Competing With The Larger Computer Manufacturers? 24
mach-5 asks: "I am currently in the process of starting my own business, building custom computers. Our business model is to offer friendly customer support without the big corporation BS, waiting in the phone que, etc. My big fear is that most people will be turned off by the higher prices we are forced to have because we don't have the buying power of big brother corporation. Basically, I'm worried that Joe Consumer will see a Compaq priced for $500 (after $500 MSN rebate) and would rather pay that than the $1000 that we are initially charging. I'm also worried that Joe Consumer will not be able to grok the quality of computer they will be getting as compared to a mass produced machine, with proprietary drivers, etc. What can I do to market my machines so that the public knows they are getting a quality machine, and friendly service? What niche can I position myself in to attract business? Also, what qualities would you Slashdotters like to see in a computer hardware vendor that would make you purchase from them, rather than Dell or Gateway?"
ask yourself.... (Score:1)
gamers (Score:2)
Gamers typically have high expectations of performance and appreciate high quality machines. There are also enough of them to have a pretty decently-sized niche market. Advertise in magazines like PC Gamer and the rest.
On thing you have to consider in this market is that many gamers (I used to be a hard core gamer but I don't have time anymore, plus I use my machine for more useful purposes now) build their own, in the absolute perfectionist tweak-and-tune-everything quest for the maximal performance from the given hardware resources. So two key features to have and advertise are: 1) quality components at every level (check sites like tomshardware.com and anandtech.com to see what's getting rave reviews, your target market reads these sites too), just like they would have bought if they were doing it themselves, and 2) standard components (corollary to 1) really), like a good quality, open and easy to access case, motherboards that have a minimum of integrated crap, etc. becuase this assures them that when they decide to upgrade in 6-12 months, it won't be a pain in the ass like it is with some big-name proprietary schlockfest like Cumpaq or Crapway.
Word of advice: go AMD. Their processors are both cheaper on average than the Intel line, and generally outperform them. This offers your customers better performance for a lower price. This is the definition of a win-win situation.
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Fuck Censorship.
How can you tempt me? (Score:1)
The ground-level user is looking for a good price, but if you have genuinely helpful staff and will go that extra mile to help a clueless newbie, I think they'd pay extra. If your engineers were available to go to their home and set it up for the first time, or if they took time to sit down with them in-store and go over exactly what to do, configure their web browsers for them and set up their ISP of choice, I think that this would be seen as value service worth paying extra for. I worked for a while selling computers and believe me, customers respond well to a sympathetic and non-tech-talking salesperson who's willing to take time and explain in small words.
For the geek-level user, we're looking for cool gizmos that you can't get elsewhere. Many of us will just assemble our own machines so we may not be looking at buying a standard package, either from you or from a big name. What would tempt me? Cool stuff - custom designed cases or accessories - see some of the ideas at PCMods [pcmods.com] for ideas. I'm tired of beige cases. Give me a black keyboard with a tracer pattern running up and down the numlock/capslock/scrolllock lights, and I'm your customer in a flash. And for the corporate customers, custom cases might be interesting too - offer to paint company logos on the cases, perhaps? A stencil and some spray paint, not a lot of extra cost to you.
My $0.02! =)
...Pentapod
Joe Public Won't go for it but.... (Score:1)
You offer a fully customised build
You do not force any software - esp operationg system on me
You REALLY know / understand PCs - ie you do not have sales staff that are little more than acne ridden school kids
Another area you might think about - aim for the growing 'older computer user'. More and more folk in their 60's are getting into computers as they see everyone else doing it (and also sometimes for a home business. A lot of these have no experience whatsoever and can be easily conned / confused by some PC sales staff that I have seen. They would really benefit from friendly, knowledgeable, even caring help. They are often also more willing to pay the little extra to get that level of service. Why not look at the complete package, deliver set up at home, install software for them (of their choosing of course) Possibly even go as far as some basic lessons!
Advertise that you burn in with VA Linux Cerberus (Score:3)
Better yet, leave one machine of each model you configure running in your showroom all the time with the tool running on it.
Even if you sell machines preinstalled with Windows, let your customers know that they're getting machines that are of more robust hardware quality - if they're pass these tests thrashing the system under Linux, well you can figure it'll be pretty reliable running Word under Windows 98.
Also have a bin near the door full of "Free - take one" floppies duplicated with Memtest86 [sgi.com] - and test the memory you install with Memtest86 before giving it to a customer (to some extent it should validate CPU's and motherboards as well).
Ask your customers to take memtest86 home and try it out on the machines they may already have. (You boot off the floppy to run the test; on Linux systems you can install it in LILO or Grub).
They may get a suprise - I have a PC-133 DIMM that failed memtest86 when the machine was brand-new from a small PC shop like yours; I doubt they tested their memory with more than the BIOS test - my BIOS test still doesn't show any errors, but memtest86 consistently shows the same error on this DIMM.
Michael D. Crawford
GoingWare Inc
Support! (Score:3)
As we all know, selling computers is not like selling oranges - "Here you go sir, don't let the door hit you on the way out."
Be available for your customers and take the time to talk to them and explain things. And sound like you know what you're talking about.
If someone needs a ten-minute fix (re-seat a video card, for example) then have him bring it in and re-seat it for him. And say, "That's complimentary, no charge." He'll remember that the next time he wants to purchase a computer.
Be prepared to spend time on the phone doing some hand-holding, especially with new computer buyers. "I want to get something for the kids."
Don't be too anxious to nickel-and-dime people, as I said above. If it's just a few minutes of your time, well - you'd just be drinking coffee for that few minutes anyway. If not, then you're so busy that you can afford to hire some staff to turn screws for you. Not an hour or more, that would be charge-able. But a ten minute fix, well that comes back to you in good will.
One of the most frustrating parts is when someone phones you and says, "I just purchased a new computer from Office Superstore and I don't know how to set it up." Your first inclination is to tell him to go to hell, of course, and you'll provide the shovel. But resist the urge. Just explain that you are prepared to set it up for him at $x per hour. You might also explain that you provide a certain amount of "free service" for your customers, of course, but that you can't afford to support Office Superstore at no cost.
If a customer wants a "house call" say "Sure! I'll be right along." But explain that you must charge per-hour for all of your time there, whereas if he brought the unit in to your shop then you could work on it and while it was, for example, formatting the hard drive, you could be working on another customer's unit and therefor the cost would be less as your per-hour charge would be "shared" between the jobs. If you're at his house (store, whatever), which you would be PLEASED TO DO if he wants, he will have to pay the full rate for each hour on-site.
Re:I hate to be a doomsayer (Score:2)
The retail computer market is extremely cut-throat.
My brother did this for a year. I warned him about this exact thing. And it's truer than you can possibly believe.
He tried going the support angle. It works extraordinarly well for some customers (i.e. the ones you want) but horribly bad for most. Truth be known, most people have someone they can call (usually to that someone's chagrin) when they need help; they don't want you. You will not make money on hardware unless you stock and can therefore be ready for the guy who comes rushing in at 10 to 6 looking for a widget. You can't make money when you stock because prices drop quickly on things like RAM, drives, processors and video cards. Prices tend to stay stable on cases, power supplies, fans, peripherals (CD-ROMs, floppies, keyboards and mice) and consumables (paper, toner and ink). Your support time usually gets eaten up by someone who just...won't...go...away but who doesn't think they really have a problem. Your store usually attracts a couple guys on welfare who just hang around and chatter all day. The list is endless.
My brother managed to make a bit of money because he ended up selling to the office supply store in town. Hell he did alright even though there were two other computer stores like his in the 11k-person city, but he couldn't make enough to live on.
Very bad business to be in. You've got to either have great connections or incredible marketing. Probably both.
Sell locally (Score:2)
While national firms seem to rule everything, many small local buisnesses would rather support the local guy. So keep yourself local if you can. A small store front is nice, but not strictly needed. Work for the local buisnesses. Get a cell phone, and let all the business people in town know that number, they will call you when they have problems. (I recomend charging extra for sunday calls, so you get time alone, but if there are 24 hour shops in town be willing to work a 2am when needed)
There is a company in my town iwth 100 pentium 133s getting older everyday. They would like to browse the web on these machines (they don't now). There is big money to be made from that company, all it needs to someone to court their buisness and have the patience to wait from them to finially spend the money. They don't just need someone to sell them mahcines, what they need is someone to sell them a system, which would start with 2 machines that can access the web, a internet conneciton (Resell someone else's!), and a firewall/router. You don't even need to know how to do everything they need, you just need to know someone who can setup their firewall and router, who needs some extra money.
Selling computers will pay the rent, but it won't pay your time. Selling cables won't pay for anything even if you tripple your price, but people will soon learn that you have that rare cable they need now and they soon think of you first for everything, so carry a lot of strage things. Do not get caught in an inventory trap however, everything you have sitting on the shelf is losing value, if you can't sell it, and it isn't drawing cusotmers in, don't stock it.
You'll do just fine (Score:2)
The business has been successful for some 20 years now (don't have an exact number) on the same model. Our president has (from what I've seen) always placed the customer first. As part of that, the employees are very well treated also - an excellent company to work for. A well-treated employee is able to treat the company's customers well too. A disgruntled employee won't care about the customers or the business.
In short, yes. Some people will be turned off by the higher prices. But those aren't the customers you really want, because they won't be loyal to you one bit. They'll buy once and then the next purchase will be back to the comparison-shopping. However, if you truly bend over backwards to please your customers, the respect you give them will be returned in their continued business and also referrals.
What I think.. (Score:1)
You need to run around like a headles chicken. You can't afford to keep many people around. Your best bet in that respect is to hire high-school students because they will work pretty hard for not too much. I did it because it was better than making pizza, so you probably will get people like me. Just keep them in the back unless they are really congenial.
Cary Linux, BSD, and other such things and know what you are doing with them. The type of person who appreciates quality enough to build the system themselves or get a custom system is going to be interested in those things. Give them good advice, but make sure that they don't get annoyed if they know more than you.
Look the other way when it's not going to be a problem for you. One time, I was upgrading and I fried a DIMM. The place looked the other way and submitted it back to their supplier for a waranty replacement. I made sure to purchase from them from then on, up until they went under.
Cary some geekish stuff, but be careful until you see what kind of clientelle you attract.
Help out the geekish community so they will help you in return. Sponsor LAN parties. Have a Linux install workshop. Things like that.
What to offer them? (Score:1)
Oh, and if you are only worried about the price thing. Point out that the other product cost an extra 1-3 years of _ispname_ at $20-30/month... That WILL increase that machine from $500 to as much as $1600! And don't let them tell you they will just buy the computer then not sign up or quit the service -- "Early Termination Fee".... Most people that have asked for my advice have seen the light when they bring out their calculator.
Good luck! (Score:3)
I hate to sound like you can't win..but have a good plan. You'll find that your wholesale price on parts is what others can get from pricewatch, unless you order 500 of them.
It's hard to work the computer guru angle. They know enough to shop around and order exactly what they want, without paying your markup you need for overhead. The best you can offer them is to have parts when they need them NOW.
Now, the thing you WILL make money on is service. Promote your service...uprades, repairs, small networks, WHATEVER. But this is where you will be profitable and can beat Best Buy and CompUSA.
Competing With The Larger Computer Manufacturers? (Score:1)
Servers (Score:2)
Not only is the technology MUCH cooler, but you can charge higher margins, and the competition (Dell, etc.) actually sell at a high margin as well (which gives you the opportunity to bid low). I would rather sell 1 $20,000 server a week than 20 $1,000 servers. What do you think?
Shoot for biz/gamers (Score:2)
Basically, you'll want to follow AlienWare's strategy for gaming systems. The strat for business customers would be to evaluate what they need and sell them on that (based on what they tell you). Be sure to call it a free service or something (drags in managers). Unless you're planning to run consulting on the side, however, DON'T GO TO THEM FOR FREE! You definitely don't want to spend all your time nursing your customers...
The nice thing about this strategy is that you can keep a low stock and get most of your sales through the Value-added method. Sound confusing enough? Good :)
The problem with capped Karma is it only goes down...
hmmm (Score:1)
My recommendations:
Go with athlon/duron and slash hundreds off your price.
Make the website as professional as you can. Pick a good name. If you appear successful people will often assume you are.
Make your life easier; make windows the default OS. You'd have problems otherwise.
Don't bet on it succeeding. Look at it like a restaurant; you'll most likely go out of business. Try it if you think you can have fun with it, but don't bet the family farm that it will be successful.
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Good Luck (Score:1)
I used to know a guy who ran a small computer manufacturer. He's out of bussiness now, even though his bussiess was one of the first to do customization of computer systems (this was back in like 1992). It's just impossible to compete in price with Dell and Gateway, and in quality to Alienware and Falcon.
Re:Support! (Score:1)
Yes, support.
I have a friend who supported himself for years by offering to come to a person's house and solve any computer problem he had. He had a lot of customers and a simple pricing plan -- US$50 if he could fix your problem and US$0 if he couldn't.
And there are more people every day who need that kind of support. More people are using computers now that the internet is a necessity and most of them are running Windoze. Windoze requires quite a bit of care and attention to work consistently and service will be a great offering point.
Quality hardware and installation support for systems and perhipherals should be a profitable point if you can persuade people that higher prices are worth it. But that's a hard road to go down. And if they were really willing to believe that, shouldn't they be buying Macintosh? -Brian
I hate to be a doomsayer (Score:2)
The margins are razor thin, the value of your inventory drops almost daily, and competetion is fierce.
If you get into this business, you're a brave fellow.
The Personal Touch (Score:1)
We're moving offices - our PBX guys (this after years and years of business) wanted 50% down. The ops mgr. suggested to their sales guy that, as we were long-time customers, that wasn't needed. Sales guy agreed. Then yesterday he came back and said that his corporate office required the 50% down. We started looking for a new provider that morning.
The winner was one of three organizations, two local, one a nationwide company - the winner came to our office first thing this a.m., impressed the ops mgr. w/ his people skills, and showed us a nifty trick w/ the phones we didn't know about.
I rambled, but it is about the personel touch.
Niche for small hardware vendors (Score:2)
You want a computer that's ready to run, no silly shit, and a hefty software bundle? get a standard puter from Dell or compaq.
You want a computer that screams, built to your exact specifications, with the latest and greatest in cutting-edge graphics, a really cool soundcard and some less conventional stuff (e.g. multiprocessor athlon board)? go for a small vendor.
small vendors, because of their limited supply can react faster to the latest hardware.
//rdj
Wrong post (Score:1)
POS / Server / X-terms... (Score:2)
Why go with cheap clients at all? Expensive ones aren't usually necessary, and can be an up-front cost savings for the customer that will allow you to sell the complete package to begin with.
Investigate specific customer needs, such as Point of Sale (retail) or small offices (accountanting groups for example), and spend the time learning what thier main concerns are. Build systems that these groups would kill for. An ideal customer would be a small franchise company that would need the same equipment; small enough to tackle, with potential future sales to the new owners...and possibly other companies that the different owners have.
What I've learned... (Score:3)
You will likely never be able to compete with even Dell on price - but you won't normally be selling all-in-one system boards, will you? That's what Dell and others sell in order to lower their cost. You need to know that the parts and systems you sell are of better quality than those provided "off the shelf" from a cookie-cutter manufacturer. If you don't believe it (sounds like you don't) then your customers won't, and they'll go elsewhere.
Networking and connections count for far more than advertising. If you can't make it as a small business without advertising, you may as well choose another line of work.
Many customers want cheap. Most customers want cheap. Take the time to explain the difference between cheap and inexpensive. You sell inexpensive equipment. The computer they showed you in the ad is cheap. (not always the case, make sure you know what you're talking about)
Customer!=client. A customer will walk in, purchase, and walk out. A client will call you for every need that is computer related. Maintain client relationships. A computer company can make money selling computers for only so long, this is where you get your clientelle from. After everyone who is going to buy from you has bought from you you will live off repeat business. Expect and plan for a finite number of customers, and work from day one turning them into clients.
Distributers such as Ingram Micro, D and H, Infotel, Tech data, etc don't mind working with smaller customers. You can sell inexpensive good quality parts as a small store, you'll just have to tell clients (customers won't understand this) that often parts will take a day (or two at the most) to get, and if they want something immediately then the part will likely be more expensive (ie, you run to another computer store to get it - they don't mind you doing this even though it does cost more - if you have developed the client relationship then they would rather work with you and through you so they will only have one point of contact for all their needs and problems) And, of course, distributers like these will give you what you need to offer MSN and other rebates as well, so you CAN offer the $400 MSN rebate, if that's what they want - I try to steer people away from MSN and AOL as it increases my own support (MSN and AOL both routinely claim "it's a computer problem" when, in fact, it is an internet service problem (ISP))
KEEP ACCURATE RECORDS. Your company will die a horrible bloody death otherwise. DOCUMENT EVERYTHING.
Consider the entire life cycle of a computer system. Customers will not want to spend much, so suggest that they upgrade their old computer - replace the motherboard, CPU, memory and it costs a fraction of a new system.
-Adam
Web developer:
Resume [ubasics.com]