system builders... Am I charging too little? EDIT: thanks for the responses everyone, very informative :)

[mcveigh]

I just sent off an estimate for a new system,

no monitor, they already have a 17in LCD.

asus K8V (64bit)
3400+ CPU
1GB ram probably mushkin level2
case
silenx power supply
plextor dvd-rw
2x74GB raptors in raid 0

XP pro, office 2003small biz, ant-virus, nero buring rom.

I gave them an estimate of $3610

my cost will be about 2500, I will be putting a lot of work in to make it quiet.

i priced out a similar sytem at falcon northwest was over $4000.

of course after I build it I will have to support it as well.


edit: title

 

[Overkast]

Well, I think that maybe the $1,100 markup is a little too steep honestly... but I really don't know exactly how much elbow grease you're gonna put into making that rig quiet.

But still... If I was a customer and I knew your cost was only $2,500... I'd prolly be a little pissed knowing what your markup is.

Just my honest opinion.

 

[Nebor]

Video card?

 

[mcveigh]

my bad 9800xt


i gave them3 options, low med and high this is the high end.

 

[Spudd]

Markup of $1 grand, and you're wondering if you're charging TOO little?? You're making a 40% profit for crying out loud! lol

 

[Sheriff]

Nah, I think your on the Money for the Rig. Bad thing with the Deal/Building is the after effect as you never know how much support is required. I hate the Tech end with some clients.

 

[GonzoDaGr8]

Damn.. And I'm happy making a hundred bucks or so doing the same for co-workers and friends.:Q

 

[Dulanic]

Crap if I could get away with that markup I would. But your deff not charging to little. IF that took you 11 hours of time to build and stuff you would be making $100 an hour... and I know you can do that in welllll under 11 hours.

 

[lansens]

The customer should never know the markup. If we knew the markup on all of the crap we buy, we most likely would be pissed too.

When I build a machine for someone I charge a flat $350 and 10% of the hardware costs. A per hour repair or upgrade is $45 an hour and 5% of hardware costs.

 

[nitromullet]

$3610 for $2500 box... Thanks for reminding me why I keep informed about hardware and build my own. Don't get me wrong, I'm always glad to hear that someone with my skills can make a buck off of their knowledge. I'm just glad it's not coming out of my pocket.

Serioulsy though, in terms of charging too little or too much probably depends on your reputation... Falcon and Alienware have a well known name for offering good stuff. If you don't give your customers a reason to go with you instead of a well known brand name by undercutting their price, why should they bother? BTW, I am assuming that you don't yet have an established name or clientelle based on the fact that you posted this question.

Either way, it's a nice box, and they should be happy with it. Good Luck :beer:

 

[redbeard1]

Most of the shops around here vary from $65 to $125 per hour. So if your time and expertise is of some value, then pick a rate and an estimate of time to build it and install and update software. Is your bandwidth of some value? Because XP and Office updates are hogs. Then also add in some time for future tech support, because you are going to be the first person they call when it locks up for the first time, and usually they are not going to be expecting future charges for tech support for what are probably dumb questions.

That much for labor may seem high to some, but building that thing from scratch is going to eat up a bunch of time. Plus you have to dispose of all of the packaging. Does your garbage service charge by the pound? If they are trying to have something that compares to a falcon, your saving them money. If your parts are that much off of the shelf, how much less is falcon paying for them, and then marking it up? Shall we tell falcon that they don't deserve what someone is willing to pay them because they bought the parts cheaper? I wouldn't pay that much from anyone because I'll build it myself. But I'll pay a plumber what seems like obnoxius rates to fix things. It's all relative to your perspective.

 

[ponyo]

I think the title of this should be ... Am I charging too much? And I would say yes. But hey if you can get away with it, then more power to you.

 

[flexy]

Originally posted by: mcveigh
I just sent off an estimate for a new system,

no monitor, they already have a 17in LCD.

$3610

holy mother of jesus....i think for $3610 i could buy/build 5 high end systems....

 

[Viper96720]

I would expect a really nice cabling job with that mark up. Also a nice coolermaster case.

 

[Wanderer]

I would drop the price to 3200 and sell them like hot cakes .....
thats just my opinion.

 

[parsley007]

yeah, that seems high to me, a ~1000 markup??

 

[Hyperfocal]

The mistake most people who start their own businesses make is to charge too little. The costs of running a business are much higher than just the cost of the parts that go into the system. The "profit" built into a price seems immense until you start figuring out the costs besides the parts. Tools, workspace, training, demo equipment.


Assuming this is an actual business, take 15% for social security/self employment taxes. Another 25 - 35% for income taxes - state, local, federal. That's nearly half gone right there. Insurance -- Yikes.


Warranty service is another cost that has to be covered. A small-time operator can't set up a call center in India. You have to figure that tech support will be at least half of the initial build time. If the motherboard goes bad, the builder has to remove it, RMA it and reinstall the board.

 

[Atlantean]

holy crap you are overcharging them. I would charge maybe 20% of the system cost... at most though if you are going to be doing a lot of tech support for them then maybe the cost is justified... but to make a computer doesnt take that much and if they ever find out that you marked up the price by $1100 well... lets just say if it were me I would be more than a little pissed off.

 

[mcveigh]

thanks for the input guys,

some more to consider,
I know the customer and know they are high maintenance, I will be spending lots of time on the phone with them and driving down there to show them how to burn a dvd and stuff.

I normally charge 75/hr while crapusa charges 85/hr if you bring your computer in.

This was the high end I gave them, the system i am pushing them towards is mid range:
3200+, 36Gb raptor, slower am... my markup will probably be only around 700.

the case is going to be customized asd well, I am talking with some people about that... possible leather covered and some gold plating of small parts.

 

[boshuter]

possible leather covered and some gold plating of small parts.

Uh.......... never mind

 

[ai42]

I have been buying and selling computers for the better part of 4 years now. I have also worked in a retail outlet, and a couple of small computer shops.

Anyway as far as these people saying it's too high, hey money is money. If he can actually sell it for $3610 then take $3610, you are certainly getting paid for your time.

The way I see it there is no really great purpose to building your own low end machines. When you can buy (and resell) Dell Dimesnion 2400s and buy them up for $300 I can barely build the hardware for that cheap much less a legit OS.

Now for the high end performance freak, yea they are certainly going to pay out of the nose for it. If you goto Alienware, Falcon NW, or even Compaq and Dell's super high end gaming machines they are friggin expensive. Obviously the system builders are making out on that. And hey if I drove a Porshe to work and I made mad money and I went to a computer shop asking for the best of the best, of course you can supply that but that guy is also expecting to pay more than a typical computer.

Also if you are a legitimate business (like I am) you have to take in account you need to pay taxes, inventory taxes, bank fees, phone and internet bills etc. (FYI I don't have a retail shop I do this out of the house). So you have to make that money back somewhere, so I don't see a 30% markup as unresonable at all.

However, you get into what I call questionable business practices if you revoke your quote. If you represent yourself as a business (or even a professional) then it would be very bad as far as image to revoke your quote. Now you could say once your deliever the computer say you know what a couple things were cheaper than I expected I'll knock off $50. Then you give the person a sense that they got a better deal than they anticipated.

FYI I do computer shows etc and I sell low end machines (mostly cheaper Dells etc) as well as mid/upper end custom machines. I typically sell a ShuttleX systems with like a 3Ghz/512mb/120gb/DVD+R/Radeon 9800/WinXP for around $1500.

 

[mcveigh]

I am in business as well, incorporated, taxed, etc.

I refuse to build low end machines just no money in it. I don't build clones for business either. but a few times a year people ask me to build high end machines like this.

 

[Corporate Thug]

usually i charge COST + 15%, but thats just me

 

[Dug]

system builders... Am I charging too little?

Yes. If they didn't flinch at the price, then you didn't charge enough.

 

[bigpow]

Too much.

You should only take a considerate amount of margin.
Then you should offer to your customer, whether they want additional/extended support (or even trainings) or not.
Then you can charge them more.

This way you'll gain more customers.

Trust me. Don't treat them like a hit N run target.