- You are here:
- Home »
- Blog »
- Manage Your Computer Business »
- Surviving in a World of Cheap Hardware
Surviving in a World of Cheap Hardware
A few weeks ago, I created a survey for our software competition and one of the problems that frequently came up was many technicians don’t know how to compete against the low price of new computers now days. If you visit any big box store you can now get a Netbook for as low as $250.
If a client asked you to repair the LCD on their laptop, it is quite possible that your price will come pretty close to what they could have bought a new computer for. So how do you compete?
Quite simply, I don’t.
I am not even going to try to compete in the hardware market because I dont want to work for that little. If a client came into my workshop with a hardware problem and it was more cost effective to get a new one, it is my responsibility to tell them. I always try to look after my customers best interest even if I often lose the hardware sale. However, that doesn’t mean I wont make any money.
Instead, I either offer to buy a new computer on their behalf and set it up or tell them which one to buy and I will set it up once they have it.
We need to remember that when they get their new computer, they will still need to have their printer drivers loaded, wireless networks setup, antiviruses installed and emails/pictures/documents transferred.
I get hit particularly hard with this cheap hardware trend because there are 2 stores in my area that have some of the cheapest prices in Australia (they even beat online prices). They are so cheap that the price they offer to anybody off the street is cheaper than what I can buy hardware for from a proper supplier, without tax or any markup. To make matters worse, they are pretty well known to the general public and many of my customers already know about them.
Just recently I resold a computer that I bought from one these stores, my client knew thats where I got it and how much I paid for it and I still made a reasonable profit out of it. The reason why the client bought it through me is because I knew what type of hardware he needed for CAD work as you cant just slap in a gaming video card for CAD work. Its far better to use a card designed specifically for CAD work because the pixels are drawn differently. I knew what brands are more reliable thanks to many years of repair work. I told him all this and that I would put the computer together, install all the software, install all the patches, bring it to his place of business and plug it all in. It was a pretty easy sale even though he knew there was going to be a markup. To him, this service was worth far more than what he could have saved if he did it all himself.
To make sure I always get the work when my clients are looking to buy a cheap computer from a bigbox store, I offer myself as a second opinion to let them know whether what they are looking at is a good deal or not. If it is a good deal and I cannot beat it, I tell them to buy it and then offer to set it up for them for a fee, reminding them that their emails and such will need to be transferred if they want them on the new computer. If what they are looking at is not a good deal and I can beat it (which often the case with desktop PCs), then I show them my offering and I get the hardware sale that way.
The business is always changing so you shouldn’t get upset that you are no longer catching fish where you used to, just move your nets to where they are swimming now.
Session expired
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.
Nice article.
I often get customers querying a large repair bill, saying to me that they could buy a new PC for the price.
As mentioned above, there is the work involved in transferring their data, installing software & hardware etc.
But, there is also the additional cost of PC-locked applications such as Microsoft Office – for which they will probably have to buy a new licence for.
And also there is the customers time and upheaval involved in getting there work/play setups back to how they are used to them.
Kev
C8-)
—
Cambridge PC Support
Good article and comments.
An approach that I have taken has worked favorably for me in several instances, particularly with laptops. I’ll get a laptop in for repair and after diagnosing determine that a new motherboard is required. Often the client does not want to spend the $200+ or so to effect the repair. They decide to buy a new one for $400. I offer to keep the old laptop in lieu of my diagnostic charges.
Most times the customer agrees and I order the new motherboard and do the repairs and then sell the refurbished laptop for a decent profit over the MB cost and my labor to repair it. In my area, there is a pretty good market for refurbished laptops.
The lower you go, the quicker the obsolescence. So for low end folks if the HW is over 12 mo old, I recommend they replace for non off-the-shelf HW issues, i.e. a MB, processor, etc. Off-the-shelf items like a power supply or HDD most folks will pay as they can have there computer back in less than 24 hours and they perceive time as value. As you go up the ladder then repair is more of an option… nrk
I guess this problems with get worse as time goes on. I don’t think anyone would want to spend hundreds on repairs when they could easily pick up a new computer system for almost the same price.
In fact, most people these days prefer to buy the replacement parts instead of going for a repair.
Very frenquently, I receive calls with requests to provide a cost over the phone without the benefit of having examined the perspectives clients computer and sometimes after making it clear that I was one of many calls that they have already made (a differnet problem in and of itself). The angle that the customer has as a consumer, is to determine if it will be less ocstly to purchase a new computer or to have the existing computer repaired.
Most of my work is relkated to malware and the way that I have been able to effectively recover from this customer approach is to point out the following: a) it is very unlikey to purchase a computer of decent quality for for any less that 2 to 4 times MORE than it would cost to repair their existing machine b) should one elect to replace as a method of solving a malware infection, they surfing habits and poor security posture will put them into the identical situation within a few weeks/months-its just a matter of time.
Faced with this realization, the few that insist on a new computer I just allow to fall on their own sword.
“If a client came into my workshop with a hardware problem and it was more cost effective to get a new one, it is my responsibility to tell them.
I always try to look after my customers best interest even if I often lose the hardware sale.”
Kudos to you Bryce!
I’ve read forum posts (around the web), on similar topics. There are lots of techs that say it’s not their responsibility to divulge this type of information to customers.
Like you, I feel we have a type of fiduciary responsibility to our customers.
Thank You for the example you’re setting in the PC tech world.
Another excellent article. Putting the customer’s interest first had always put me in conflict with management when I used to work at CompUSA. A clients trust is many more times valuable than the dollars gained by sleight of hand.
Like your article and can definitely relate. Here in Edmonton, Canada, there are many stores offering cheap PCs on sale. When clients ask about this I offer them the advice that these big stores are just trying to get us into their stores so to mark down a PC is as good as any advertising. Then I show them what I can offer, which is fairly close to regular off-the-shelf prices at a store. I am sure to inform them that my price includes a hardware replacement warranty that is worth every bit of the price since it can be replaced and often with the newest hardware.
By the way, if none of your local suppliers offer an in-house hardware replacement warranty, maybe you could select the best supplier and have a chat with the owner/manager. Suggest how such a warranty can benefit them, their clients and of course you and your business. I searched for a warranty that I could offer and found nothing that made real sense to me. Then my favorite local supplier began to offer their own in-house warranty that follows the serial numbers of the hardware. After checking the costs and what it would mean for my company and my clients it was an easy decision for me. Feels great too to be able to mention I offer 4 years hardware replacement warranty. Check out http://www.memoryexpress.com for more details of what my supplier offers in their warranty.
@Doug
Memex isn’t a wholesaler though. But they are great, they’re impossible to compete with, their margins are razor thin. Nice thing is the IPR like you mentioned.
For most people if their laptop is older than a number of years (sometimes, 2 years or more) they always opt for a replacement rather than repairing.
I for one, had a noisy harddrive but decided I didn’t want to get a new harddrive. These things are very cheap these days so repairing your computer could end up costing more than anew one.
Nice article BTW :)
Nice article Bryce. As you intimated, it is not always the physical product we are selling to our clients, but our knowledge to do the job in a way that may save them an expense further down the line. It is very unlikely you will get that sort of service from a bigbox store.
Footnote: I’ve often wondered if standing outside said stores on their “never ending sale” days with a targeted flyer for new PC setups would be a viable marketing strategy! Any takers?
Cheers
As far as I am concern, our businesses offer services that help our customer repair, more often than not, their computers that hardware cost is not an issues as well as save them lots of time and frustrations to bring their old PC back to life with all the familar keyboard and mouse and the noisy box that they could not live without now days. We can not change human nature as they fear of change, The opposite is us.
Keep up with the good work BTW, love them all.
There is no substitute for experience and craftsmanship. It reminds me of a couple of years ago when I was a partner in a car audio and security fitment centre and customers would still bring equipment they had acquired somewhere else for my attentions in the installation bay….
My company’s mission is to help the client understand their choices in a non-technical manner and help guide them to the best decision for the computer and their budget. Many times client have said it’s not worth fixing, go out and buy a new computer and I end up going to their homes and spending 2 hours setting up the new one with a new router, printer and home networks. Win win for the tech.
People do love getting a new computer, it’s like Christmas day for many people. Giving up a 6 year old Dell isn’t a problem for many.
Lisa
Owner, Call That Girl
Minneapolis computer repair
Brilliant, Bryce, and funny too. That’s what I call using the old noggin.
I explain the difference, that I am service, and they are retail. I explain that if they purchase another computer from me, I will be there down the road to support them and answer questions. I always said “good luck with (fill in your big box store near you) answering any tech questions after your purchase”. They know they can call me and their call goes directly to my phone, and they get me directly. I sell SERVICE!
I always let my customers know that you get what you pay for. A $250 computer is going to give you many problems down the road. Most importantly I like to stress the impact on the environment.
The reason that our environment is so screwed up is that people and corporations are too worried about what is cost effective today, rather than looking at long term benefits.
If you can fix a customers computer and keep it from getting trashed you are saving all of the energy and by-products that would have been created in the making of a new PC.
Not to mention in my experience a 2Ghz PC w/512 MB RAM running windows XP will run faster than a New Windows 7 machine when optimized.
Love the website/article! Someone recommend it…best tool I’ve found thus far. How much would you charge for consulting/help buy a pc? Maybe there is a previous post with detailed/price ideas?
I agree, it is more about the service, products are a commodity industry, and I agree with Bryce…. “I don’t”…
Turns into much wasted unbillable time, and most of the time – one-shot break/fix client. I am looking for long term relationships not ‘dates.’