Small Business?

[tjurgens]

Question. Why aren't there more small business startups building these machines? Seems like it would be relatively easy to setup a shop with +1 tech and start mass building and selling machines. How come more people don't do it? With a retail resell license--you could buy all the components for wholesale saving upwards of 5-20% per component. There's at least one store (krex.com) in my area that are doing this... Why aren't there more? How can Dell make money off those $399.99 machines?


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[RichPLS]

You can buy parts on-line just about same price as wholesale, unless you are talking about buying large lots of the same component.
And the competition is fierce, hard to make enough starting out to survive.
Remember, you have to turn lots of products if your looking at a 5-10% markup.
And you better beat those prices of the $399 Dells.

<font color=red><pre>\\//__________________________________
And the sign says "You got to have a membership card to get inside" Huh
So I got me a pen and paper And I made up my own little sign</pre><p></font color=red>

 

[peartree]

Let me just add a few things to Rich's answer. The costs of doing business on a very small scale far outweigh the returns in anything except the satisfaction of a juob well done. As a p.s., the average margin on wholesale for 'ones and twos' quantity is 5-10% max. You may not even get a real discount until you hit quantity 10+.

Besides having to try to compete with the Big Boys like Dell, you also have to compete against Wal=Mart and every big chain store out there AND your customer's 'uncle in the business' who can get a slightly used machine from work or the college. Then you throw in business taxes, advertising, workmen's comp payments, health insurance (shudder), and some kind of physical brick and mortar location. You can't run a mom and pop operation entirely online, it just doesn't work. Then throw in another hundred thousand because you have to assume that you won't show a profit at all for two years and you still need to eat in the meantime.

The point about competing with the big guys is the worst of it, though. THey can sell at those prices, at a profit, because they have what is called the economy of scale- they can go out and buy 50,000 of an item and getREALLY good prices.

To be honest, if you live in an excellent location, with lots of customers who don't already have a favorite source, and you have a few hundred thousand dollars to establish a business presence in the white box market (as it's called), then you may be able to make a go of it.

If you happen to have that money sitting around doing nothing, please contact me, since I live in an area that needs just such an operation.



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[tjurgens]

Thanks for the responses. I'm still unconvinced myself if it's worth it to build or buy. I've never built a machine before; I have installed numerous components. I'm doing my homework now, researching components, purchased an O'Reilly book on building a PC, reading articles and forums, etc.

My proposed machine is over $1000.00 dollars... I've been reading about numerous problems with overheating cpu's, video card incompatibility, cheap case issues, etc. Is it really worth building your own machine? I mean, is the extra power, speed, performance really worth the risk?

<font color=blue>There's no place like 127.0.0.1</font color=blue>

 

[RichPLS]

You get a learning experience, whether good or bad, plus you get a slight, sometimes larger performance advantage all along getting only the components you choose, but you really dont save money, often times costing more than what retailers can offer.
Negatives, you are on your own for support options.

<font color=red><pre>\\//__________________________________
And the sign says "You got to have a membership card to get inside" Huh
So I got me a pen and paper And I made up my own little sign</pre><p></font color=red>

 

[tjurgens]

That last one is a killer. I'm on my own. I think maybe I take some small chances. Ebay has amd64 3000s for $15.00... Maybe I'll piece together something from there first before diving into $185.00 video cards... Thanks for the feedback.

Here's a guy with brick/mortar who's making a business of it.

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=52475&item=5142543998&rd=1

Notice, he's got over 3000 transactions on ebay and if you click on the number you can see many comments are: "Great computer!"... He's selling case, mobo and chip but not always ram? For $299.99?


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[peartree]

At one time in the past, there was real risk involved in building your own machine. That time is largely past, though it does restrict you to keeping to mainstream component manufacturers. Not that that is bad. The only real issue was warranty. Now you can get the same warranty on parts that the dealer does, so that difference is gone. Doing it yourself does have two big pluses- you save the labor cost of letting someone else do it for you, and secondly, you gain a lot of knowledge about how your system works.

Putting it together isn't hard at all, as long as you follow the usual careful practices. Beware of static, no matter what some people try to tell you.

You can start quite a fight around here by simply asking for recommendations of parts . I have my own preferences backed up by over 20 years of experience, but even at that point, they aren't the ONLY good choices.

To answer your question, as long as you don't plan on overclocking, you don't have that much to worry about when choosing a CPU. Buy a boxed retail chip and the factory-chosen cooler usually comes with it. Yes, there are things to watch out for: off-brand memory, old, slow hard drives, and power supplies that really don't supply the rated power. If you do your homework and take the time to read things slowly (paying attention to what you read), you won't have many problems.

In the end, you won't spend any more than you would at, say, Newegg, but you'll be a lot better educated and you'll have the satisfaction of saying "Yeah, I bult it myself".

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[lostinspace]

I just built my first pc too. I went back and forth for months between prebuilt and building. In the end, the more educated I was, the less I liked the idea of getting a gray box with who knows what generic POS is inside it. Sure, it says AMD whatever, but what about everything else? Secondly, the needs I have for the PC(multimedia, gaming) aren't easily found in prebuilts and I knew I was going to be upgrading/adding to them soon anyhow. In the end, comparing the cost of both wasn't too far off, and I knew exactly what I was getting. Not to mention, when you buy all of your own parts, you get the manufacturers warranty for each item. If you buy a box from Best Buy, you are stuck dealing with them for the next however many years.

My best advice (me being a fellow newb) would be this:
If you are buying technology that is starting to get dated, go for it and have fun! Get your parts from a wholesaler(zipzoomfly or newegg) and put them together yourself. Remember it may take some time, and just enjoy the process.
But if you are buying some more recently released items that haven't been out for a while, you may want to consider purchasing your bare bones from a retailer that can test it for you. They will make sure the BIOS and drivers and everything else are current which will save you some heardache. I learned the hard way what it feels like to have your brand new system not do a single thing when you first turn it on. At the same time, learning what is wrong and how to fix it has made me a much more confident pc user though!

 

[lostinspace]

"but you really dont save money, often times costing more than what retailers can offer."

He is right, you really won't save any money. But, you will have the ability to pick and choose exactly the options you want or don't want. For instance, wasting money on a box PC with on board graphics when you are going to purchase a seperate graphics card anyhow.

"Negatives, you are on your own for support options."
That isn't really a bad thing. Anyone here ever spend two hours being talked down at by the jerks at the Best Buy window? Anyone ever hear stories of people paying for 3 hour phone calls to Dell for support? Buying a box automatically locks you into whatever service that retailer is providing you.

Internet forums are all the service you should need, I was able to do it with the help of all these fine people and I had a much better experience than waiting in line at Best Buy.

 

[tjurgens]

Thank you all for your exceptional comments and feedback. This post really should be a sticky for all newbies. I'm gonna go for it...

I just tore apart my old Gateway 120mhz tower--dismantling everything. This gave me some basics with how components are mounted, connected, fitted, etc. in the case. I've got HDD's, opticals, zip drives, floppies--all I need is the mother, her hubby (CPU) and the children (RAM)... and a couple of extras--new psu, fans, etc.

Thanks again to all.


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[peartree]

Let us know if you actually can get that CPU for $15 . Somehow I doubt it.

One last item we haven't touched on is the combination of case and power supply.

The case is importnat, of course. Without a solidly built case, your parts won't have a secure framework. Not to mention which, it can make mounting the motherboard a real trial. I favor cases that have some kind of side door over ones that have slide-off panels, but then I spend more than average time adding or changing parts. I don't care, it's still useful. It lets you clean dust out of the interior more easily and anything that's easy tends to get done more often. And cleaning the inside is a good thing to do.

As for the power supply, go fo one from a name-brand manufacturer. Pure and simple- if you pick a quality power supply, it will save you endless problems down the road. Its well worth the extra $25 or $50 it might cost.

Then go out and get yourself an external Uninterruptible Power Supply for that last piece of security.

Oh, yes, about the video card? In your situation, I'd go for an nVidia-powered 6600 at about $149. If you pick the right motherboard, you'll be able to buy another one and run the pair for as much performance as a 6800 card without spending the $400+ up front.

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