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Starting own custom pc bussines?

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Last response: in Systems
August 13, 2006 1:44:19 PM

Hey i was thinking the other day i would like to start my own custom pc slling company, similar to the likes of alienware and the others.

Problem is i have no idea where to start i have no idea how someone starts this.

For example im guessing i would start low down by selling pc builds on ebay, but where does one get the components at a low enough price to make a profit?

More about : starting custom bussines

August 13, 2006 2:19:48 PM

I tried this back in 2000. Best bet is to contact retailers/wholesalers and see what discount they are willing to give you with bulk purchases and the promise of doing business with them in the future.

Now...

There are a million other people doing this especially on Ebay.

You need to stand out. You can not make any money if your only advantage is price, you will need to provide a service or feature that will make your systems worth paying more for.

Also set up a plan for service and exchanges you'll deal with them and there is no way around it. 90% of your service issues will infact be user error. You are going to get blamed for their inability to use their system properly.

Sorry to sound negative. I've been there, its nearly impossible to compete by price alone. There is a reason your local small volume computer shop does NOT have the best prices in town, but they offer the personal level of service close to home that some people feel is worth paying for.
August 13, 2006 2:23:13 PM

in addition don't use pirated software!
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August 13, 2006 2:36:41 PM

well say i wanted to offer stylish pc's, for individual tasks 'home theatre/gaming/audio/proff designers', and have my own company case, like what alienware and other companies do, is this possible for someone like myself (avarage joe) to start up, or do you need alot of money to start something like this, i mena for example i goign to have to get the custom case designed etc?
a b B Homebuilt system
August 13, 2006 2:37:16 PM

For example im guessing i would start low down by selling pc builds on ebay, but where does one get the components at a low enough price to make a profit?[/quote]

That my friend is the billion dollar question. :) 

Without getting too carried away or in depth here, if you think you can assemble PC's with new parts and just put them on Ebay, or advertise anywhere for that matter, and sell them for an actual profit, you are getting into one of the most widespread super-competitive markets on the planet. Trying to target the high-end performance PC enthusiast is by far even tougher. Much more expense in overhead to purchase only high end parts selling to the smallest segment of the PC market.

Most people who would have a high end PC would rather build themselves.

In order to purchase directly from a manufacturer, say Intel for instance, you would first need a resale tax exempt certificate (so you don't have to pay taxes on items you purchase intended for resale) you need a business license for city you live in, you need a federal tax ID number, and, here is the most important thing

-you have to be able to buy parts in large lots, CPU's for instance start in lots of 1000. If you can't afford to be able to buy in large quantity, you will pay pretty much what everybody else does, which means the only value of your prebuilt system is that you have already built it.
Now, for that to be of any real value to a buyer, you have to back it with some kind of a warranty. Do you have the resources to replace bad motherboards, CPU's video cards, etc. at your expense while waiting on returns or reimbursements from the manufacturer? Spending all day on the phone with people troubleshooting?

Of course then there is the whole accounting issue and sending Uncle Sam his share of your profits. You DO have to pay taxes on your profits :cry: 
August 13, 2006 2:42:44 PM

well i am from the uk, but it does sound very troublesome, even still i would like to to make a bussiness say similar to alienwre, but with better pricing, i could be and probably am very wrong, but i dont think alienware need to charge that much for there systems, i bet they could cut there prices in 1/2 and still make a profit, or am i wrong?
a b B Homebuilt system
August 13, 2006 2:52:00 PM

That is another issue indeed!
VAT, very expensive shipping, all the different monetary conversions rates, and everyone else's conversion rates except the British pound being much lower than your Euro, you are really going to have a tough time selling to anyone outside of the UK.
August 13, 2006 2:54:44 PM

Thanks for your useless feedback, i am able to spell, however i am a lazy typer. Please only usefull feedback not quick witted remarks.
a b B Homebuilt system
August 13, 2006 3:05:19 PM

Not really. Remember the type of PC you going to build will also require some of the most intense and expensive after the sale support. All new technology, which is usually buggy, and users who are striving for the ultimate PC experience. In other words, if I pay $7000 for a very high end PC, I would be on the phone with you for every little issue and you better be ready to soothe my complaints very quickly or you will have my PC back in your hands and a reverse charge for the entire purchase amount coming to you from my credit card company.

And, like I said, if you have to RMA parts, you are RMAing EXPENSIVE parts, many of which the warranty may be voided if you have clocked them past the factory settings, so if one burns up, you pretty much eat it.

Now you can probably do this and make a little money, but it's a hard way to make a living until you've built up a solid and well known reputation as a quality builder with excellent support.
August 13, 2006 3:21:04 PM

thought you would like to know, if you wanted a fully custom case, it would cost several hundred thousand dollars, thats assuming that you acually get a fully customized case, though of course the smarter idea would be to get a pretty cool case, custom badges then just stick them on, though it would also be a good idea to find out about the legalities of that

edit: when i say custom case i mean from factory, not by yourself...though if you want to do that, and you were successful it wouldnt be viable, you might get backlogged
a b B Homebuilt system
August 13, 2006 3:42:08 PM

Quote:
well i am from the uk, but it does sound very troublesome, even still i would like to to make a bussiness say similar to alienwre, but with better pricing, i could be and probably am very wrong, but i dont think alienware need to charge that much for there systems, i bet they could cut there prices in 1/2 and still make a profit, or am i wrong?


Here is another reason why Alienware is so expensive. Think about it.
As a resource for high end units, they cannot buy huge quantities of parts to get the best prices. Would you buy 500 or 1000 ATI X1900XT video cards and hold in stock for building and selling high-end equipment?
Of course not! Before you could even get a half of them used, a newer high end card is going to come out, making your product only second best in the mind of the consumer you have targeted. So, Alienware I am sure is buying in small quantity, heck they may not even buy until you order. So they are paying very close for parts what anyone would pay. The only value, as I and several others have mentioned is support after the sale. If you have ever been in business before, this can be hugely time consuming and costly, not counting that the government, no matter where you live, will take nearly half or your profits back in taxes one way or another.
August 13, 2006 3:49:51 PM

I do this as a small (very small) side business, and I won't hesitate to tell you that there two and only two ways to make money at it. Volume, and boutique high end.

In order to produce in volume means having employees and and a very large initial capital infusion. You need advertising, supply contracts, etc. This approach would likely mean developing a business plan and then trying to secure small business loans to get started . . . or trying to get your rich uncle to give you your inheritance early.

On the other end of the spectrum is building high end computers in small batches (probably no more than 1 per week, per builder). This will also need an advertising budget and some form of initial capital investment. But you will be less sensitive to supply disruptions, and the margins on higher end systems are much greater than at the low end.

Either way, I would start very small and build the business gradually; expanding as demand dictates. I've been doing this for 4 years now and all of my business come through referrals. But ultimately superior service is where it's at, I offer six, free, onsite tech support visits in the first six months and try to avail myself to people via e-mail at all times. Furthermore you should try to be more than just a system builder; if you have the technical know-how, I'd strongly urge you to include consulting services (networking, troubleshooting, onsite computer repair, etc.) in your portfolio of services.

The bottom line is that this is not a business to do as a means of getting rich quick, It takes a long time to build a services business that has such small margins and so much competition.

Good luck.
August 13, 2006 4:13:19 PM

Thanks for your feeback, this wouldnt be a get rich quick thing, this would be to become a well known good supplier or great performing computers that arn't extremly expensive.
August 13, 2006 4:28:34 PM

you might be better off starting a local shop where you sell parts and custom built pc's. See if you can keep your prices lower than most competitors around and promise quality that manufactured computers do not have( which is true in most cases) You can use the ebay idea to get enough money to rent or build a space (renting is cheaper). Now your home town/city has a local computer store that is convenient for them if they are just looking to buy pc stuff. You can also offer hardware repairs/ replacements/ upgrades and crap like that. If you know how to do maintanance stuff (IE defragging, checking for unneeded spyware crap that is loaded on the computer) you could make a load of money on that alone. I do some simple maintanance to my friends computers to help them run better and my friends are like man your smart you should get paid for this. Heh, you just gotta use what you know that lost of other people do not know to your advantage.
August 13, 2006 4:36:05 PM

Quote:
Thanks for your useless feedback, i am able to spell, however i am a lazy typer. Please only usefull feedback not quick witted remarks.


Not to start anything but you should really re-think this, it was not really useless feedback. When you're running a small business, which I do, your customers are dealing with you and it's the little things that make a big difference, e.g., grammer, spelling, punctuation, your speech, appearance, how you carry yourself, etc. There are plenty of competitors offering whatever serices or products you are and ultimately they'll buy from you because of how they perceive you. In addition, if you're going after the high end market, which makes sense if your starting out small, you'll be dealling with mostly well educated people who are oftenmore sensitive to the above menteioned things. The best way to ensure you'll make a good impression is to maintain high standards at all times includig writing on forums, it will become a habit. Just something to consider
August 13, 2006 4:40:08 PM

thand you thats more helpfull, im thinking that the ebay way would be a goo d way to start up to get enough to open a shop or start a bussiness.

But how would i go about starting the ebay way? would i need upfront money first, a loan etc?
August 13, 2006 4:47:05 PM

Quote:
Hey i was thinking the other day i would like to start my own custom pc slling company, similar to the likes of alienware and the others.

Problem is i have no idea where to start i have no idea how someone starts this.

For example im guessing i would start low down by selling pc builds on ebay, but where does one get the components at a low enough price to make a profit?


Everyone should have a dream. But the difference between a dreamer and a successful entrepreneur is experience, knowledge and capital. Reading your post leads me to believe you don’t yet have much of any of these ingredients. Without them, your chances of being successful are about the same as winning the lottery.

Simply building a few PC’s in your garage doesn’t prepare anyone to run a profitable computer business. It barely qualifies you to be an assembly technician in a local shop, and this is exactly what I suggest you do. This approach will allow you to gain:

1..Experience- What technical and support problems you must deal with.

2. Knowledge- Parts sources and cost, where the customers come from and how to attract them, and most importantly, pricing and profit margins.

3. Capital- Savings from your wages

In time, you’ll be able to build a few systems in your spare time, and ease into building your own profitable business, without depending on it for your livelihood. It’s not as easy as it looks, but it’s possible to realize your dream, if you work hard and be patient.

Good Luck! :) 
August 13, 2006 4:57:40 PM

Im not a dreamer, hence i am here asking for everybodies help, i have no knowledge of this so i am here learning rather than goign out and buying components. I would liek to thank everyone so far for there support and knowledge, i know poeple may think i am a noob with a computer thinking its easy to make a million by selling computers, but that isnt why i want to do this for money, i would like to make a good company thats sels great products for value. But i need to know where to start becuase i am blind atm.
August 13, 2006 4:59:24 PM

the thing about being in canada is that everyone sells more expensive stuf, even with the exchange rate, so i coudl take advantage of that easily(which we did), it was owned by an adult, but the comp store was run by a frnd of mine, he hired me and a few of his other frnds

its fun, but u hav to keep up with a lot of stuf, when ur small its fine, but if u do manage to become big at all with ppl recommending u left and right u hav to keep up

stock is ur biggest problem imo
August 13, 2006 5:01:12 PM

If you are really serious about starting your own business and have no idea what to do, I would highly recommend some business classes . . . not even a degree; just get a bit of an education. Being "blind" going into something like the venture you are talking about is a recipe for disaster. And while getting some advice here is a good start, you need business savvy and acumen - that's something that is going to be in woefully short supply on any message forum.
August 13, 2006 5:11:49 PM

A real big part of this is getting your name out there, you might not be able to afford air time on TV but radio and newspaper adveritising is relatively cheap. If you could market towards the "going to college crowd" alone, you could have a steady business is a decent sized college town.
While I haven't made myself an official business yet, I do let the word spread around that I can repair (most problems) and build PCs according to peoples need and price ranges. I started out just building 2-3 for friends and they were really impressed and I had fun so I started spreading the word around, eventually I had parent's coworkers becoming interested and when I went to college, man that was bank. Students have this inate fear of going to the IT office, even though its free reapairs and such (at my college everyone had to buy the same laptop so it was very easy to service them with a few items). At first i would ask like 5-10 bucks or lunch for the cost but when people outside of my friends got interested they would offer me like $50 for something as simple as removing some spyware and adding a few utilities. Over the past 3 years in college i've probably made over $2000 which really helps out alot I must say. Most of this stuff isn't even difficult to do really. Half the time its guys who get viruses and spyware from DLing too much porn or using Limewire, nothing norton and adaware can't fix.
August 13, 2006 5:12:55 PM

yeah i agree, i am trying to find out if this would be an option for me, becuase its something i would really like to do.
August 13, 2006 5:20:28 PM

Quote:
A real big part of this is getting your name out there, you might not be able to afford air time on TV but radio and newspaper adveritising is relatively cheap. If you could market towards the "going to college crowd" alone, you could have a steady business is a decent sized college town.
While I haven't made myself an official business yet, I do let the word spread around that I can repair (most problems) and build PCs according to peoples need and price ranges. I started out just building 2-3 for friends and they were really impressed and I had fun so I started spreading the word around, eventually I had parent's coworkers becoming interested and when I went to college, man that was bank. Students have this inate fear of going to the IT office, even though its free reapairs and such (at my college everyone had to buy the same laptop so it was very easy to service them with a few items). At first i would ask like 5-10 bucks or lunch for the cost but when people outside of my friends got interested they would offer me like $50 for something as simple as removing some spyware and adding a few utilities. Over the past 3 years in college i've probably made over $2000 which really helps out alot I must say. Most of this stuff isn't even difficult to do really. Half the time its guys who get viruses and spyware from DLing too much porn or using Limewire, nothing norton and adaware can't fix.


This sounds like something i could realle do, this would help me get through university (which im in).
August 13, 2006 5:33:09 PM

Sorry to pour cold water on this, but my advice is just to forget it. While it may seem cool to think of developing your own company like Alienware, your posts indicate that you lack the knowledge to do this. This knowledge is also not what you are going to get through posting to a forum.

Also, building PCs is an extremely competitive market at present, so the chances of you even breaking even are close to nil - much less actually making money to pay for your wages. Consider the amount of money you could realistically expect to make on a PC at present to be price competitive - but you then need to consider that you will need to buy new CPUs, video cards, etc. whose price goes down before you have a chance to sell them. The loss on these items is likely to absorb any profit you make from the PCs yourself.

Don't forget that the reason companies such as Alienware were able to develop was because they identified the business opportunity of developing boutique computers before others had - so it wasn't so competitive at the time. It is likely now too late to be able to get into this market, unless you have major funds to be able to become competitive and to support your losses over a number of years while you slowly develop your brand until it finally develops the market presence that enables it to charge a premium and ultimately results in a profit.

As others say, first thing you need to do is get some basic knowledge about businesses - eg, reading books and attending courses. Unfortunately, I suspect that even this will be too hard a step for you to do - since your lack of knowledge indicates that you haven't already done this, in contrast to someone who really does have the potential to start up a successful business. However, if you do get some education about businesses, this is likely to dispel any ideas you have about the likely viability of what you propose. It will be more a case of losing a lot of time and money into something that doesn't succeed. Again sorry, but this is being realistic.
a b B Homebuilt system
August 13, 2006 5:36:15 PM

Quote:
A real big part of this is getting your name out there, you might not be able to afford air time on TV but radio and newspaper adveritising is relatively cheap. If you could market towards the "going to college crowd" alone, you could have a steady business is a decent sized college town.
While I haven't made myself an official business yet, I do let the word spread around that I can repair (most problems) and build PCs according to peoples need and price ranges. I started out just building 2-3 for friends and they were really impressed and I had fun so I started spreading the word around, eventually I had parent's coworkers becoming interested and when I went to college, man that was bank. Students have this inate fear of going to the IT office, even though its free reapairs and such (at my college everyone had to buy the same laptop so it was very easy to service them with a few items). At first i would ask like 5-10 bucks or lunch for the cost but when people outside of my friends got interested they would offer me like $50 for something as simple as removing some spyware and adding a few utilities. Over the past 3 years in college i've probably made over $2000 which really helps out alot I must say. Most of this stuff isn't even difficult to do really. Half the time its guys who get viruses and spyware from DLing too much porn or using Limewire, nothing norton and adaware can't fix.


This sounds like something i could realle do, this would help me get through university (which im in).

This really is a great way to start and build your reputation. By the time you graduate, you will have experience, knowledge, and a better foundation to get started with a serious business model.
August 13, 2006 5:42:04 PM

Well I still plan on keeping it as a thing on the side, I didn't pay 150 grand to go to pharmacy school to make a hole in the wall comp company :p  But yeah even just doing it on the side in college will help you get some money, god knows i go through alot of it, still eating rice and ramen tho, i blow all my money on booze and computer parts lol.
August 13, 2006 5:44:07 PM

It does seem like a very difficult path to choose, but im still interested in what people have to say, who are already doing this. thanks again for your opinions so far.
August 13, 2006 5:47:45 PM

in the one year i was doin this, we had store space rented for us, this helped big time, also knoing ppl already working in the industry
August 13, 2006 5:49:00 PM

Quote:
in the one year i was doin this, we had store space rented for us, this helped big time, also knoing ppl already working in the industry


This is something i do not have, connections.
August 13, 2006 5:55:57 PM

I ran a comp business for 3 years, got sick of customers :)  It's hard work, and if you don't know all the intracacies (can't spell that) of what you sell, you will go under very quickly.

Take some time to fix everything you can get your hands on. Brush up on people skills. The most important thing any of my customers ever told me, and still do, was that I could speak techno and still make them fully understand it. Dell can't do that :) 
August 13, 2006 6:06:27 PM

Michael has a good suggestion above. Along that line, you might consider offering a "computer shopping" or consulting service where you would help customers specify exactly what system or components they should buy. I think one of the biggest phobias that the general public has is buying the "wrong" computer or parts because they don't understand the difference. Just look at all the posts here asking for comments on parts selection.
This has the advantage of not stocking inventory, but will be more difficult to scale up.
August 13, 2006 6:08:25 PM

everytime u try to explain jargon to someone, jus say its bascially means"........"
August 13, 2006 6:22:45 PM

Quote:
everytime u try to explain jargon to someone, jus say its bascially means"........"



yeah thats it was i usually do, people often say i am clever for fixing there computer or problem. Its usually something simple tho, luckily i have a few years of experianc eof building my own computers, and have extensive knowledge of problems with pc's, software and hardware.
August 13, 2006 7:54:54 PM

Quote:
Sorry to pour cold water on this, but my advice is just to forget it. While it may seem cool to think of developing your own company like Alienware, your posts indicate that you lack the knowledge to do this. This knowledge is also not what you are going to get through posting to a forum.

Also, building PCs is an extremely competitive market at present, so the chances of you even breaking even are close to nil - much less actually making money to pay for your wages. Consider the amount of money you could realistically expect to make on a PC at present to be price competitive - but you then need to consider that you will need to buy new CPUs, video cards, etc. whose price goes down before you have a chance to sell them. The loss on these items is likely to absorb any profit you make from the PCs yourself.

Don't forget that the reason companies such as Alienware were able to develop was because they identified the business opportunity of developing boutique computers before others had - so it wasn't so competitive at the time. It is likely now too late to be able to get into this market, unless you have major funds to be able to become competitive and to support your losses over a number of years while you slowly develop your brand until it finally develops the market presence that enables it to charge a premium and ultimately results in a profit.

As others say, first thing you need to do is get some basic knowledge about businesses - eg, reading books and attending courses. Unfortunately, I suspect that even this will be too hard a step for you to do - since your lack of knowledge indicates that you haven't already done this, in contrast to someone who really does have the potential to start up a successful business. However, if you do get some education about businesses, this is likely to dispel any ideas you have about the likely viability of what you propose. It will be more a case of losing a lot of time and money into something that doesn't succeed. Again sorry, but this is being realistic.


Bravo and Amen!
August 13, 2006 8:36:31 PM

This is something that I have been looking into as well. Most people walk into PC World(example) and say I need a pc for this this and this. The big retailers are very good at selling something that you dont need. I already have a few customers on my books. You will need to make yourself known. In the UK a company does not have to be VAT registered if theor yearly turnover is less that £54000, so at first you could get away with being cheaper than the retailers. So make yourself known, do a course of somesort and get going:) 
August 14, 2006 9:55:10 AM

I am a business Studies student in the UK. I have been learning for the last 2 years, and am about to continue for the next 2 years. An alarming fact you are told is that 75% of businesses fail in the first 2 years, so you have to be able to make sure you can last that long.

Also at furst a business should focus on providing a service and surviving (as main goals) instead of amking a profit, as thereis no point making a profit for the first year, but not having consumers returning, and then the company failing in the second year.

Starting a company like this would be rather difficult in a market dominated by large companies. But could be viable if there are not many places like this in your local area.

The best thing i can recommend is market research. Produce a questionnaire and give them to people to fill in (a lot of results are required for a good result base) and then see if it is viable. Look at any shops in your local area (if any) that have similar services and see what they charge, and if you can compete. If there is a niche (hole in the market) for this kind of thing in your area, then it may be viable. But it is not worth looking at being a large compnay with personalised cases and stuff until you have survived a few years, and are getting a lot of profit.

I myself am looking at starting my own Web Design compnay after university, as it is something that interests me, and i enjoy. But it may not be viable in my area. If you have taken business or economics classes at school, college or uni it will be easier as you will have an understanding of what is required to start a business. if not banks and business consultants can often provide information (but business consultants will almost definitely charge).
August 14, 2006 12:59:00 PM

Quote:
Michael has a good suggestion above. Along that line, you might consider offering a "computer shopping" or consulting service where you would help customers specify exactly what system or components they should buy. I think one of the biggest phobias that the general public has is buying the "wrong" computer or parts because they don't understand the difference. Just look at all the posts here asking for comments on parts selection.
This has the advantage of not stocking inventory, but will be more difficult to scale up.


This is exactly what I hope to do when I soon retire. I hope to advise people on what to buy, suggest companies to buy from and offer to build one for them if they prefer. Also offer repair service. One issue I’m grappling with is how to handle requests for small business services. I’m confident in my ability to set up a home network with a router, I’m definitely not ready to work with servers. My plan is to get my A+ certification because certifications are bona fides and can get you in the door and impress many people. Regardless of what you may think of certifications, they are useful and sometimes necessary and adds to one’s credibility. Next I want to work for someone else for year or so give or take. The only way to really learn a business is to work in it. Regardless of how good your formal education is, and I’m a strong believer in formal education, only after you’re in the “real” world do you really learn about the day-to-day problems you have to deal with. In addition, I’d rather learn with someone else’s customers, i.e., when I screw up, and when learning you always will, better it be with someone else’s customers. I do have the advantage that this will not be my life’s work, i.e., I’ll have a roof over my head and food on the table even if I don’t make a lot of money. My advise like that of a lot of other people is get experience, then start out small, preferably part-time, and when you are making enough money to live on, do it full time.