Do you "whitebox"? Do you make money at it?

[VirtualLarry]

Just curious. I've been building PCs for a while, but never really turned much of a profit. I usually end up giving away some of my PCs to friends, after a while.

On a rare occasion, I might actually sell a PC, and get paid nearly what it cost in parts.

I don't advertise, so I don't have a very big customer base. Most (though not all) of my existing customers have been happy with my work though. (At least, I think I know what I'm doing. Although it seems like whenever I think that, I learn something new that corrects my understanding even more.)

 

[XavierMace]

I've never seen the term whitebox used to mean sell custom built computers. But not really. I'll help friends build a computer if they ask but that's about it.

 

[Blue_Max]

I build stuff at least 1-3 times a year just for fun. If I can buy stuff cheap, add some new stuff, enjoy it for a while, then sell it at either a small profit or tiny loss, I call it a fun hobby.

I'd say 2 of every 3 build+sell "cycles" net me a small profit, 1/3 is a small loss. Every now and then I net a nice profit when I find the right buyer for something I got super cheap.

I'd never do it for a living... these days it seems like the only people barely scraping by (other than the big parts shops like the Egg) are the ones getting skidloads of office PC's for next to nothing and refurbing them for relatively cheap resale. Personally, I find it offensive that these guys get machines donated or only $5-10 each and they sell them for $250+ after little more than a Windows reload.

 

[JimmiG]

I built a PC for a relative last year. Even re-using my old GTX 670 for the video card, I was just *barely* able to undercut the price of a mid-range OEM PC while making no profit whatsoever. If I had bought a new videocard for it, the system would either have cost €100 more than an equivalent big box OEM machine, or I would have had to sell it to him at a loss.

 

[Denithor]

Back in the early 2000's I did a lot of refurbished OEM boxes for friends/family then expanded to their friends/etc. Mostly buy box for like $50 on eBay, replace any bad parts, reinstall OEM copy of Windows and resell for like $150-200. Did a lot of IBM Thinkpads also, typically tried to make $100 on each. Made a little money but certainly not enough to live off or anything.

As far as true 'whitebox' builds, from scratch parts in unlabeled case, only did that a few times. Mostly when I completely rebuild my own personal system and sold off the old one (or second one back, usually). A few times someone wanted higher performance than typical from OEM system and I would custom build to suit, like an engineer buddy who wanted an AutoCAD beast back when C2Q just came out. But those were really hard to make any money on, Windows license just eats up the entire margin (vs what they can just buy new from OEM).

Even today, if somebody wants a build, I just get a Dell off eBay and refurbish to match needs (select for i3/i5, RAM, add SSD if budget allows, etc).

 

[mnewsham]

I will help a friend put together a build for the cost of a large pizza and maybe $10-20 if it's something particularly time consuming.

I make it clear however I am not going to be their tech support unless they want to pay hourly.

 

[ronbo613]

I've built a few video editing workstations but selling computers is a volume business, you have to sell a lot of them to make any money. There is also a lot of competition.

 

[dave_the_nerd]

Yeah, it's not a lucrative business.

The "trick" to making money is to talk about the build, get the money, and THEN buy the parts and build it. And then charge for support.

You can also buy pallets of computers at auction, chop 'em up, and sell the parts on eBay.

If you're just throwing PCs together with the thought that you might be able sell it later, and then offering free support out of guilt... that's bad.

 

[nerp]

The only way to make money is if you buy parts at steep discount in bulk. Then you have piles of inventory. That means you need a lot of customers and time to make profits. Nobody buys white box machines anymore. A small shop can't compete with Dell or HP. And people don't necessarily want a custom machine in all cases. Many want the Dell brand or something like that for a variety of reasons. I can imagine you could make money as a boutique high-end builder of sorts, perhaps luxury computers for rich people who want their machine to be a beautiful part of their decor, but even then, those folks tend to just buy expensive MacBooks and be done with it. High-end gaming rigs might work but the market for that is very limited and your target buyer is often inclined to build one for him or herself.

 

[mikeymikec]

I build PCs for customers. It's a minor portion of my total business. Initially I didn't want to get into it because I felt that there was no way I could undercut the competition so what was the point in trying. After a few customers asked, "so which brand would you recommend", it got awkward to keep saying "none" and my reasons why, so I started building them, and only decent quality ones. I lose the odd sale for someone who hoped I could undercut a business that buys parts in bulk and has a production line, but I'm not losing any sleep over it. I'd rather get a reputation for building computers that last and perform well.

I charge the customer the cost of the components up-front plus a flat-rate fee for building and installation (which includes a couple of hours of set-up for the customer's needs on-site, setting up printers, transferring data, etc).

 

[VirtualLarry]

For example, I think that I've sold one PC in the last six months. (Given away several though.)

It was a replacement for a friend's relative's PC, that I initially built in 2011.

The original was a C2D E3300, Biostar mATX G41 board w/DDR3 and VGA-out, DVD, 4GB DDR3, 500GB HDD, and a legit copy of Windows 7 64-bit.

It started shutting off under load.

The replacement was a slimline Gateway branded box, G630 Sandy Bridge 2.7Ghz Pentium, 8GB DDR3, 500GB HDD, DVD, and a discrete GT430 128-bit DDR3 video card.

I paid $210 inc. tax at a Staples B&M for that PC, on some sort of sale or clearance. List price at the time was $400. I then added another 4GB DDR3, and swapped the original factory HDD for a 2TB 7200RPM Seagate Hybrid Drive, and put the factory HDD away. Eventually, I got fed up with the poor performance of the Sandy Bridge "HD" IGP, and put in the GT430.

I used that PC for a few years. Fast-forward to a few months ago. I pulled my Hybrid Drive, put in the factory HDD, installed NV drivers, updated Windows 7, and was looking to sell it.

I brought it over to the friend's relative's place, and they picked it out, out of several choices I had brought.

So I sold it for $150, which I figured was a pretty decent deal. (OK, if the mobo had more than two SATA ports, I would have thrown in an SSD too.)

I then, later that night, decided to search for the model number on ebay, and there was a listing for a Windows 8 version of that PC, for $155. (But the one I sold, had upgraded RAM and a dGPU. I figure that those were worth $50 or so.)

So I think I gave them a fair deal.

It's a pretty attractive little PC. It looked like new. And it didn't take up a lot of room. Fine for a "Facebook PC". (I gave them a warranty too.)

 

[dave_the_nerd]

For example, I think that I've sold one PC in the last six months. (Given away several though.)

It was a replacement for a friend's relative's PC, that I initially built in 2011.

The original was a C2D E3300, Biostar mATX G41 board w/DDR3 and VGA-out, DVD, 4GB DDR3, 500GB HDD, and a legit copy of Windows 7 64-bit.

It started shutting off under load.

The replacement was a slimline Gateway branded box, G630 Sandy Bridge 2.7Ghz Pentium, 8GB DDR3, 500GB HDD, DVD, and a discrete GT430 128-bit DDR3 video card.

I paid $210 inc. tax at a Staples B&M for that PC, on some sort of sale or clearance. List price at the time was $400. I then added another 4GB DDR3, and swapped the original factory HDD for a 2TB 7200RPM Seagate Hybrid Drive, and put the factory HDD away. Eventually, I got fed up with the poor performance of the Sandy Bridge "HD" IGP, and put in the GT430.

I used that PC for a few years. Fast-forward to a few months ago. I pulled my Hybrid Drive, put in the factory HDD, installed NV drivers, updated Windows 7, and was looking to sell it.

I brought it over to the friend's relative's place, and they picked it out, out of several choices I had brought.

So I sold it for $150, which I figured was a pretty decent deal. (OK, if the mobo had more than two SATA ports, I would have thrown in an SSD too.)

I then, later that night, decided to search for the model number on ebay, and there was a listing for a Windows 8 version of that PC, for $155. (But the one I sold, had upgraded RAM and a dGPU. I figure that those were worth $50 or so.)

So I think I gave them a fair deal.

It's a pretty attractive little PC. It looked like new. And it didn't take up a lot of room. Fine for a "Facebook PC". (I gave them a warranty too.)

Not a bad deal, but... why did you buy the machine in the first place? ()

 

[VirtualLarry]

Not a bad deal, but... why did you buy the machine in the first place? ()

That's a good question. I guess I have trouble saying "no" to a Hot Deal. At the time, I think that the thinking was, that I couldn't build one for that price. $200 + tax, for a complete Windows 7 64-bit PC, was barely more than the Windows license. At least I thought so. Plus, "half price!".

 

[QuietDad]

Hard to make money anymore buying OS liscenses and parts one at a time. When I do build them now I'll find a cheepo eBay item with a COA on a decent case and gut it. I know go to Best Buy or Walmart and buy scratch and dent or refurbs too and add a few pieces to get them there,

 

[XavierMace]

That's a good question. I guess I have trouble saying "no" to a Hot Deal. At the time, I think that the thinking was, that I couldn't build one for that price. $200 + tax, for a complete Windows 7 64-bit PC, was barely more than the Windows license. At least I thought so. Plus, "half price!".

I think you need to adjust what you consider a hot deal. Your particular example in this case wasn't bad but with computers there comes a point where the hardware is old/slow enough that it's not a hot deal regardless of hot cheap it is. I know somebody who was applying that to used servers. "This system cost $10,000 new, I only paid $100 for it". Yeah, because performance wise it's no faster than a modern Intel Quad Core rig and it's using 10x the electricity to do it not to mention the heat and noise levels.

I stopped buying used servers for that reason a while back even though I was making money on it. I'm down to one old server (Xeon 5500 series) and two old storage systems left that I'm trying to unload.

Trying to sell custom bottom end computers is a dead end business. You're either going to be losing money, selling non-competitive systems, or both.

 

[VirtualLarry]

I think you need to adjust what you consider a hot deal. Your particular example in this case wasn't bad but with computers there comes a point where the hardware is old/slow enough that it's not a hot deal regardless of hot cheap it is.

You need to look at it in the context of the time I bought it. It would be like buying an i7-4790 with 16GB of RAM for half price, say $400-500. Sure, that's a lot of money still, and in five years, it might not seem like such a great deal either. But that's not such a bad deal in terms of today.

 

[Denithor]

The replacement was a slimline Gateway branded box, G630 Sandy Bridge 2.7Ghz Pentium, 8GB DDR3, 500GB HDD, DVD, and a discrete GT430 128-bit DDR3 video card.

You need to look at it in the context of the time I bought it. It would be like buying an i7-4790 with 16GB of RAM for half price, say $400-500. Sure, that's a lot of money still, and in five years, it might not seem like such a great deal either. But that's not such a bad deal in terms of today.

Um, no? Buying a bottom dollar POS for half price is nowhere even close to buying last year's top model on a clearance sale.

 

[monkeydelmagico]

For example, I think that I've sold one PC in the last six months. (Given away several though.)

It was a replacement for a friend's relative's PC, that I initially built in 2011.

The original was a C2D E3300, Biostar mATX G41 board w/DDR3 and VGA-out, DVD, 4GB DDR3, 500GB HDD, and a legit copy of Windows 7 64-bit.

It started shutting off under load.

The replacement was a slimline Gateway branded box, G630 Sandy Bridge 2.7Ghz Pentium, 8GB DDR3, 500GB HDD, DVD, and a discrete GT430 128-bit DDR3 video card.

I paid $210 inc. tax at a Staples B&M for that PC, on some sort of sale or clearance. List price at the time was $400. I then added another 4GB DDR3, and swapped the original factory HDD for a 2TB 7200RPM Seagate Hybrid Drive, and put the factory HDD away. Eventually, I got fed up with the poor performance of the Sandy Bridge "HD" IGP, and put in the GT430.

I used that PC for a few years. Fast-forward to a few months ago. I pulled my Hybrid Drive, put in the factory HDD, installed NV drivers, updated Windows 7, and was looking to sell it.

I brought it over to the friend's relative's place, and they picked it out, out of several choices I had brought.

So I sold it for $150, which I figured was a pretty decent deal. (OK, if the mobo had more than two SATA ports, I would have thrown in an SSD too.)

I then, later that night, decided to search for the model number on ebay, and there was a listing for a Windows 8 version of that PC, for $155. (But the one I sold, had upgraded RAM and a dGPU. I figure that those were worth $50 or so.)

So I think I gave them a fair deal.

It's a pretty attractive little PC. It looked like new. And it didn't take up a lot of room. Fine for a "Facebook PC". (I gave them a warranty too.)

There is your problem. Quit building junk for relatives and friends.

Ten years ago I could turn a profit off budget "white" boxes. Not any more. The only PC builds I've made any money off of in the past two years have been high end gaming rigs. Even that is getting squeezed now with boutique builders like Puget and Origin cutting costs.

I hate doing business with family as well. They always expect cradle to grave free service.

It ain't a business it's a hobby.

 

[Denithor]

I hate doing business with family as well. They always expect cradle to grave free service.

It ain't a business it's a hobby.

And the free cradle to grave service takes all the fun out of the hobby.

 

[VirtualLarry]

And the free cradle to grave service takes all the fun out of the hobby.

I told a friend of mine that I've been doing tech-support for basically free for years, to "call geeksquad, maybe they know".

He was asking me how to re-initiate the Flash Player Update notification that you get when you log in and there's an update. He rebooted, and cancelled it, and wants it back now.

He was also asking whether he should just install it fresh.

I didn't answer him. He's gotta learn to make his own decisions once in a while, and not rely on other people to make decisions for him.

Edit: For the record, I didn't tell him that because I didn't know, but because he was asking me whether or not he should re-install Flash Player fresh from the Adobe site. I assume it's a scheduled task somewhere.

 

[SlitheryDee]

Every time I ever built a computer for anyone I regretted it. All my computers never have problems. Anything I put in anyone else's hands seems to develop issues that I've never even seen before and I feel obligated to help them since I had a hand in building them. I never even tried to make money doing it, and I still got roped into hours of support just because I allowed myself to be part of the process. After those experiences I decided I certainly didn't want to feel obligated by virtue of having made a profit off of the build. I just do it for myself these days.

 

[Denithor]

I have a buddy (been friends since high school) who owns an auto tire/service shop. I helped him update/refresh all his old C2D machines to SB quads couple years ago when he redid his shop. He basically paid for all the parts and just assumed I was throwing in the hours of work free. This past year at Christmas, he asked for help building gaming rigs for his wife & son. I refurbished two Dell machines, outfitted with SSD/PSU/GPU (spent many hours finding good deals, picking parts, installing hardware, setting up Windows, etc). I bought most stuff up front, he paid me a portion back as cash and then swapped for some service on my car. The parts plus the cash paid for what I had spent directly. Then he asks how much I'm going to pay for the labor, saying the normal rate is $80/hour. And I was like, I thought we were swapping out services.

He still hasn't talked to me in like three weeks. Apparently my time just isn't worth what his is.

 

[Red Squirrel]

When I was in high school I decided to start a computer repair and sales business, I actually registered it, got a vendor's permit and everything. I found out very quick that there is a very thin profit margin in sales, but especially building computers. You simply can't compete with Dell and such, and now it's even more true. Back then I actually COULD build a PC for cheaper than a store bought one, but not by much. Most PCs would cost about $1,500 to make leaving very little room for profit. Maybe $100. Funny thing is it's still about the same price now to build a PC, but OEM ones are much cheaper, so it would be even harder to compete now not to mention most people don't even own a PC anymore. I really don't know how people manage to do any real work on a mobile device really.

And yes the minute you build a PC for someone you are now their 24/7 unlimited technical support and the PC will have a life time warranty. If you try to tell them otherwise they'll just cancel out of the deal and you're out a few grand in parts that you had no intention of using for yourself.

 

[mvbighead]

And yes the minute you build a PC for someone you are now their 24/7 unlimited technical support and the PC will have a life time warranty. If you try to tell them otherwise they'll just cancel out of the deal and you're out a few grand in parts that you had no intention of using for yourself.

If this is true for you, you're a pushover. There's a difference between support and warranty. Warranty is dealing with hardware failures and the like when items are warrantied. Support goes above and beyond the sales process. Support should require a contract or an hourly fee.

I provide my mom free support. Everyone else can pay if I am doing stuff for them, and I really only have one cousin that asks every now and again, and she usually flips me 20-40 bucks for my time. Not really worth it for me, but I do know rates at Geeksquad are a helluva lot more than that so it still saves here some money.

Beyond that, as everyone else has stated, building custom PCs is not a lucrative market. The Windows license is going to kill it for pretty much everyone. Beyond that, most major resellers buy in so much bulk that they're spending a LOT less up front than the average joe. If you were to want to be profitable, your best bet is to shoot for the stars and try to sell 1000s a year to the point you can order 100 units (drives/boards/cpus/etc) at a time. Even then, Dell/HP/etc are buying 1000s at a time more than likely.