while you must charge state tax to be legal when you build a computer for someone.
6) The cost of legal operating systems usually eliminates any savings that you might get by putting it together yourself.
7) If your computer somehow causes harm or death (I know this is quite rare), do you have the insurance to pay for it? For example, a short circuit could potentally develop giving the user a nice 'shock'. I'm sure one $100,000 hospital bill will easily outweigh the $100 savings...

 

[Vegito]

I only build for myself now.. the problem is when there is problem, ie cpu fan died, ur not insured to pay for the fried processor.. and sometimes they'll just keep calling you for help and stuff.. not worth the hassle... it's good for yourself but not for friends or newbies...

 

[diogenes571]

<< 7) If your computer somehow causes harm or death (I know this is quite rare), do you have the insurance to pay for it? For example, a short circuit could potentally develop giving the user a nice 'shock'. I'm sure one $100,000 hospital bill will easily outweigh the $100 savings... >>



I doubt that a Dell or IBM would be liable for this either. They just put a clause in their EULA that states they are not responsible for this kind of harm/damage.

I just called MS and they said that a license with burned media is legitimate. That could save me a lot of money. But where can I find a place to buy licenses only that doesn't charge an arm and a leg? All I would need is a sticker with COA and product key, then I can make my own "recovery" CDs with OS and drivers included. I have a resellers license, so I can get bulk items without paying sales tax (I then must charge tax ).

 

[Alex]

build

 

[Mitzi]

I only build for myself now.. the problem is when there is problem, ie cpu fan died, ur not insured to pay for the fried processor.. and sometimes they'll just keep calling you for help and stuff.. not worth the hassle... it's good for yourself but not for friends or newbies...

Exactly!

My friend recently brought the parts to build an Athlon XP 1700 based machine. He wanted me to built it for him - I refused, however I told him I would be happy to sit over him advising on what to do but I did not want to build the machine and then be burdened with the hassle if/when something goes wrong. Anyway, in the end, after he build the machine it runs fine and he learnt something too!

 

[GregMal]

Did ya ever build a PC for a friend or relative??? Never, never again!!!!
Anything, and I mean anything, goes wrong (hardware or software) and guess
who they call??? YOU!!!
Now for myself personally...I'd never purchase a manufactured PC. Dell, Gateway,
Compaq....too proprietary. If you build one yourself you know what you're getting
with the knowing that if something goes wrong you've at least got a fighting chance
of fixing it yourself..........
Greg

 

[teddymines]

Good points.

How much is your time worth building and supporting? If you spend 40 hours ordering parts, installing hw/sw, downloading drivers, applying patches/sr's, resolving conflicts, etc, would that be better spent just buying a complete system? Just like roofing your house, you can do it yourself and save some bucks, or get someone to do it and avoid the headaches and risks and sunburn (and probably get it done quicker).

There is the balance of time spent, money spent, and expandability. Everyone's balance points will be different.

 

[grumm3t]

If you are building the system for someone, I would highly recommend buying it from a large manufacturer (Dell or VoodooPC) because when your 'built' computer breaks down, they are gonna turn to you, and are gonna bitch. Now I just forward people to Dell or VoodooPC (i can make recommendations on what thye should get) and they are usually much happier.

 

[ShallowHal]

Where's the fun in buying from the big guys? Would any of us be on these forums if we didn't have fun tinkering?

 

[azeker1]

I agree with most of the comments above. I only build for family and VERY close friends (BTW, love your definition of friend, DSTA! LOL!). The exception is if someone wants a specialized, custom rig with "best of breed" components and is willing to pay for it. Otherwise, it isn't worth the hassle for the reasons already mentioned. I do recommend on-site repairs and upgrades, though. This enables you to charge a reasonable amount for your services and make a reasonable profit because it is almost all "labor". It is easy to undercut the lack of expertise, inconvenience, time, and prices of the big computer "chain" stores that are often the only place home users and small businesses have to turn for system upgrades and repairs. The competition in this market and the possible profit margins are much more comfortable to deal with than trying to compete with the razor thin margins on mass-produced PCs with dirt cheap parts & huge OEM software license contracts. Sometimes, I also barter for these services. For example, my 'accountant' does my taxes for free and I upgrade/fix his system for just the cost of parts.

 

[Jfrag Teh Foul]

I tend to not like building a system for anybody that is not knowledgable about computers in the first place... reason is just as its stated above... when its broken, no matter whether its an actual legitimate hardware failure or a P.E.B.K.A.C. (Problem Exists Between Keyboard And Chair) issue, its still you that they call. And after a few trips to who knows where to turn the auto-hide off on the taskbar that "little Timmy" accidentally found you realize that the $200 or so bucks you made on the system is just simply not worth the trouble of a newbie user.

Money Made On Building A System For Someone: $200.00

Look On Your Face After You Have To Drive 6 Times To BFE To Fix A "Little Timmy" Type Problem: Priceless

 

[dullard]

<< For example, my 'accountant' does my taxes for free and I upgrade/fix his system for just the cost of parts. >>



Just make sure your 'accountant' and you both pay the applicable income taxes for your services. Just because you trade goods instead of cash doesn't mean you didn't get paid for your services. Or, you could forget the taxes and hope the IRS doesn't see this thread...

 

[diogenes571]

I agree with many here that buying is the way to go to save on headaches and frustration (not to mention time and money). So now I ask you, where to buy? Should I just locate the hottest deal on a current Dell or IBM? Should I look for a good refurbished deal? If Dell ever has another server deal, I know even I would want to be in on it. But other times, the deals are not so hot at Dell.com or anywhere else. I guess I should let people decide for themselves what they are willing to spend and not worry about saving them some $s.