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Legal issues with selling systems?

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  • Systems
  • Business Computing
Last response: in Business Computing
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June 5, 2013 1:42:50 AM

Hi all,
Not sure if this the right place to post this so feel free to move it if it should be elsewhere.

Basically I want to start selling PC systems as a sort of hobby. I am planning on just buying parts from my local store and selling the system on ebay. I have an immense knowledge of what it takes to get going on ebay and everything there and that isn't where the problem lies.

I am wondering if there are legal issues with buying and reselling parts without being a business or anything of the sort? Such as do the hardware manufacturers (gigabyte etc) have rules about it? Or would my local store have a problem with it?

any answers would be great

Cheers

More about : legal issues selling systems

June 5, 2013 4:51:48 AM

Start with walking into your local small biz rep. Most towns have them and they can help getting funding and question on starting your own small biz.
The first is to walk into your local town hall and register as a dba. If you fail or there issue want keep the biz part separate from your home. after you have your dba running contact newegg and other vendors for a resale license. When your selling parts you need to know the day to day map pricing of a part. Selling a part below map is a no no. With windows you have to give them hard media disks or restore image.
Microsoft msdn and other give free one day classes on windows slipstreaming and tools that allow you to make your own custom windows installer. to be able to roll back windows to the Oem reg screen after your done burn in testing of a pc.
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June 5, 2013 5:06:04 AM

Cheers for the response.

I forgot to mention that i live in Australia if that changes anything. If i have to register as anything I'm not going to bother.
All I want to do is someone give me money for a computer that i spec up, I buy the parts and build it and then send it to
them. Is it legal to just go right ahead and do that?
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June 5, 2013 3:30:59 PM

kerfuffel said:
Cheers for the response.

I forgot to mention that i live in Australia if that changes anything. If i have to register as anything I'm not going to bother.
All I want to do is someone give me money for a computer that i spec up, I buy the parts and build it and then send it to
them. Is it legal to just go right ahead and do that?


That depends entirely on your local business environment and government.
People sending you money, you sending them goods.

Are you liable for warranty (whether specified or not?) Some places, yes.
What happens when a part breaks? Who is on the hook for the replacement? Down time? Loss of data?
Could you be sued for non-performance? Maybe. Even if you win, you've paid a lot.
Are you liable for collecting and reporting sales tax/VAT? Why or why not?

Unless you're only doing it among friends for beer money....talk to a lawyer and the local business community.

Finally, convince me why I should pay you to put together the LEGO pieces I could put together myself.
Or why I should buy from you vs. Dell.

What benefit do you provide?
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June 6, 2013 1:07:31 AM

These challenges are quite average when it comes to business matters, so take this as a positive experience and establish yourself to a good standard.
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June 7, 2013 8:12:54 PM

USAFRet said:
kerfuffel said:
Cheers for the response.

I forgot to mention that i live in Australia if that changes anything. If i have to register as anything I'm not going to bother.
All I want to do is someone give me money for a computer that i spec up, I buy the parts and build it and then send it to
them. Is it legal to just go right ahead and do that?


That depends entirely on your local business environment and government.
People sending you money, you sending them goods.

Are you liable for warranty (whether specified or not?) Some places, yes.
What happens when a part breaks? Who is on the hook for the replacement? Down time? Loss of data?
Could you be sued for non-performance? Maybe. Even if you win, you've paid a lot.
Are you liable for collecting and reporting sales tax/VAT? Why or why not?

Unless you're only doing it among friends for beer money....talk to a lawyer and the local business community.

Finally, convince me why I should pay you to put together the LEGO pieces I could put together myself.
Or why I should buy from you vs. Dell.

What benefit do you provide?


Good points you bring up. I'm planning on doing the same, although not selling on ebay, selling custom builds on my website and through phone service. Mainly just because I'm 18 and have spare time on my hands, so I figure since the prices will be so low, I may get the opportunity to work on some systems.

I'm also worried about the legal side of what I'll be doing. I heard under a certain amount of money ($6000 or so), it's classified as a hobby (I won't come near making that much, I figure this deals with all of the tax questions I had). As for the whole, they broke it and blame you anyways, from what I've read so far, as long as somewhere you state you're not liable, you don't provide warranties, blah blah blah, small claims courts will favor you (if it goes that far) and you shouldn't be worried about anything if you're honest the whole way through the pc selling process, from the customer ordering, to them receiving.

Another silly question I had, what about payment? I figured it was best to have them "buy" the pc after going over with them what they need, and then once the money is put into paypal (including the price for labor, installing water cooling, overclocking, etc...), I then buy those parts, paying through the paypal they put the money into, build it, send it to them.

Also, how in sams name do I send a system with a water cooling loop installed through UPS!? Isn't there a very high chance it will leak?!
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June 8, 2013 7:14:31 AM

Whether you are planning to do something on the side, or just part time for something to do, you need to consult with 1) a lawyer, and 2) an accountant. For the simplicity and cost they may recommend setting up a Sole Proprietorship, dba, or whatever similar it may be in your country. They will also tell you things you need to be watching for when it comes to selling goods because tax laws, resale laws, etc. are always going to be there. When I first started out working for myself, I was just doing work on the side as a sole proprietor. It cost nothing to start, just a one-time cost for consulting with a lawyer and accountant to make sure I was squared away. Once things got busier and I knew I wanted my business to grow, I made the investment to go with an LLC and consulted with my lawyer and accountants again.

When it comes to signing forms waiving liability, that really is just for show. Trust me, while it can sometimes help, it's definitely not removing you from liability. There is another computer company in my town who had a business' server in their shop to work on upgrading and during that time they damaged hardware in the server which led to some data being lost. Even though the customer signed a waiver that said the repair shop was not liable, they were taken to court and lost a LOT of money for negligence. These are things you have to be aware of. If you're going to be building computer systems for people, even if they sign a waiver, you have to approach it as you are liable because really you are. Now, fortunately I have never been in that situation *knock on wood* but if it is not something you are prepared for, you should really consider how much you want to do this.

Finally, GMPoisoN you asked about shipping a computer system with water cooling. Yes, that's a pretty big risk from shipping damage that a leak will occur. I know that AMD systems have also in the past been a little more of a risk than Intel systems due to their processors having physical pins still which, during transit, a forceful bump or jostle can actually cause the weight of the CPU cooler to pull on the processor and bend pins. There are ways to try and get around shipping problems like this, but it's pretty difficult on a water cooled solution. A simple closed-loop solution like the Corsair H80 or Antec Kuhler systems are built better with less chance of leaking, but as for a full liquid cooled solution, my suggestion honestly would be to stay away from shipping these systems until you are ready to have some of those systems possibly returned on you due to damage.
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June 8, 2013 4:43:50 PM

choucove said:
Whether you are planning to do something on the side, or just part time for something to do, you need to consult with 1) a lawyer, and 2) an accountant. For the simplicity and cost they may recommend setting up a Sole Proprietorship, dba, or whatever similar it may be in your country. They will also tell you things you need to be watching for when it comes to selling goods because tax laws, resale laws, etc. are always going to be there. When I first started out working for myself, I was just doing work on the side as a sole proprietor. It cost nothing to start, just a one-time cost for consulting with a lawyer and accountant to make sure I was squared away. Once things got busier and I knew I wanted my business to grow, I made the investment to go with an LLC and consulted with my lawyer and accountants again.

When it comes to signing forms waiving liability, that really is just for show. Trust me, while it can sometimes help, it's definitely not removing you from liability. There is another computer company in my town who had a business' server in their shop to work on upgrading and during that time they damaged hardware in the server which led to some data being lost. Even though the customer signed a waiver that said the repair shop was not liable, they were taken to court and lost a LOT of money for negligence. These are things you have to be aware of. If you're going to be building computer systems for people, even if they sign a waiver, you have to approach it as you are liable because really you are. Now, fortunately I have never been in that situation *knock on wood* but if it is not something you are prepared for, you should really consider how much you want to do this.

Finally, GMPoisoN you asked about shipping a computer system with water cooling. Yes, that's a pretty big risk from shipping damage that a leak will occur. I know that AMD systems have also in the past been a little more of a risk than Intel systems due to their processors having physical pins still which, during transit, a forceful bump or jostle can actually cause the weight of the CPU cooler to pull on the processor and bend pins. There are ways to try and get around shipping problems like this, but it's pretty difficult on a water cooled solution. A simple closed-loop solution like the Corsair H80 or Antec Kuhler systems are built better with less chance of leaking, but as for a full liquid cooled solution, my suggestion honestly would be to stay away from shipping these systems until you are ready to have some of those systems possibly returned on you due to damage.


Thank's for that reply! I will most likely just be doing this for a summer job, building maybe, MAYBE, 1-2 pc's a month, so I don't think there are many legal issues I have to deal with, maybe do some reasearch on making a little liability thing they can agree to before buying, like an "Agree to the terms of use" type deal.

As for shipping goes, If anyone wants custom water cooling, I will ship it full of peanuts (I've heard of people doing this with non static peanuts, so absolutely nothing moves around in the case, even tubing, it all stays in place), in the box the pc came with, then in another box from UPS or whomever, with foam in the middle of the two boxes. If they don't want GPU liquid cooling, I will remove it, and ship it in the box it came in with peanuts in it.

Again, thank's for your response!
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