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Can my computer business be profitable?

watdahel

watdahel

Golden Member
I want to start a small business but I don't know if it can be profitable. Basically, my plan is to open a shop for custom building PCs. I can build a poor-man's PC all the way to the high-end stuff. Customers walk in to my shop and tell me what they want and I assemble the computer for them. They set the budget and I work around that. I do realize the majority of people are computer illiterate and won't know or could care less about the individual parts of a PC so I'll probably have to offer a pre-configured PC. I also live in NY where there's BestBuy or CircuitCity everywhere and they offer a lot of cheap PCs. People will buy them even if they're crap simply because they don't know any better. From what I can see my profit will be mostly from customers who prefer the high-end PC.

I offer all the tech support and all hardware comes with the manufacturer warranty as opposed to 1 year warranty that you would get with a branded PC. My profit will be a percentage of the sales.

Initially, I'll only be serving the local populace but I do want to go nation-wide with the help of a company website to promote my stuff.

What do you think?
 
i think there's too much competition out there for you to expect too much [nation-wide?]

ive seen a lot of computer stores go out of business lately... but where i shop for computers (downtown toronto) there is literally 15 computer stores on a 100 meter strip of road
 
unless you can get parts for next to nothing or offer something that any of the other 500000000 pc shops/companies don't, you won't succeed.
 
Of course. Any business can be profitable if you know what you are doing.

However, computers are a commodity item. (The general public sees them as all the same and therefore shops by price) It's very difficult to present yourself as a value added merchant in a commodity market.

That said, there are people in my po-dunk town who make a living doing it. They build computers and they sell parts to DIYers. I don't know if you could do it out of your basement but with the right storefront and a loyal clientele it's definitely possible.
 
Definitely won't work.

Why would they buy a budget PC from you if they can get one from Dell. And then their's the warranty from Dell as well.

You simply can't compete with the big name unfortunately.

Also, where are you going to buy parts from? Newegg and such? If yo're doing that, the only profit you could make would be from time/labor and not the parts, so you'll probably make only $50-$100 per PC if you're lucky.
 
there are tons of small computer shops in NYC buddy... and if i don't know anything about computer, i'd be damn sure to buy a computer from dell and the parts from bestbuy/circuit city. imagine if you don't know anything about cars... would you buy one from a licensed dealer or private guy?

tech support is also a problem. imagine the people out there serfing sites they don't really know and download "games" out of nowhere!

anyway, good luck.
 
A general computer shop where builds are a piece, maybe.

A build shop where other work is a minor piece, doubtful.
 
No way you would ever make money doing that.

The cheapest I buy components and software for a new computer is $450 *without a monitor*, which gives you the tower, keyboard, mouse, and a bare copy of XP Home. Remind again, that's the cost of the materials, does not include the cost of labor to put it all together, and the cost to support when a piece of hardware goes bad, and last of all the amount of profit that will make it worth while to build.

Now compare that to Dell that can sell an entire computer, XP Home, 17" crt, speakers, and printer for $300-$350.

The only way you can beat out Dell on cost is by selling a computer with all the frills. 2gb ram, 7900gt video card, 500gb hard drive - but how likely are you going to run into someone who wants that and does not know how to build it himself?
 
I work for a small shop right now and we are doing pretty good. We focus mainly on repairs, and eventually want to get into the HTPC market. However, I think most of our profit comes from building servers and setting up networks/servers for local businesses. Our main competitors are Best Buy(our prices are lower) and a company I used for work for, Intrex (they are located about 30 min away from us though).

Edit: we also sell alot of Dell remanufactured laptops and desktop and used laptop and desktops( refurbed by us).
 
Moms n pops shops come and go all the time. I've worked in a few.

You need a gimmick which makes yours special... ala Alienware.
 
Originally posted by: tfcmasta97
ive seen a lot of computer stores go out of business lately... but where i shop for computers (downtown toronto) there is literally 15 computer stores on a 100 meter strip of road
Click to expand...

The College and Spadina stretch. Also plenty in Scarborough and Markham.
 
Other than large chains selling them like Best Buy and Wal*Mart, the local shops around here have to buy P2/P3 based systems at auctions and sell them for $300 or so plus monitor costs, CDRW, etc. Basically you spend the same as you would at another store but get much less, they rape you on issues with the system as well, but I think lots of people like small shops like that where they know the owner directly.
 
Originally posted by: Schfifty Five
Definitely won't work.

Why would they buy a budget PC from you if they can get one from Dell. And then their's the warranty from Dell as well.

You simply can't compete with the big name unfortunately.

Also, where are you going to buy parts from? Newegg and such? If yo're doing that, the only profit you could make would be from time/labor and not the parts, so you'll probably make only $50-$100 per PC if you're lucky.
Click to expand...

Plus the cost of the OS enters in.
 
i've thought about something like this too, there's 3 computer shops within about 30 miles (not including Best Buy, etc.) but they are all VERY over priced.

Glad to know i'm not the only one who has wanted to try this!
 
Originally posted by: jadinolf
Originally posted by: Schfifty Five
Definitely won't work.

Why would they buy a budget PC from you if they can get one from Dell. And then their's the warranty from Dell as well.

You simply can't compete with the big name unfortunately.

Also, where are you going to buy parts from? Newegg and such? If yo're doing that, the only profit you could make would be from time/labor and not the parts, so you'll probably make only $50-$100 per PC if you're lucky.
Click to expand...

Plus the use of BT for the OS enters in.
Click to expand...

fixed 😉

 
Originally posted by: drpootums
i've thought about something like this too, there's 3 computer shops within about 30 miles (not including Best Buy, etc.) but they are all VERY over priced.

Glad to know i'm not the only one who has wanted to try this!
Click to expand...

:thumbsup:
 
I think you would be much better off by being a computer service shop. There is a lot better chance of success there rather than trying to compete with Dell.

You could still upgrade and build computers on the side, but it's hard to make money if that is your company's main focus.
 
Originally posted by: eelw
Originally posted by: tfcmasta97
ive seen a lot of computer stores go out of business lately... but where i shop for computers (downtown toronto) there is literally 15 computer stores on a 100 meter strip of road
Click to expand...

The College and Spadina stretch. Also plenty in Scarborough and Markham.
Click to expand...

I almost wet myself the first time I walked down that intersection.
 
Economy of scale. The same reason you don't see new car manufacturer. You will be lucky if you make the rent on your store front.

Anyone knows Bestbuy's breakdown on computer vs accessory sales?
 
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