PC builders, how do you compete with major manufacturers?

[Technobabbler]

I recently opened a computer shop, and everything has been going great. I am having trouble building machines with individual parts that are priced as well as HP machines for example. I am an authorized HP reseller so I do have the ability to buy them and mark them up. I know I could provide a better machine piece for piece but john q public doesn't really care about that they only care about the price. The town I live in isn't large enough to have a niche market for a performance specialist kinda shop. I have to cater to everyone, in fact a large portion of my customers are of the blue hair variety. They didn't dye it that way either. So do I bother to compete in this way or do I say screw and just give the public what they want, cheap computers.

[Frank1946]

If you use quality components you can't compete. I used to build systems for my friends and my price was actual cost for the parts and lunch with a couple of drinks at Flannigan's. Even then I couldn't under price the mass marketers.

[onetech]

It's painful in the beginning to change people's buying habits. In your first couple years, people will reley on you for service to their POS and eventually you will convert some over to the the custom build market. Once the word gets out about your superior sales and service abilities, your customers will be giving you blank checks to build them a new PC.

[Mjölnir]

Most of my customers want budget systems. Often what the OEM's do is skimp on the CPU in order to include optional extras. I sell higher model CPU's without those extras and also include low latency RAM and then market my PC's on the strength of those features. On top of that, I deliver the PC's, set them up and give a quick rundown on new featues. My profit margin is next to nothing on new system builds, but I make my returns on after sales software support. Provide service better than the competition do and the customers will come back

I find it much easier to be competitive with high end builds, and much easier to market higher quality hardware.

[Windrunner]

I'd consider trying this if you want to get more enthusiast builds:

Get a few of the HP computers that you sell and set them up alongside a custom built with a price tag on all of 'em. Run games on them, let people mess around on them, and otherwise show off the custom rig absolutely slaughtering the HP rigs.

For the custom rig, I'd build it using the lower end of what you're hoping to build, but still enough to make the HPs look like toys.

If you have sales figures, I'd try to price the custom rig at a third more than the HP machines that sell the best, but no more than half again they're cost for what you display on the floor. You want a "You get all this for this much."

You will also have to have some bundled software ( on top of including a legitimate copy of windows 7 with every machine ). Ask some freeware authors, et cetera.

You might try finding a game distributor willing to cut you a favorable deal, and offer a bundle of games.

Also, case lighting is very cheap, ridiculously cheap even. You can light up a case like a christmas tree for under 50 bucks, and the 'wow' factor up against the HP machines should be obvious.

I'm not sure what you mean by blue haired, but if you're talking punk rocker types you might try a good sound setup?


Uhm, hope one of those ideas help. What I think would get you the most sales is blowing the HP computers away with the custom build. But of course you end up having to support the system instead of just sending it off to HP.

[ozzy983]

It's hard to compete because everything on an OEM system is built into the motherboard. Said component only cost 100 bucks. No need for graphics, lan, or sound. Saves money.

Performance systems you have to buy all that, especially the graphics which is one of the most expensive components.

I agree with Windrunners advise, and would suggest even building a few mid range systems as well, and run them along side the HP ones, and show them that you get a better system, more quality components and the overall speed increases.

[Windrunner]

Right, ideally he'd be able to show a custom build next to every HP system he displayed ( if he displays any ), but it'd be a recurring cost to build them every 6 to 8 months, which he could turn into a special sale to get customers - but if he's not having a lot of traffic it would cost him too much.

[Chiles4]

The thing is that most people neither want nor need quality parts. You could pair up an $50 ECS mainboard with a $30 Jaton video card (pulling some names from the past there) and chances are, the system would last for years and do everything they want it to do - i.e. e-mail and surfing. And the problem of selling high-end parts is compounded when selling to an older crowd.

Performance PCs comprise a very niche market. For the majority of your clients, a $300 video card will do nothing for them.

I advise friends on PC part selection and sometimes assist with their builds. These guys are in IT (just like me) and often, they don't know what the hell I'm talking about (I just get that glazed-over look).

Obviously, in this situation, profit margins on anything hardware-related are razor-thin. I think you have to make your money in services. Make them pay out the ass when they're too dumb to run an anti-virus program (or keep it up-to-date) or when they lose files (due to no backup).

Hardware lasts forever. Someone at work was getting a 'bad video card' beep code on an ancient Pentium 1 Compaq. I opened it, saw a couple of decades worth of dust buildup, pulled the card, blew out the slot with compressed air, and voila! It works again! Unbelievable!

[mpulliam]

March will be my 12th year in business - it is all about the service. My customers know I can not beat a palet full of HP computers. They come to me for my over the counter time I give them, those times I drive in my own vehicle ot their house and set up an email, or I take the time to even help them buy from someone else. My "famous" sales pitch is "I'm the Ferrari of computer shops". You get what you pay for in my shop.

They pay for my experiance, and my honest opinions, my solid parts knowledge and my product loyalty.

A lot of my clients can do what I do, but to them its worth the $140 to have me do it, faster and with confidence.

I sell brands that I count on, and I have a good solid repoire with my manufactures. A warrenty is honored regardless of the issue. I do not change manufactures daily just because of price. Product loyalty is important.

My cell is on my hip 24/7, and some customers use that option every day.

And I appreciate that, regardless if they buy from me or the next guy - my word is valued.

-=M=-

[abb1]

Yes, we cannot compete price wise with computer manufacturers, but then again, you are comparing apples to oranges. The idea of the $499 HP computer is that in 2 yrs when it gets outdated you just give it away to your kids. They are what is classified as throw away computers which really are not upgradable, except maybe the memory. With a built system, you have the opportunity of replacing the motherboard, CPU, everything that you cannot do in a manufacturers PC. I sell my systems with a guarantee that upgrades are free in labour for the life of the system, they just have to pay for hardware. Now somebody has a system that lasts them 5-6 years instead of 1-2 years, and that is what sells. My systems are not cheap, but I also have had only 2 systems in 10 years come back for a hardware repair, and HP cannot compete with that!

[Pixels303]

I have a pessimistic view.

Trouble with PC's today is that they are so plentiful and cheap, people can simply buy used or "from giveaway" to replace their current dead machine. In the throw away world of PC's, I find so many perfectly good computers thrown away. People get a virus (or they create their own problem by installing bad software) and they run to the store to buy a new one.

The only real factor in maintaining service to PC's in terms of upgrades are for people who have Huge amounts of important data to retain or those who are not wealthy enough to buy new and have the time to rectify the issues every time something goes wrong.

Geeks who like spending time with PC's, are more likely to pick specific parts and be able to upgrade systems of their own. These people are less likely to go to companies or individuals who do computer upgrades as they save on doing it themselves. And they would never buy from a major manufacturer like HP as they would know that they often build proprietary hardware which is not upgradable or repairable with off the shelf components. (See Mac PC's)

Thirty years ago, there were television repair men who took numerous hours training in how to fix Televisions. When TV's became inexpensive and throw away, TV repair was a thing of the past.

In summary, PC builders do compete with major manufacturers, but not enough as the majority of PC users don't even know how to use a PC much less grasp the idea of upgrading. Buying brand name is often the way of fitting in with everyone else. Remember when the iPhone first came out? Lots of people bought it even before there was any cellular coverage in place that would work with the phone, but everyone wanted to have one simply because it was advertised. There are so many people who simply don't have the time to know better who blindly follow the stereotype "Needs" in society.

[no2guncntrl]

In today's economy, folks want it to do as much as it can
while dropping as little money as possible. I have a couple
of older PC's I'm going to give to some returning Vets
because first I can't sell them where I'd get any money
from the initial repair of them, but more importantly,
returning Vets need all the help they can get.

I've found my money in getting bugs out and repairing
the OS and start up, etc. I don't make much so I don't
know how anyone who uses higher quality parts is making
anything.

I wish you the best with your new business, though !!!

Originally Posted by Pixels303

Geeks who like spending time with PC's, are more likely to pick specific parts and be able to upgrade systems of their own. These people are less likely to go to companies or individuals who do computer upgrades as they save on doing it themselves. And they would never buy from a major manufacturer like HP as they would know that they often build proprietary hardware which is not upgradable or repairable with off the shelf components. (See Mac PC's)

That's pretty much as close to spot on as one can get.

[Technobabbler]

Looks like I touched on a bit of a nerve. I do like the idea about setting up two machines next to each other, one custom one not. I don't know that I have to continue with the upgrades as I can include it in the spiel. These two machines are from 6 months ago this was the difference then, it's comparable to what current machines will do.....
Those of you that brought up service are absolutely right. I know that I can rely on my reputation to keep customers coming back. Service is where the money in the business comes from. I am actually a spy-ware janitor by trade. I hate to say it but the store paid rent last month just by cleaning out machines and making them "faster" again.

[Windrunner]

Could always raffle off the old system

[ozzy983]

Originally Posted by Pixels303

I have a pessimistic view.

Trouble with PC's today is that they are so plentiful and cheap, people can simply buy used or "from giveaway" to replace their current dead machine. In the throw away world of PC's, I find so many perfectly good computers thrown away. People get a virus (or they create their own problem by installing bad software) and they run to the store to buy a new one.

The only real factor in maintaining service to PC's in terms of upgrades are for people who have Huge amounts of important data to retain or those who are not wealthy enough to buy new and have the time to rectify the issues every time something goes wrong.

Geeks who like spending time with PC's, are more likely to pick specific parts and be able to upgrade systems of their own. These people are less likely to go to companies or individuals who do computer upgrades as they save on doing it themselves. And they would never buy from a major manufacturer like HP as they would know that they often build proprietary hardware which is not upgradable or repairable with off the shelf components. (See Mac PC's)

Thirty years ago, there were television repair men who took numerous hours training in how to fix Televisions. When TV's became inexpensive and throw away, TV repair was a thing of the past.

In summary, PC builders do compete with major manufacturers, but not enough as the majority of PC users don't even know how to use a PC much less grasp the idea of upgrading. Buying brand name is often the way of fitting in with everyone else. Remember when the iPhone first came out? Lots of people bought it even before there was any cellular coverage in place that would work with the phone, but everyone wanted to have one simply because it was advertised. There are so many people who simply don't have the time to know better who blindly follow the stereotype "Needs" in society.

True story, back in the day I used to work at bestbuy, before I got into corporate networking, and we serviced a customer's Ipod. We had to replace the HD, so all the music was gone.

Apparently she bought the Ipod open box, and it came with customer songs already on it. She got it back, blank, and when we explained to her how to put music on it, she told us she didn't even OWN a pc.

That she bought it because of the hype and that everyone had one, and so must she. So she said, she'll just take it and "pretend" to listen to music.

I was like oh my.

Lol