Is there space for a new UK re/e-tailer?

[FatMikel]

Hi guys

I'm just doing a survey.

I live near Warrington, in Cheshire. When I want to buy computer parts, I have a myriad of options when it comes to ordering online. However, if it's 3pm on a Saturday and I need something urgently - I'm stuck. There's PC World or Currys and I'd rather burn my money than spend it there. The nearest 'showrooms' are Scan in Bolton (which is a nightmare to get to) and Microdirect and Aria on the other side of Manchester.

So I ask: is there space in the market for a new computer store in the North West? The locations that are being considered are 5 minutes away from major M62 and M6 junctions, 10 minutes away from Warrington's two train stations. So it would be quite accessible for anyone living in Lancashire, Cheshire, Merseyside or Greater Manchester. Now, so far as I know, all that exists in this area at the moment are small independent retailers selling no-name stuff for as cheap as they can and two outlets of the big overpriced chains.

It would initially offer only branded products. I'm talking Corsair, Antec, Asus, Gigabyte, MSI, Noctua, Thermaltake, and so on in all the required areas for building your next computer - with more product lines being offered as it grows.

Also on offer would be a custom build service. Know what you want and how you want it? Great. They'll just build it and install any software you want on it (you could even send in software you currently own for pre-installation). If you need any help in choosing what you want, they'll help with that too.

Now a few ideas are being banded around at the moment, but one that the proprietors would like to offer is a sort of... testing room. In this room, you could come and try out ANY of their products before you buy it. Want to know how Left for Dead 2 runs on XXX graphics card? No problem. Want to see that new 26" LCD in action? No problem. And so on. Custom built computers would also be showcased in this room for customers who opt for it for them to come and test and try out before they take delivery of it.

They would also offer online shopping as per the norm, albeit with a much condensed and much more quality focused product line.

One thing I wanted to ask specifically was whether or not you would want a new retailer to sell games? With the continuing domination of Steam and so forth - would you need that product offering from the new retailer? As a computer store, I guess they'd mainly be selling games to people also buying computer hardware so I'm not sure whether that's something that's wanted or not.

Now there's nothing definite yet. The technicalities are still waiting to be worked out. It's just an idea. However, feedback and suggestions would be much appreciated... even if it's just "No. Go away."

 

[alienware]

The problem is that these stores are always going to be miles more expensive than their online counterparts due to rent/bills and so on.

Price is what speaks the loudest. I would buy from stores but I can usually get the same thing online for much cheaper due to the lack of overheads.

 

[equk]

I don't think location is that important for buying a pc, the average user would buy a branded pc online and maybe pay for service agreement or if it breaks take it somewhere locally to get fixed.

When I left school I worked for a local company building/repairing custom pc's and there was money in it back then, but now it's not worth it because of the overheads involved, the cost of pc's and also because so many people buy stuff online

People who overclock and are enthusiasts will probably buy components online, I would say most people on this forum know enough to spec and build a pc without any bother.

The only custom build service that would be worth while is something like tom does

(which is quite expensive and involved but it's really for enthusiasts who want the best but don't have the time)

What experience do you have?

Have you worked out the overheads?

 

[AMDFTW]

ebuyer fella,you can order before 11pm and you get next day

 

[FatMikel]

The problem is that these stores are always going to be miles more expensive than their online counterparts due to rent/bills and so on.

Price is what speaks the loudest. I would buy from stores but I can usually get the same thing online for much cheaper due to the lack of overheads.

Well to begn with at least, it would be primarily 'just another' online retailer... albeit it with a better website and more focused product offering. Eventually they'd like to offer online prices instore by offering additional services (home delivery & setup, repairs, upgrades, etc) that would recoup the cost of rent/ultilities/staff etc.

I don't think location is that important for buying a pc, the average user would buy a branded pc online and maybe pay for service agreement or if it breaks take it somewhere locally to get fixed.

When I left school I worked for a local company building/repairing custom pc's and there was money in it back then, but now it's not worth it because of the overheads involved, the cost of pc's and also because so many people buy stuff online

People who overclock and are enthusiasts will probably buy components online, I would say most people on this forum know enough to spec and build a pc without any bother.

The only custom build service that would be worth while is something like tom does

(which is quite expensive and involved but it's really for enthusiasts who want the best but don't have the time)

What experience do you have?

Have you worked out the overheads?

That's one thing that would be offered, a repair service. I think we would be trying to tap into the local market. I know that most people that I currently work with talk about computers like it's still 2001.

I've worked in retail for the past 3 years and I've been building and recommending and fixing PCs for family and friends for the past decade or so.

Overheads are being worked out as I speak.

Like I said though, we'd ultimately be 'just another' online retailer, albeit with a local store offering some unique services for people in the North West who want ease of access (Scan is a PITA to get to).

ebuyer fella,you can order before 11pm and you get next day

I've used eBuyer plenty of times, and whilst delivery has always been a first class service... their website is so bland and ambiguous. I know that if I asked my mum to navigate it for a specific product - she would have no chance. That's one problem with the current crop of online retailers websites. They're too dense and not very use friendly unless you know specifically what you're after. Their support and enquiry systems are pretty awful too.

 

[FatMikel]

Hehe.

I know that by saying that "we'd ultimately be 'just another' online retailer". It sort of defeats the point of the whole exercise.

The reason for starting this business is to give me the opportunity to grow something special. I'm passionate about retail and currently I spend most of my day finding ways to make your (the customers) life easier when they want to buy something. I've also experienced some shocking customer service and I've challenged that.

We would be a more personal computer retailer. We wouldn't be a nameless number or intolerable clique like certain other retailers. Afterall, you guys are the reason we'd exist so it's always confusing when companies treat their customers with often complete apathy bordering on loathing.

That comes down to hiring the right people with the right attitude, having the best and latest products at the right price and offering the best aftercare we possibly can.

It's my way of making my working life more enjoyable by combining it with my hobbies of computers and gaming.

 

[equk]

That's one thing that would be offered, a repair service. I think we would be trying to tap into the local market. I know that most people that I currently work with talk about computers like it's still 2001.

I would say good luck

I am a computer technician and work supporting linux/unix/cisco/windows clients and servers (started as an apprentice in 1997).

The main work is done remotely as the majority of the time the problem is with the software or configuration.

It's very rare that there is a hardware fault which requires a site visit (which is why I think a 'local' repair centre is a waste)

I live in somerset and support clients all over the place as distance is no problem when the majority of support/repair is done over the phone and remotely.

The only ongoing onsite support is done on MOD sites which are local.

That's why I question people when they say "I'm gonna make a local computer repair shop"

If you are going to make a website to be an etailer you probably need some good contacts to even be able to compete with the current pricing of most companies out there.

 

[JN]

Don't take this the wrong way, but if you made it through the first 6 months alive I'd be massively surprised.

Even here on Overclock3D i can name about 3 retailers that have started up with the best intentions at heart, wanting to do the 'focused' thing and then realised that there is NO money in retail unless you're shifting thousands of boxes every month.

Being new to to the market you'll get the worst prices from manufacturers (other retailers will make sure of this), you'll be selling for hardly any profit (if any at all) just to attract new people, you'll faint at the cost of advertising in certain media and if you've got a premises to pay for you'll be wishing you didn't.

It's absolutely the worst time to try and break into the market at the moment, and even if it wasn't the above would still apply.

Sorry if that sounds negative :s

 

[alienware]

OK I will give you some advice from a lot of experience (4 years running a repair shop).

1. You will hardly make any money out of the actual components. Markups are slim and you will need to compete. Well, let me rephrase that, you won't be able to compete as places like OCUK and Scan who bulk buy will have your number. And unless you can buy in thousands and know you can sell it all you'll be paying more than any one else. I know a guy in Norfolk who set up his own business last year. He owed me a favour for designing and drawing his website so I told him to buy me a 280GTX as payment (I spent about a week doing it). In the end he got me a card online because it worked out cheaper than he could get it for trade.

The money in running a PC business is repairs. However be warned that now days it's cheaper to just get on Dell's website and replace the thing. We used to charge a £27.50 minimum service charge and that covered up to an hour. That was in 1997. However, consider that most repairs took at least three hours (as they were almost always software related and needed a complete reinstall). So that's £100 to fix some manky old PC worth less than that. You'll find it hard to compete when by that stage the person has had their £250 worth out of it (garbage PCworld things). Any enthusiast with a decent rig will stick needles in his scratend before paying some one else to.

Also, the comebacks on software repairs was a royal effing PITA. "I've lost my word files !" which would then have you doing CS on the phone for hours at a time. This is why PC world and so on DO NOT cover software problems and never will. Neither do any company (like Dell and so on).

2. For the first FIVE YEARS you will not make a red cent. Business make or break happens within the first five years. As thus it's a bloody hard struggle and you can not take ONE SINGLE PENNY out of the business as it all needs to be there to cover what might happen should things go quiet.

You will not be able to compete with the likes of Alienware/Dellienware so get the thought of building big powerful exciting PCs for people out of your head. What you will do is end up building el cheapo piles of cack in their hundreds which is soul destroying. I know because I used to knock up about 15 Celeron 300a/32mb/win98 machines a day. Once done on the network, ghost over the clone image and out the door they go. We used to make about £30 a go. Simply as we had to be competitive because people are not dumb and will do their homework first. That meant beating Dell and that meant cutting to the bone. That meant back busting work and tons of it just to make ends meet.

3. Distros do not like taking things back. This means that you literally need to sell five products to guarantee money earned. One RMA and you get bother with it from the distro? you'd have lost a full refund. In the end we ceased to sell anything but blank CDs and the likes. I won't sit here and bad mouth off distros I've encountered but in 1997-2000 they were all the bloody same. And you're not covered by the buying laws end consumers are. That may well have changed, but I urge you to do your research.

4. Prepare for lots of battles with Trading Standards. This usually comes from laptop owners who refuse to pay the minimum service charge after you tell them you cannot repair something they have spilled liquid in or dropped down the stairs. They will then cop the nark and go off and report you in a bid to get it back without paying anything.

5. Prepare for lots of angry stupid customers who just don't understand that getting a virus was their fault. I can not tell you the ammount of times people have bought a PC and bought it back in within a month demanding I fix it because it is loaded with virii, and then threaten a lawsuit when you give in and sort it but they lose all their data because they're stupid.

6. It's a very personal business and you will inevitably upset people. Personal computers are just that, and you will be held accountable for making mistakes. I once had a lady come in with a dead PC. She refused to let me wipe her hard drive and so in the end I crumbled and did a base root ripout transfer onto a new PC (something you had a chance with with Win98.. You went into safe, ripped out EVERYTHING from the Device manager and then prayed it would all redetect with new hardware on the other end). It worked fine for a while but then it started to go tits up, and who got the blame?

Trying to explain to people the importance of backing up is like trying to tell Ethiopians to stop breeding because their kids will starve. They just won't listen and will carry on f**king. And when it all comes crashing down it'll be your fault.

Those are not horror stories BTW. They are realities of running a PC business. You'll be there twevlve hours a day min and you need to open at least six days a week to remain competitive. It ain't fun, and for years it ruined my hobby. Many of your customers will just see it as a money for old rope sort of business and won't want to pay for your work. Unlike builders who can physically make things happen you can't.

If you want some horror stories feel free to ask. I have some that could make your toes curl. Also, you need to be BLOODY careful about what you say. One wrong act of mouth and you WILL have a lawsuit on your hands. Classic example -

Customer comes in who obviously wants everything for free. Starts asking you what you think may be wrong with his/her PC. DO NOT EVER UNDER ANY CIRCUMSTANCES EVEN HAZARD A GUESS. They will take what you say as gospel so for example if you said "Well it could be the hard drive, simple £60 part" and then you come to find their PC has burnt out? they will then expect it all fixed and working for the £60. And at that point you have a mis information lawsuit slapped on you from some pissed off asshole that wants the world on a plate.

I know that every IT geek dreams of running a business and making money from what he does with PCs, but the reality soon comes down. There are a million people who want to do what you want to do and maybe five of them will succeed.

When Video killed the Radiostar? Dell stomped on, destroyed and PWNED all small computer companies. They are so cheap and so fiercely aggressive you won't stand a chance.

 

[FatMikel]

It sounds to me that we're talking about different markets, equk. Your clients sound like companies rather than end users.

I wouldn't even try and repair corporate client machines and servers. Our market would be home users and gamers.

We're just throwing ideas around at the moment. The business would be primarily an online retailer. We would also allow customers from the local area to come to our office to purchase and try out products before they bought them in the test room (Dare we call it the 'test chamber'? ¬_¬) and also bring their old computers in for repairs & upgrades.

That's the basic concept.

Other ideas which would depend on profitability are:

Home call outs (again, more home users then perhaps gamers who are usually clued up on what to do to fix something or upgrade a piece of hardware).

Computer recycling/trade in.

 

[equk]

OC3D dragons den

 

[equk]

It sounds to me that we're talking about different markets, equk. Your clients sound like companies rather than end users.

We also do support for home users remotely as they also have internet connections and phones

 

[FatMikel]

We also do support for home users remotely as they also have internet connections and phones

I think we're getting our wires crossed. When I first mentioned repairs, I meant "My computer is dead, how can I fix it?" not "Help! Microsoft Word has disappeared!".

 

[FatMikel]

Wow. Thanks for the mahoosive reply AlienALX.

So the only real way to make it is to beat the big names on price+service?

It sounds to me like the repair side of things is best avoided...

We would need to have a better website, better service and the same or cheaper prices to compete with any of the big names.

One option is to use my contacts with my current employer who may be interested in entering this sector... since they have more buying power than every computer retailer in the country online or instore.

 

[JN]

We would need to have a better website, better service and the same or cheaper prices to compete with any of the big names.

Which would require massive investments. Investments I'd say would be much better off used elsewhere

 

[mayhem]

Being new to to the market you'll get the worst prices from manufacturers (other retailers will make sure of this), you'll be selling for hardly any profit (if any at all) just to attract new people, you'll faint at the cost of advertising in certain media and if you've got a premises to pay for you'll be wishing you didn't.

True, true and true on all accounts hahaha

how ever im doing quite well... pmsl. mind you im doing well and i dont have any advertise as of yet. No one willing to help in this area unless you have unlimited funds to be honest.

But were there is a will there is a way.

 

[alienware]

It sounds to me that we're talking about different markets, equk. Your clients sound like companies rather than end users.

I wouldn't even try and repair corporate client machines and servers. Our market would be home users and gamers.

I'm not being funny mate but if you don't score contracts with schools and businesses you don't stand a chance.

We're just throwing ideas around at the moment. The business would be primarily an online retailer. We would also allow customers from the local area to come to our office to purchase and try out products before they bought them in the test room (Dare we call it the 'test chamber'? ¬_¬) and also bring their old computers in for repairs & upgrades.

So you are prepared to spend a couple of hours playing to make £20 out of a video card? Look mate, I don't want to sound like an asshole but your laid back approach for having fun won't even cover the bills. Fact is the money you make from parts needs to be turn and burn. Messing around piddling over a £20 profit will get you nowhere. As I said above your crust will come from getting partners in (schools and so on) and repairing manky old Pcs. Sadly Dell now offer the same service and treat their business customers FAR better than they treat their home users. There is of course a reason for this, and it's because they know where their money is coming from. Alienware was just something Dell wanted 'just because'. Just because they wanted to dominate every sector and when Alienware beat them hands down time and time again they simply did what corporations do - bought the competition.

They have polished off HP, Compaq (who they now own) and numerous other companies. Gateway.. The list is never ending. You cannot compete, so you are going to have to part the red sea (literally) to make this work. This is why there aren't computer repair shops on every corner.

Yoyotech offer a lot of what you are thinking of offering. Sadly they are also more expensive than people like Scan or OCUK. And because of this 99% of the time people will just go to Scan or OCUK. It's money that talks. We're also in the middle of a recession and right now it would be daft to consider making a bacon sandwich, let alone trying to set up a computer business. Have you been watching the prices of memory? Last March I got 2x1gb OCZ platinum for £16.99 from OCUK. Now? Well over £50. Now is not the time. Give it a few years? yeah, then reconsider.

The only reason the company I worked for and managed existed was because of school contracts and the fact we owned what used to be Amstrad. So all CPC Amstrad repairs and upgrades (fitting a HD floppy from the SD one in there before ETC) all came to us. Without that? there would have been no business as without that we would have gone under.

That's the basic concept.

Other ideas which would depend on profitability are:

Home call outs (again, more home users then perhaps gamers who are usually clued up on what to do to fix something or upgrade a piece of hardware).

Computer recycling/trade in.

Do you realise what you will need to charge for a callout? We charged about £150 then £30 PH (in 1997). Not because it was a cash cow but because we had to. If you went yourself you would need to close. So fact is you can't do that which means paying a trained professional to go for you. One that can drive and has all of the overheads with owning a car. Also, you need to pay business insurance on the car, ETC ETC. Call any plumber or electrician? you'll pay at least that. It's not greed, it's a must. Would you pay £180 min to have some one come to your house?.

Magazines have educated people on just how simple it is to whack a PC case apart and replace a component. That will also make your life hard. The world is full of know all smart arses who don't want to pay for anything they can't do themselves. and let's face it, undoing a screw, unplugging a graphics card and plugging another one in is hardly rocket science. Google is your best friend for things like that. Why pay £180 for it?

Infact, that's how I learned what I know about computers, simply as I knew it was a lazy easy thing and didn't want to pay some one for old rope. And again, new PCs cost peanuts now. They are no longer £2000 boxes just to type some words on, and 30mb hard drives no longer cost a grand. Parts cost pennies now.

 

[alienware]

http://www.vadim.co.uk/Custom+PC+Build/Nightshade

Unfortunately as from 07/07/08 V-Solutions LTD has ceased trading.

Edit. Sorry I should explain that. That was Vadim solutions. A couple of 'well to do' people I know bought PCs from them. Lawyers doctors ETC. Alienware absolutely handed them their asses when it came to prices.

Infact, Alienware are now cheaper than ever. Recently a buddy of mine in the USA with lots of computer problems cross priced an Alienware and could not even beat it buying parts from Newegg, the USA's cheapest*

Look at the price of that Nightshade rig. They relied on a rich clientelle. Sadly that didn't exist.

* let's skip all the "I can build it cheaper" bollocks. The key to really understanding why Alienwares cost what they did was to understand what parts they came with. Sure, you can go off and build a cheaper PC, but cheaper it would be, in every aspect. Component for component they used top shelf, which means pricing for kind. They used either a top end Asus board (£200+) or an EVGA (£200+) and then the parts to match (quality). Some dude on the Alienware forum bought a case for $150 (a Predator) then built like for like. Ended up costing him $150 more and he got no manuals, no restore disc and no warranty on the entire machine. No support, ETC.

 

[JN]

Aqua-PC's and Immortal Gaming to name but a couple more

 

[FatMikel]

Look mate, I don't want to sound like an asshole but your laid back approach for having fun won't even cover the bills.

I think you've taken this the wrong way. I wouldn't be playing anything at all, for the next two decades at least. I know that.

I can't compete with Dell, Gateway, HP, et all. I wouldn't want to even try. Like I've said, this business would be small and personal. It would almost certainly be just me at the start and probably for a while to begin with. Heck, with that in mind it probably wouldn't even be online until I had an extra pair of hands or several.

As for the call out costs... depending on what the business ends up being - why would I need to charge £180 to pay for me and my time and transportation? If the business went that way and was done out of my home, why would I need to charge £180?

I understand why you're telling me all of this, but be realistic.

That was my original plan, to simply do repairs from home in my spare time in the local area for old people or those not in the know. I don't understand why that would cost £180 per callout...

EDIT: Regarding your edit: Like I said, I wouldn't really be selling PCs. I would sell built PCs for those who ask for it. That wouldn't be the main focus. We'd just be selling components largely.