Making a Living with Second Hand and Old Parts

In my past few articles I have been writing about purchasing new stock from suppliers and some of the dangers with it. In this article I will be talking about making a living with second hand and old parts and how to obtain them cheaply.

In the world of new computer parts, the person who sells them cheapest is either the person with the lowest overheads such as a teen still living at home or the big businesses who can buy them in bulk. For every other business it comes down to person who takes the smallest piece out of the pie because their suppliers are all usually the same people; its a tough game to be in.

Second hand and older parts however, can be quite lucrative at times if you have the right parts and the right buyers. For example, I have an old 12 inch Dell laptop and because of its small size, it carries its floppy and CDRom drive externally via a small cable. Should this cable become damaged, it would cost at least $100 to get it replaced because they are very hard to obtain because they break easily and no more of this type are being made.

Another example is if an old computer has a hard drive failure but upgrading isn’t a viable option, you wont be able to go down to the local supplier and put a 320gig hard drive in it because the old computer simply wont support it. The computer will need a hard drive which is similar size to the one it had in it.
A second hand 40gig hard drive from a store typically sells for around $40 USD and a new 320gig new hard drive retails for about $120 USD. Guess which one has the bigger markup on it? The 40gig hard drive; which can be obtained for around $5 – $10 is you know where to look.

Where to obtain Old or Second Hand parts:

Computer Auctions: Chances are that there are computer auctions in your city where liquidated business or ex-government computers are being sold for dirt cheap. To find them, use Google and search for “computer auctions your-city-name”. Typically you go to the auction location the day before to inspect the hardware where you can make notes about each item number and the next day go bid for them. At a computer auction you can expect to see:

• Many many ex-government clone PCs
• Old servers (Xeons and such)
• Boxes of mixed hardware (3 video cards, 5 network cards and a modem)
• Old, but never used hardware (often still shrink wrapped)
• Lots of software which may not even be that old (remember what I said about software spoilage? Much of it ends up here)
• Smelly old computer men who don’t get out much that are also there to bid.

It is quite possible to pick up five working 1ghz computers with 256ram and 40gig harddrives for $30 – 40 USD each. If you strip them down and sell their parts individually such as the hard drive for $40, you have already made back your money on one computer and you still have the RAM, CPU, Optical Drives and Motherboard to sell.

From my own experience with auctions there is one big tip I can give you. Go and inspect the hardware the day before to check if they all work, if they are what they are labeled and write down the maximum you are willing to pay for that hardware because it is easy to go above what they are worth if a bidding war occurs.

Speaking of the labels on computer hardware at auctions, a fellow blogger spotted some 1ghz Xeon servers labelled as normal Pentium 3 desktops at an auction. He brought all of them for $5000 and had made a total $25,000 after expenses by selling them on eBay. Here is his story which is an excellent read can be found here: http://www.shoemoney.com/2005/08/12/how-i-started-my-business/

eBay: eBay is generally more expensive because of bidding wars with other people like yourselves buying with the intention to resell. However, it is common to find some real gems that others totally missed, especially with specific parts for specific models of computers. A tip I recommend for buying computer parts on eBay is to snipe. Sniping is the process of waiting until the very last minute before the auction ends to place the highest bid, this way you prevent a bidding war against others which can save you a lot of money in the end.
eBay can also be used in conjunction with bricks-and-mortar computer auctions like in the blogger link I posted above by buying cheap at actions and selling for more on eBay.