considering starting a custom PC building service in my local area

OOBradm · Oct 31, 2007

Okay, so my friend and I are consider placing an ad in the local newspaper for a custom PC building service.

here is a snippet from the ad which basically describes what were going to offer:

1) Customizing and designing a computer tailored just for you by understanding the intended purpose of your computer and considering your budget.

2) Order all parts for your new computer, assemble it, and install any software that you desire.

3) Deliver your new computer to your home or office, set up your computer at your desk, and make sure everything is running perfectly before leaving.

4) Also, feel free to call us within 30 days after we deliver your new computer regarding any questions or problems you may have in reference to installation and/or operation of your new customized computer.

Now, basically, i just plan on ordering the parts from newegg, tigerdirect, etc and then building the computer for them and charging a little over cost so I make some money.

My big concern is what about return/replacement policy. Is it going to be an issue with newegg if, say, something goes bad and my customer tries to RMA the part with the receipt with my name on it? I've also considered keeping all of my customers' receipts on file and if anything happens they can go through me for replacement.....

any thoughts on this?

AgaBoogaBoo · Oct 31, 2007

Start with the basic ideas - what problem(s) are you solving, why you will be able to do it better than others, why others haven't done it yet, and how you plan to accomplish it.

To run a proper business, just for estimation purposes, you need to sell at 2 times what the product costs you.

tranceport · Oct 31, 2007

repost.

This thread will end up with you realizing you cannot compete with dell.

villageidiot111 · Oct 31, 2007

Don't be surprised when your customers start calling you for support outside of the 30 day window, they will see any problem they have as your fault and your responsibility.

johnjbruin · Oct 31, 2007

If this was 1997 - I would say hell yes - go do it.

Today - I am saying - forget about it - its not worth it - your margins will be way too low to actually 'earn' anything.

OOBradm · Oct 31, 2007

Originally posted by: tranceport
repost.

This thread will end up with you realizing you cannot compete with dell.

link to original?

And secondly, I just checked newegg prices for a computer similar to one at the local BB, and I could build it for $400 less... with better parts....

And let me add, for a $500 computer, yes, the margins are so low that its not worth it. but for computers that are ~$1000, I've been noticing that I can usually build them for 100-200 less

BigJ · Oct 31, 2007

Originally posted by: OOBradm

Originally posted by: tranceport
repost.

This thread will end up with you realizing you cannot compete with dell.

Click to expand...

link to original?

And secondly, I just checked newegg prices for a computer similar to one at the local BB, and I could build it for $400 less... with better parts....

Are you willing to have several thousand dollars worth of replacement parts on hand?

Are you willing to be called at any and all hours of the nights?

Can you afford the insurance and legal fees if someone blames you for damages or one of your workers is negligent and destroys a system?

By going with custom builds, you're setting yourself up with having to have a lot of inventory on hand to quickly satisfy customers. They are not going to want to wait the two weeks it takes to RMA a part at Newegg.

You are also complicating things by having to have multiple drive images on hand. Are you really going to want to spend the time installing patches, fixes, software, and work-arounds each time a system goes down? If not, then you're going to need a system containing these images with redundancy and external backups. If you are, then your profit gets further reduced because you are now essentially working for free.

Whether you say 30 days or not, these people will hold you personally responsible for their computer's well-being.

One upset customer for a small business can spell disaster, especially since this is just going to be local. Who knows if you accidentally pissed off a community leader with a lot of friends and influence?

Also, forget about BestBuy. Can you beat Dell?

These are just some things you have to consider before going into this business.

trmiv · Oct 31, 2007

How do you plan on making money by buying parts retail and reselling them? What kind of value are you adding over a pre-assembled PC? Why would someone buy a PC from you and get 30 days of support when they they can get a year with say a Dell?

BigJ · Oct 31, 2007

Originally posted by: OOBradm

And let me add, for a $500 computer, yes, the margins are so low that its not worth it. but for computers that are ~$1000, I've been noticing that I can usually build them for 100-200 less

So you come out with a $200 profit. Figure 20 minutes for component install and then anywhere from 45 minutes to two hours (if not more) for applications and updates. You will absolutely require installation CDs with all the latest patches slipstreamed into it. It will save you many, many man hours.

Say you now have to spend time RMAing a part. That's going to take maybe an hour worth of work total. Now you have to go to the customers home and spend time installing that part and running testing to make sure it works properly. So including travel time, that could be anywhere from 30 minutes to two hours.

YOyoYOhowsDAjello · Oct 31, 2007

Originally posted by: OOBradm

Originally posted by: tranceport
repost.

Click to expand...

link to original?

OOBradm · Oct 31, 2007

Originally posted by: YOyoYOhowsDAjello

Originally posted by: OOBradm

Originally posted by: tranceport
repost.

Click to expand...

link to original?

Click to expand...

http://forums.anandtech.com/me...id=38&threadid=1272038
http://forums.anandtech.com/me...id=38&threadid=1892061
http://forums.anandtech.com/me...id=38&threadid=1890285
http://forums.anandtech.com/me...id=38&threadid=1873109
http://forums.anandtech.com/me...id=38&threadid=1817594
http://forums.anandtech.com/me...id=38&threadid=1782343
http://forums.anandtech.com/me...id=38&threadid=1621940
http://forums.anandtech.com/me...id=38&threadid=1455106
http://forums.anandtech.com/me...id=27&threadid=1106775
http://forums.anandtech.com/me...id=38&threadid=1454986
http://forums.anandtech.com/me...id=38&threadid=1208666
http://forums.anandtech.com/me...id=27&threadid=1121972
http://forums.anandtech.com/me...id=27&threadid=1115769

Short version: Don't do it

none of those links work...

Rogodin2 · Oct 31, 2007

If you have a career and you're going to pursue this venture part time it may work.

You will need retail storefront for such an operation and you will have to sign at least a two year corporate lease for $1300-$6700 per month for a decent location.

My impression is that you've not done any 'homework' regarding your idea. You really need to study both your target demographic and potential location.

Rogo

kinev · Oct 31, 2007

YAKTHCMMSCDTFTDCDIBFC

Skeeedunt · Oct 31, 2007

Originally posted by: tranceport
This thread will end up with the rest of us realizing this is a bad idea and you refusing to come to terms with reality.

Fixed.

Look into offering repairs/upgrades/spyware removal (IS YOUR COMPUTER SLOW WITH VIRUS??)/networking if you want to make some money. It's hard to beat pre-built and not worth the hassle (yours or theirs).

OOBradm · Oct 31, 2007

hmm, I was not expecting the pessimistic (or, maybe realistic?) feedback. I will further research this plan. I will consider what everyone has said.

YOyoYOhowsDAjello · Oct 31, 2007

Originally posted by: OOBradm

none of those links work...

Sorry, fixed them now. Those are all archived threads.

Pay attention to the start dates of them. Way back several years ago, there were some cases where it seemed like it might be a good idea, but with how low decent comptuer prices have fallen from Dell and the like, it doesn't make any sense anymore to do something like this for profit.

Epic Fail · Oct 31, 2007

30 day free phone support for any problem, you are a braver man than I am.

sandorski · Oct 31, 2007

You are entering the first level of Hell. Say "Hi" to Satan for us.

tcsenter · Oct 31, 2007

Originally posted by: OOBradm
hmm, I was not expecting the pessimistic (or, maybe realistic?) feedback. I will further research this plan. I will consider what everyone has said.

Hey, don't let us get you down about starting a business, let us prepare you for the realities of what you will be facing. That way, you can go into it with eyes wide open and maybe even tweak your business model or approach in a way that might avoid some of the pitfalls. It cost me several thousand dollars to learn what I'm about to give you at no charge.

In the $400 ~ $800 range, and the overwhelming majority of the market is here, you can't compete with Dell, HP, Acer, eMachines, and others. But what about the premium market for > $1,000 systems?

You can't compete with the established high-end boutique system builders like Falcon Northwest, Alienware, Voodoo PC, Vigor Gaming, Velocity Micro, Hypersonic, Widow PC, AVA Direct, IBuyPower, ABS Computer, Commodore Gaming...getting the picture? Several of these boutique builders are now backed by billion dollar parent companies such as Dell and HP, and all of them have good tech support (often lifetime...not 30 days).

Unless you have access to substantial capital, and a few years of professional experience as a system builder (or working for one), I would strenuously advise against this route, because you can't purchase components in the quantities required to get the pricing you'll need to offset the cost of value-added services such as technical support, delivery, setup, et. al. One bitchy client who can't do anything for himself can erase the profit you made on 10 systems, just trying to make him happy at the expense of your valuable time, swapping out parts for him, et. al.

However, you can compete with Best Buy and other shops on computer services, since you can reproduce your intellectual property practically on demand at very little cost. Your intellectual property is your knowledge, skill, and experience, which you can leverage without expenses that Best Buy has such as retail space, employees, huge utility bills, et. al.

Services such as repairs, upgrades, networking (wired or wireless), security, internet setup, remote administration, backup and restore solutions, training and education are all in fair demand and will be as long as there are computers. You could even branch out into digital home convergence and integration of the PC with home theatre or automation. You'd be surprised at the number of people who buy sh-t then need help with installation and setup. They often would rather pay a knowledgeable person to assist them in-home than to use the 'toll free' number and be put on hold for an hour, only to have Radishma try to guide them through it in broken English all the way from Calcutta.

If you can succeed at growing a viable business delivering computer services, then you can consider expanding into reselling and system building.

AgaBoogaBoo · Oct 31, 2007

Originally posted by: OOBradm

Originally posted by: tranceport
repost.

This thread will end up with you realizing you cannot compete with dell.

Click to expand...

link to original?

And secondly, I just checked newegg prices for a computer similar to one at the local BB, and I could build it for $400 less... with better parts....

And let me add, for a $500 computer, yes, the margins are so low that its not worth it. but for computers that are ~$1000, I've been noticing that I can usually build them for 100-200 less

Even margins like 100-200 dollars per system aren't enough, double it and make it $400 of margin, and as a small business, it's still probably not large enough.

$400 is a bit more realistic, but think about your costs and what it takes to run a business.

If you can build a few and make some side cash, great, but the risk of having to support it just isn't worth it. It's a nasty business to get into as a small business and so I wouldn't recommend it at all.

Answer the questions I made in the previous post and I'll help you think this through further.

Cdubneeddeal · Oct 31, 2007

Not worth it. The ones you're going to build a higher end computer are most likely smart enough to build their own from parts from Newegg, the rest will just spend $500 at Dell or Gateway for the whole shibang plus warranty and service. Sounds like a grand idea and we've all thought about it but the trouble is more than the benefit.

dsity · Oct 31, 2007

its a little off subject but

i know of a guy who began selling refurb dells at flea markets and such...eventually he started making $2000-5000 every weekend, eventually opened up his own store (in austin,tx) he now makes about $15,000 a month mainly targeting the hispanic population.

CFster · Oct 31, 2007

Not only is Dell going to beat you on the hardware, but their systems come loaded with all kinds of software (sometimes too much), that you'll never be able to match.

I used to do the same thing years ago - became a royal PITA and didn't make me any money.

kinev · Oct 31, 2007

Originally posted by: kinev
YAKTHCMMSCDTFTDCDIBFC

Yet Another Kid Thinks He Can Make Money Selling Computers Despite The Fact That Dell Can Do It Better For Cheaper

waggy · Oct 31, 2007

Originally posted by: kinev

Originally posted by: kinev
YAKTHCMMSCDTFTDCDIBFC

Click to expand...

Yet Another Kid Thinks He Can Make Money Selling Computers Despite The Fact That Dell Can Do It Better For Cheaper

this comes up EVERY few months. wish we ahd a search feture..

considering starting a custom PC building service in my local area

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