Dell out to Destroy Small Businesses

[john37074]

I have been selling computers for about 3 years now. Many of the newer ones I have sold were refurbished from Dell. It was the only way to compete with stores like Wal-Mart and Best Buy. Offering a name brand computer at a low price, I could compete with stores like Wal-Mart and Best Buy.
All of a sudden I quit getting tax free status, and then I was told I had to become a Partner and join this partner channel to resell for Dell and keep my tax free status.
Come to find out, by joining this Channel, I agree not to sell on the home user level and only to small business.
Dell will no longer allow me to sell on the retail level. Now! Only big companies like Wal-Mart or Best Buy can sell to home users.
I make a living servicing the home user and I have now been cut off from being able to resell to home users.
Dell is forcing small businesses out of business while catering to big the companies.
You would think, given the shape the economy is in, Dell would welcome the extra sales.

[glc]

There's no money in selling computers to home users, and hasn't been for a while now. The money is in service. Time to refocus your business.

[bailey]

right, I belve that there would be a lot more money in rebuilding and upgrading systems for people than selling them a computer that you had to buy, and then they would more than likely end up with a much better system that way.

just my thoughts for what its worth ( 2 cents )

[HAL9000]

Originally Posted by bailey just my thoughts for what its worth ( 2 cents )

And that is pretty much the profit margin on home users these days.

[Petef56]

Originally Posted by john37074 All of a sudden I quit getting tax free status, and then I was told I had to become a Partner and join this partner channel to resell for Dell and keep my tax free status.

Is the problem just the tax free status, or are you saying
they won't even allow you to resell for Dell unless you join
the partner channel?

Reason I'm asking is, NO tax free status should not really
matter because you pay the tax upfront and then deduct
it at the end of the year as an expense when you do your
income taxes.

I suspect that Dell was forced to adopt this new policy by
the contract they entered into with the big retailers who
would only agree to sell Dell products if these were the terms.
If that's the case, there ought to be a law against
such practices.

I service computers but don't sell them. I'll assist a customer
with purchasing a Dell computer and then set it up for them
which I believe is more profitable and less hassles than selling
them one directly. If anything goes wrong with that PC, it's
mostly all on Dell to solve the problem.

---pete---

[mbossman2]

I consult with many businesses in my job.

pure hardware sales, in a commoditized market, whether it's to retail consumers, small, medium or large businesses, is a dying business model.

Unless the business does something unique (or what I call "claim to fame") or provides value (real or perceived), customers will have little or no loyalty and, I can guarantee you, they would toss you on the scrap heap for $5/unit.

I might recommend to you that you develop a unique or specialized offering that has value to your customers. this value must be sufficiently compelling that customers are willing to pay a premium to obtain and retain your services.

Don't know how or what that service is? Start with a clean sheet of paper and write down (or work up) your value statement as a company. from there write down your skill set (and be completely 100% honest). Once you have both, look at what skills that you have that do not exist within your customer base. It is from those skills that your unique offering will spring. Please remember that this is not a one time event, you need to perform this activity every 12-18 months to keep your business current and relevant.

Fortunately, for you, I don't charge by the hour (I work for a major technology concern) and this is part of the service that I offer as a channel manager: consulting, company road mapping and marketing and assisting the business partner in growing their business

[jdeb]

I have been considering opening up my new store for some time now but I have come to realize that there is very little to no money on building custom pc's for home users. Although I have built a lot of them for home users, I have noticed a big slow down and more people are getting them fixed do to the economy. I think the repair side is much more profitable but like someone mentioned above, you need to specialize in a certain segment. I am still considering it but the banks are helping me make that decision by not loaning any money these days. I guess if I had to focus on one segment, it would be the networking side for small business but there is only about 20 people in my market doing that already. It is turning more into a hobby for me these days, where I can make a few extra bucks but that's about it. I have a good name and get calls weekly for different things but nothing that warrants opening a store front for... or at least appears that way in these troubling times. To give you a good example, last week I built a p45 system (tower only) for 850.00 and in the end I made like 75.00 because the customer couldn't come up with the agreed price 950.00 in the end, she says she is going to pay me the difference (doubt it). When you look at my labor involved (2.5 hours). I didn't make any money at all. I was pissed but what are you gonna do? I could have kept it but I don't need another computer.

[David M]

Cheap home computers are like any other home appliance now. Just a commodity. There is no money in selling blenders, toasters or hair dryers either. Cheap home computers are almost disposable items now. When they break they are probably obsolete or close to being obsolete. So it is probably better just go out and spend $699 for a new one at Wally World or Costco and put the old one in the recycling bin.

One of the keys of a successful business is to compete where there is not heavy competition.

[bailey]

Originally Posted by David M Cheap home computers are like any other home appliance now. Just a commodity. There is no money in selling blenders, toasters or hair dryers either. Cheap home computers are almost disposable items now. When they break they are probably obsolete or close to being obsolete. So it is probably better just go out and spend $699 for a new one at Wally World or Costco and put the old one in the recycling bin. One of the keys of a successful business is to compete where there is not heavy competition.

very true:
but, it has been my experience that once one buys one of thoes cheep computers and it dies on them, it is very easy then to sell them on a good custom computer build that can be repaired and upgraded later on.
this then brings a good steady customer from then on.
at least it works for me.

[doubledragon5]

Originally Posted by bailey very true: but, it has been my experience that once one buys one of thoes cheep computers and it dies on them, it is very easy then to sell them on a good custom computer build that can be repaired and upgraded later on. this then brings a good steady customer from then on. at least it works for me.

Very true, I just sold a 5yr old mb from asus that came from a hp desktop for $30. They guy said he was making a web based computer for his wife..