Other What do I need to think about if selling computers?

Hey people,

I'm becoming self employed fairly soon (freelance journalist). However gaining that kind of work can never be guaranteed, and I'd like to be able to utilise other skills of mine to make some more money 'just in case'.

Over the years I've built and maintained computers for my family & friends, and although I'm no electrical engineer, I consider myself to be reasonably competent. I'm quite sure that some of you work for, or own a computer store of some kind, so you'll almost definitely know more about this area of expertise than I will.

I'm basically wondering if there's anything I may have overlooked.

1) I'll be building the computers at my house. I am assuming that I should observe health and safety procedures similar to guidance outlined for computer laboratories.
2) As my customers will almost definitely be based in my local area, I'll be hand-delivering the computers myself. I assume there won't be a problem with this other than making sure my vehicle is insured correctly for business use.
3) Some customers might ask that I install the computer into their home for them. I'm going to go ahead and assume that I might need some kind of insurance for this, but I'm honestly not sure on the subject matter.
4) If a part in a PC that I've built fails (under warranty) is it as simple as me being able to phone the manufacturer and get them to replace it?
5) Is there anything else I've overlooked?

6) This is the one I've been really interested to find out more about.
I'm not endeavouring to become a millionaire from building PC's (although, that would be nice). But I'm going to go ahead and assume that I could at least make a profit by purchasing from a wholesaler???
The main issues I have with wholesalers are:
a) How much cheaper will they actually be to purchase from?
b) How do do I find out who reputable wholesalers are?
c) How easy will it be to convince them to supply me with stock?
d) I simply don't know a lot about wholesalers... So any info would be great.

Thanks in advance for the great help you bit-tech people always manage to give!

Matthew


P.S. I've probably left out loads of the questions I want to ask, but this is all I could think of for now.

P.P.S. I have no idea if this is in the right section of the forums, but I didn't think any of the other sections seemed more fitting than this.

 

I'm no lawyer but this should be some help

1) If you're a sole trader then you don't need to follow full lab guidelines. You just need to have a safe working environment.
2) As long as you're covered for business use you should be fine.
3) You'd need public liability insurance for working on customers sites.
4) If you supply a computer to someone then you are responsible for the warranty. You have to provide the repair/replacement for all parts yourself then deal with RMA's to the suppliers yourself.
5) As long as you've got enough money in the bank to cover you and you've worked out your daily rates etc then you should have most things covered (providing you've already registered with the HMRC & VAT man)

6-
a) Disty's are only cheaper if you're buying in bulk.
b) I can provide you a list if you need.
c) I've got accounts with all the major ones. You'll need to pay upfront for the goods at first until you get a credit account.
d) Feel free to ask additional questions as you think of them.

 

If you don't own your own home you need to check that your tenancy allows you to run a business from the premises

 

Thanks for the info

3) How much is public liability insurance likely to cost?

4) I don't know what RMA's are, but I assume you basically mean:

• I build the computer and give it to the customer.
• If the computer goes wrong - the customer phones me.
• I supply replacement part to the customer without any hassle.
• I then seek compensation / replacement part from the manufacturer (utilising an RMA???)

5)Will be registering with HMRC etc. as part of becoming a freelancer anyway. Haven't thought about being VAT Registered yet. As regards to having enough money in the bank, I was going to be aiming to either receive payment before I buy the goods, or else use a business credit card to get me started. (This is all speculation, I have no idea whether this will work, I've been meaning to have a meeting with my bank manager).

6 a) If buying (for example) a single Intel Core i7 2600k. Would buying from a wholesaler genuinely not be cheaper than from say www.scan.co.uk? I don't want to be buying 100 of everything in order to only just scrape a profit...
b) A list of suppliers would be really handy. If you could pm a few names to me I'd greatly appreciate it.
d) Do I have to be a registered company in order to buy from wholesalers? Or will the fact that I'm a sole trader be enough?

My parents own the house that I'll be working from, so I hope it won't be a problem.
Thanks for mentioning this though! I didn't realise this was the case, and will have to remember it for when I move out into my own flat.

 

3) you'll need to get quotes for it as I can't remember how much mine is but it's less than £30 a month if IIRC. You'll need £2 million of cover as a minimum.

4) RAM's are essentially returning parts. You are correct with the way it works. You'll never get compensation from a supplier (just a replacement part). As a business you would be responsible for the costs of returning it to them to be tested & replaced so you need to factor that in to your prices.

5) If you're selling computer bits then you really need to be VAT registered otherwise you won't make a profit (or be able to sell to small businesses/charities).

6.
a) TBH you may as well order single bits through Scan etc. The actual discounts you get if you don't order in bulk are minimal. Even if you do order in 100 CPU's you won't save a massive amount.
b) I can send you some through.
d) They will deal with sole traders but if you apply for credit accounts they run the credit check on you personally not the company. This can be hassle if you want personal credit for anything as your credit report will show a lot of credit checks etc against you.

 

I wish you all the best with this. Tried my arm at it myself once when I was looking for some extra income.
I found that building new PC's (although much fun) was not at all profitable. The amount of time it took verses the amount you could ideally charge was difficult even when I was doing it (7/8 years ago). You will really need a good reason for people to buy a PC from you rather then them nipping to PC World, Dell etc. So, make sure you have some unique selling points!
I ended up doing more repairs then physical sales.

 

^This

Just not worth it IMO for the slim margins you make and the potential service headaches.

You can however compete on service and quality of the end product but I wouldn't rely on building machines alone -- tuition and servicing are far more lucrative in my experience and can tie into any machines you sell.

 

You should have a talk with Unicorn. He is an electronic engineer and system builder. I believe that most of his work revolves around doing custom office installations and providing system repair services. I don't believe a lot of his income come from the mom-and-pop computer sales.

 

Picarro is right on the money - I'll post a proper reply to this later though, when I'm back on my desktop. Am browsing via Tapatalk this afternoon and my thumbs can't stand typing long replies on this tiny keyboard

 

There is no money to be made from small scale computer building anymore.

Back in the day you could save money buy building your own or make money building.

Not now, complete systems with return to base warranty and genuine windows are cheaper than you could even think about making them for.

 

Well, in my local area most people are - for lack of a better phrase - well off? Okay, not everyone is, but there are certainly a good number of people who are!

My target market will - ideally - be them. I'd love it to be a national thing, but I'm going to limit myself to the local area for now. I was thinking of getting a really cool looking website, (but ultra simple) and just having my logo, contact details, and a slogan. Then people can call me up to get a quote for their next PC? Same with the business card, and would try and distribute them all over the place. Name - Website - Number - "When It Comes To Computers, We Only Deliver The Best."

I know it all sounds great on paper, and reality will probably just turn around and bite me in the ass. But.... I remember what alienware used to be. Before it got taken over by Dell. You could see the drive and ambition in each PC. These days it's... whatever they can push to the masses! If I can get my name out there in the same fashion, I could make a big thing of it!
I'm not thinking "big flashy gaming rigs" but something that runs fast and is stable. I won't skimp on components or cut corners. If people order from me, they'll get what they pay for. I want people to buy my PC's and think "Hey, I won't need to buy another one for a few years now, because this one is built so well in the first place!"

If the whole computer selling side of things doesn't work...
How can I go about being a simple computer repair man? Sort of thing...
Is it enough for me to get public liability insurance and then just go out fixing computers?

'Part II' of my great question:
1) Do I need any special qualifications to be a pc repairman?
2) Even if I don't need any, are there any that you can recommend?
3) I assume the same - public liability insurance - will be enough?
4) I've seen people charge from £20 an hour up to £90 an hour for callouts. What is a generally accepted price?
5) I'm willing to bet there's quite a lot I've overlooked - again - please do enlighten me.

I'm really desperate to earn a living (unemployed for a year, and being jobless is getting old now, really old) so any way that I can make money by utilising skills that I learned in college would be GREAT! xD

 

1) No
2) MCTS: Win 7 config is always good but an A+ would be a start
3) Should be
4) I charge £100 an hour for ad-hoc, £80 per hour for supported businesses (i.e. they already have a support contract but the work they want is outside the scope of it). Depending on where you live you should be looking at £30-£60 per hour. Price it based on getting what you need to live if you only got 5 hours a week of work (remember to factor in insurance etc)

 

Be mindful how you offer your warranty - if you over extend yourself, it'll only take one or two warranty calls to smash out your profit.

I think saspro has pretty much covered most of it - and most other people have rightly pointed out how hard this will be. If you can make £30 on a computer and stay competitive, I would say you would have done well. You're gonna need to be building 2 to 3 a day to make that a viable income. That's a lot of computers to sell to the locals....

I work in a roughly similar situation to saspro (although no way as big as him) and sort of similar to Unicorn, and building PCs is not any form of bread and butter income - to me it is an inconvenience when it has to happen and I will almost ALWAYS go out and purchase Dells for clients as it's just more cost effective; unless I want to work for £10 an hour, which I don't.

Look into supporting and servicing clients - you will have a good chance of succeeding there and if you just want to work with home based clients for now you can probably get away on experience alone rather than coughing up for certificates straight away.

Also - if you do go into service and support - don't undercharge for yourself because of your low overheads. I got less business when I thought I was uber-competitive because clients simply didn't take me seriously.

 

Rather than build new have you looked at referbing PC and Laptops and selling those and getting people to pay for upgrades. I would say the average user for normal web surfing wouldnt want to be spending top dollar on a high end system.

Just a thought !

 

If you're making a batch of the same PC's, make sure you're familiar with sysprep and imaging. It'll save you hours and hours. Install one, get it spot on, then sysprep and image it to a usb hdd. Another massive benefit is the fact if it goes belly up and you get it back to repair, you can back up or replace the HDD, then image back to it and copy back the customer's files.

 

As people have said here the real money is in support not the PC selling however selling the PC as a lead in and then offering a telephone and callout support service could be a good move.

The one thing no-one has mentioned that's important if you're building from parts is your WEEE. You are meant to apply for some ridiculous licenses and account for the disposal of all goods and offer to dispose your clients old goods responsibly . Its a huge faf and means we no longer consider building systems for clients. Not that we ever did it much anyway, the time it took means we buy pre-built except for some small fileservers.

 

Awesome, thanks for the advice

Well, the big aim is for me to be getting at least £250 a week in spending money (after taxes). If I do as saspro says, and price this up upon only working 5 hours... I know £250 is probably more than I need, but that'll mean charging £78 an hour... I'd honestly be hoping to charge less than that. I was thinking more in the region of £53. Then if I can get 8 hours work, that's £250 after taxes and expenses, if I can somehow get more than 8 hours, that'd simply be great!

When I'm really "in the swing of things" how many hours can I expect to realistically get per week?
I know 40 isn't on the table, given callouts / travelling times etc. But would 20 be realistic at all?

I assume there must be books / study material in order to gain CompTIA A+ certification etc. (That's the one I'm really looking to get I think) If so, what can you recommend to me? (Preferably something that'll be available at my local library or is cheap to buy online?)

Thanks for the major help so far

Matthew

P.S. If someone DOES ask me for a brand new PC... Do you think people would like it if I told them I'll supply the PC to them at cost, and then they can just pay me for the time I spend expertly putting it together in their home?... That sounds like an awesome compromise to me?? They'll know it's been put together properly, because they can watch me if necessary - yet they also are only paying cost price for parts! I'm personally liking this plan xD

 

Ah, you have raised a good point here! I forgot about WEEE, despite concentrating a whole project at college upon it.

If providing upgrades, I was thinking of keeping the old parts - not throwing them away, then selling them off on eBay - with all proceeds going to charity. That saves me throwing them away or even having to pay to have them thrown away, and the charity thing gives my clients incentive to upgrade more items too! xD

Not sure on the disposal part. Can I not just take the parts to my local tip and dispose of them in the business part? (albeit, putting them in the electronics bin).

 

I've been told you can't just do that and that you need to join a producers compliance scheme. You need to put a sticker on anything not marked with one to indicate its not for landfill and give your clients a leaflet on how to dispose of stuff correctly or put this in your contract. You're meant to get a certificate of disposal so I don't think that the local tip would cut the mustard.

I am however not a WEEE expert so the above may not be 100% correct but that is my recollection of the rules as explained to me.

 

Never ever do this.

Always build & test away from the customer premises