What is the resale value of this item?

[Tomato311]

Hi everyone,

If I were to resell this PC rig on ebay.co.uk assembled with OS installed how much do you think it would make?

http://uk.pcpartpicker.com/p/3cF6G

 

[usbgtx550]

I would shoot for the 500 to 600 area.

 

[Xiembeest]

I'd say 400-500, but depending on your country, you can get up to 600.

 

[Tomato311]

I would shoot for the 500 to 600 area.

That's a bit [removed] because it's going to cost £750. I mean to sell it as soon as the pieces arrive and I have assembled it, not after using it for a while. Why is your estimate so low in comparison to the original price?

Thanks for your quick answer btw.

Tom

Watch the language. - G

 

[g-unit1111]

It's way more complicated to calculate how to sell a good at a certain price than if you sold your existing system on eBay so I will try to explain it this way:

The easiest method for this is to first calculate your cost of goods manufactured. To do that it's:

Cost of direct materials (as in what you purchased)
+ cost of direct labor (hours you spend building PC x hourly rate)
+ overhead (equipment setup and testing, shipping, etc)
+ Beginning inventory (work in process)
- Ending inventory (completed goods)
-------------------------------------------------
Cost of goods manufactured


So if your direct materials are £751.03, then it would be calculated this way:

£751.03 (direct materials)
+ £50.00 (direct labor, estimated)
+ £75 (overhead, estimated)
+ £1000 (beginning inventory, estimated)
- £750 (completed goods)
--------------------------------------
£1126.03 is the base price that can be determined for the base sales price.

If you want to calculate exactly there's lots of other factors to take into account like machine hours to determine overhead rate (total budgeted overhead / basis), what your beginning and ending direct materials and labor are and so on and so forth.

 

[usbgtx550]

I would shoot for the 500 to 600 area.

That's a bit [removed] because it's going to cost £750. I mean to sell it as soon as the pieces arrive and I have assembled it, not after using it for a while. Why is your estimate so low in comparison to the original price?

Thanks for your quick answer btw.

Tom

Watch the language. - G

Oh, ok. So your essentially building this for the sole purpose of selling it, entailing a new computer.

I was working with the assumption that this was very much a used computer. It can be a bit trickier determining the price then. I would suggest going to a custom pc maker's website (i.e. ibuypower) and spec a similar build to see what their profit margins would be.

 

[g-unit1111]

Oh, ok. So your essentially building this for the sole purpose of selling it, entailing a new computer.

I was working with the assumption that this was very much a used computer. It can be a bit trickier determining the price then. I would suggest going to a custom pc maker's website (i.e. ibuypower) and spec a similar build to see what their profit margins would be.

No that's not the way to go about doing business. There's an exact science to calculating price and it's standard accounting principals. You can't just guess by what competitors are selling, especially if you plan to run your own business manufacturing PCs. There's overhead, there's labor involved, there's machine setup and depreciation, there's beginning and ending inventory, work in process, all kinds of other factors. There's no such thing as guesstimating in accounting when running a business that manufactures goods like this. There just isn't.

 

[FractalDesignCore]

It's way more complicated to calculate how to sell a good at a certain price than if you sold your existing system on eBay so I will try to explain it this way:

The easiest method for this is to first calculate your cost of goods manufactured. To do that it's:

Cost of direct materials (as in what you purchased)
+ cost of direct labor (hours you spend building PC x hourly rate)
+ overhead (equipment setup and testing, shipping, etc)
+ Beginning inventory (work in process)
- Ending inventory (completed goods)
-------------------------------------------------
Cost of goods manufactured


So if your direct materials are £751.03, then it would be calculated this way:

£751.03 (direct materials)
+ £50.00 (direct labor, estimated)
+ £75 (overhead, estimated)
+ £1000 (beginning inventory, estimated)
- £750 (completed goods)
--------------------------------------
£1126.03 is the base price that can be determined for the base sales price.

If you want to calculate exactly there's lots of other factors to take into account like machine hours to determine overhead rate (total budgeted overhead / basis), what your beginning and ending direct materials and labor are and so on and so forth.

+1 Great work g-unit glad to see you posting on these forums

 

[FractalDesignCore]

System double posted...

 

[g-unit1111]

[
+1 Great work g-unit glad to see you posting on these forums

Hey I do what I can! I'm a beginning accounting major so it definitely helps to know this stuff. :lol:

 

[usbgtx550]

Oh, ok. So your essentially building this for the sole purpose of selling it, entailing a new computer.

I was working with the assumption that this was very much a used computer. It can be a bit trickier determining the price then. I would suggest going to a custom pc maker's website (i.e. ibuypower) and spec a similar build to see what their profit margins would be.

No that's not the way to go about doing business. There's an exact science to calculating price and it's standard accounting principals. You can't just guess by what competitors are selling, especially if you plan to run your own business manufacturing PCs. There's overhead, there's labor involved, there's machine setup and depreciation, there's beginning and ending inventory, work in process, all kinds of other factors. There's no such thing as guesstimating in accounting when running a business that manufactures goods like this. There just isn't.

You got me in that regard. I suppose you can still always see competitors' pricing to at least give a consumer a fair deal/

 

[g-unit1111]

You got me in that regard. I suppose you can still always see competitors' pricing to at least give a consumer a fair deal/

That might help you determine fair pricing but determining actual costing for a business selling PCs there's far more internal accounting that needs to be done than external accounting. When you go to setup a business that sells goods you have to figure out how many units you need to sell in order to break even, and how many you need to sell beyond that to get to your target net income. All companies have a target net income which is the amount of money they need to generate per month to stay profitable and cover all expenses. You've got all the costs I listed, plus you have to figure out machine hours and setup (equipment setup and testing) and how much that costs. You also have to figure those costs into total overhead. It really isn't about the competition. It's about your business and your costs to determine how much profit you can make for your business by doing all the overhead costing and factoring. There's a lot more that goes into it than just "see how much others are charging and go for it". I don't think any accountant in the world would agree with that logic. Once you figure out the materials and labor costs, and then all the overhead expenses that is how you can price your systems so that when you sell them it generates you revenue for your business. IBUYPOWER's pricing relates to their business and their business only as it's enough to cover the direct materials, fixed costs, and labor that goes into their PCs. And then they have a break even point that they have to make. If you want to start a business selling PCs you have to determine your own break even point based on how many systems you plan to sell at the price you plan to sell them for. I could go on and on. :lol:

 

[Tomato311]

It's way more complicated to calculate how to sell a good at a certain price than if you sold your existing system on eBay so I will try to explain it this way:

The easiest method for this is to first calculate your cost of goods manufactured. To do that it's:

Cost of direct materials (as in what you purchased)
+ cost of direct labor (hours you spend building PC x hourly rate)
+ overhead (equipment setup and testing, shipping, etc)
+ Beginning inventory (work in process)
- Ending inventory (completed goods)
-------------------------------------------------
Cost of goods manufactured


So if your direct materials are £751.03, then it would be calculated this way:

£751.03 (direct materials)
+ £50.00 (direct labor, estimated)
+ £75 (overhead, estimated)
+ £1000 (beginning inventory, estimated)
- £750 (completed goods)
--------------------------------------
£1126.03 is the base price that can be determined for the base sales price.

If you want to calculate exactly there's lots of other factors to take into account like machine hours to determine overhead rate (total budgeted overhead / basis), what your beginning and ending direct materials and labor are and so on and so forth.

Thanks a lot for this, great answer!! This probably won't develop into a big business like you're suggesting (I'm only 13 - I just want a hobby!) but this will help me in the future greatly. Thanks again,

Tom.

 

[g-unit1111]

Thanks a lot for this, great answer!! This probably won't develop into a big business like you're suggesting (I'm only 13 - I just want a hobby!) but this will help me in the future greatly. Thanks again,

Tom.

Sure, I'm an accounting major so it is definitely helpful to know this stuff especially if you want to start your own business manufacturing goods like PCs. Like I said just guessing at what the competition is selling their PCs for is not the way to go. Their prices are the end result of countless man hours spent internalizing their manufacturing processes and labor hours and it mainly curtails to their business only. What you decide to sell your systems for will curtail to your business only.