Anyone worked in retail computers?

[Propaganda]

Me and a couple partners are looking at opening a medium sized retail hardware store selling components and ready built systems, repairs, mobile network guy, corporate stuff etc, I need to put a business plan together. Anyone know what kind of margins these places do? If the place doesn't net 20% its probably not worth doing and I have heard different things on profit margins on components. Anyone have any experience in this?

 

[dead mike]

you'd be better off selling weed. i see places like ncix that do price matching, also i think most local shops around here will do it too, i think the only way to make some nice money is repairs, the going rate for that i think is about $100 an hour.

 

[TurboTaco]

I agree with mike. Most local computer stores end up flopping after a few years, and not because of poor quality of work and service, but because of being undercut by other stores or larger straight-from-manufacturer businesses.

The profit margin is variable, depending on how much you really want to mark up the inventory you get.

If you know a great contact overseas that can provide the name-brand stuff for bulk discounts, then you can obviously afford to sell items at a competitive price...

Money from repairs, trouble-shooting, and in-store warranties are prob where you make most money but hardest to get.

I guess you would need a good location and the ability to build up a good reputation amongst ITs and comp enthusiasts. Majority of small start-up businesses fail to make profits within the first year and maybe more. Make sure you do some thorough research proppy

 

[Leroy]

hmm, I dunno, MemoryExpress is the "ncix of Alberta", and those guys are a bunch of twats. There are a shit load of mom and pops who wouldn't have a clue who NCIX was, or even speak enough azn to put through an order. Might be a market here, good luck Prop. I'll do your backend server architecture.

 

[radik]

I have worked as a service tech in retail, I like the work but it always pays shit. I can make more money doing pc repair on the side with an add in the paper.

The last store I did repair at charged $50 an hour or $60 for expedited service.

As far as the business went I dont know to much, Its OTV tech in Saskatoon and they do alright, they try to undercut future shop and co. as much as possible. Seems to work for them, but I think they make most of there money in repair and corporate services.

I think there is a market for custom builds, Low end work stations to high end gaming rigs. I build custom overclocked rigs for friends and family sometimes, Its not hard to do and you can charge a nice premium :)

 

[Low Budget]

I worked at Best Buy in the computers department for a year before i transferred to car audio/video. Margin on computers, laptops were slim to none. Margin on accessories were huge and margin on services (geek squad) were huge too. We always had to to try to attach accessories to the sales and offer services. Services is where it's at. However, can you compete with Geek Squad and these people who have somewhat low rates and offer in-home service as well?

 

[Propaganda]

The city where I live has over 100000 and 1 computer store here, other than best buy and future shop, and the place is shit half the store is for warhammer games and model airplanes, I was in there the other day their repair area was full and they charge $79 hour,other than that they don't have much stock. Memory express has 3 stores in calgary and 2 in edmonton, they are big stores, and they are making money hand over fist, ýou don't build 2 million dollar buildings on peanuts, leroy can attest to their success. And they sell shit cheap but likely move huge volumes. Woiuld be curious to know what they net at the end of the year.

 

[Propaganda]

At LB yeah margins on laptops are shit maybe 5 percent but I am talking on say a processor or gpu, or custom rigs, that's the things to focus on.

 

[dead mike]

should not be to hard to offer services like that.

i think you may have an advantage prop because of the lack of competition, still i don't get why all people don't order online, get a dell in your price range, or ncix which will assemble for the price of the parts + 50 bucks maybe even get free shipping.

sometimes i go into these local stores and ask for something and their prices are always marked up, even canada computers i could probably save at least 10-15% going online. 20% if you catch a sale.

maybe you don't want to reveal where your getting all your parts from but i guess i'd like to know buddy.

 

[Propaganda]

That's no big secret there are 4 big distributors in canada but you have to actually have a legit business and buy volumes to buy from them.

 

[LT_Clash]

id say if you start up a local computer store start up a website along with it to expand your market beyond local area if you get it up lemme know il try and support you on my next build or in the future

 

[radik]

[quote1254245965=Propaganda]
At LB yeah margins on laptops are shit maybe 5 percent but I am talking on say a processor or gpu, or custom rigs, that's the things to focus on.
[/quote1254245965]


I agree, if you can get a name out to the enthusiast crowd selling high end gear and custom builds there is some good money to be made.

 

[Low Budget]

Yea dude, if you open a store and have good shipping rates, whatever i gotta get I'll order from you.

 

[glock]

A buddy of mine has does a good buisness running one from home ( whole basement ) for years. Very little overhead and has a good client base as well. Has two techs working for him while hes out doing local support work.

My brother lives in Red Deer and says the same thing about the lack of computer stores there. He wont go to cowtown and ends up going to Edmonton. Hahaah Red Deer was once a one horse town now its a one comp store town.....EMO computers I think...lol...eeemmmoooo's.
Dont sink to much personal debt into it Prop...protect yourself.