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Ask YC: Becoming a Hardware Retailer

2 points by iamdave 19y ago

I've recently rekindled an idea to open up a computer repair and sales shop near the local college and I'd like to be able to retail networking gear. Routers, hubs and other low to mid range accessories college students would need, but can't get at the book store. How would I go about obtaining stock quantities of such hardware from vendors to resell in stores? I've managed to find the Linksys partner page and their application, but other than that is there any other process I should expect?

bridgetroll 19y ago
I don't mean to troll, but why, as a student, would I want to pay more to get hardware from you instead of ordering from newegg or amazon for that matter or going down to best buy? How are you going to keep the margins to stay in business? Are you planning on hiring employees or run a sole proprietorship? How much a square for lease? What do you do about the leach customers that want everything for free that suck up your time? There are a ton of questions to answer if you are going to brick and mortar. I had a friend do it. I've experienced it first hand. I will never do it. But good luck to you if that is your dream.
- iamdave 19y ago
  "would I want to pay more to get hardware from you instead of ordering from newegg or amazon" Well one thing I'm noticing for sure (in my area at least), a lot of people here who unless they actually work in the tech industry, don't know the first thing about sites like NewEgg or TigerDirect. It kind of saddens me too, because when I had an idea that involved using the Internet in a more ad-hoc fashion, there was almost zero interest. When I tried the same experiment involving Facebook everyone jumped on. So keeping folks locally shouldn't be TOO hard. "...or going down to best buy" Good question. On that regard, I want to make a fight for cheaper prices. That's cliche and will consider it. "How are you going to keep the margins to stay in business? Are you planning on hiring employees or run a sole proprietorship?" I don't plan on having more than 2 other folks around the shop. You've asked some very good questions and completely blew my mind. I'll take some time to figure these out first. Thanks!
deleted 19y ago
[deleted]
goofygrin 19y ago
You likely don't go right to the manufacturer. You'll likely have to go through a reseller (think Ingram Micro). With margins at like 1-2%, there is little money in hardware retail sales. The money will be in the service side of it. And college kids are the worst. Cheap, bouncing checks, and most of them know someone that can do it for them. You want to know where the money is for a computer repair biz that does in home service? Suburbia. Place I live (suburb of Dallas) there are constantly people talking about their computer problems (there is a big forum for the area) and most of them end up at either the big box retailer or one of the two small places here.
SwellJoe 19y ago
Don't do it. You can't operate on a large enough scale to be competitive. I assure you, it is not a good business to be entering today. You will spend more than you can imagine, make less than you ever thought possible in your most pessimistic estimates, and work longer hours than is sustainable (while losing money every day for the privilege of working those hours).
run4yourlives 19y ago
A while back I was closely connected to the purchaser of hardware at our company. We used to buy hardware from one of these mom & pop shops (don't ask) because they would get deals that were basically next to nothing compared to the dell's and NCIX's of the world. I used to feel bad for the retailer though.. he was making stupid margins like a dollar on an $80 HDD, and $30 on a complete PC. I'm not sure how he managed to stay in business, but man, there must have been a few stressful nights coming home to his family every month. Run away from this, run far far away. Unless you can brand your own hardware, you're better off selling yourself as a tech support guy than trying to be a retailer.

2 points by iamdave 19y ago

bridgetroll 19y ago

I don't mean to troll, but why, as a student, would I want to pay more to get hardware from you instead of ordering from newegg or amazon for that matter or going down to best buy? How are you going to keep the margins to stay in business? Are you planning on hiring employees or run a sole proprietorship? How much a square for lease? What do you do about the leach customers that want everything for free that suck up your time? There are a ton of questions to answer if you are going to brick and mortar. I had a friend do it. I've experienced it first hand. I will never do it. But good luck to you if that is your dream.

iamdave 19y ago
"would I want to pay more to get hardware from you instead of ordering from newegg or amazon" Well one thing I'm noticing for sure (in my area at least), a lot of people here who unless they actually work in the tech industry, don't know the first thing about sites like NewEgg or TigerDirect. It kind of saddens me too, because when I had an idea that involved using the Internet in a more ad-hoc fashion, there was almost zero interest. When I tried the same experiment involving Facebook everyone jumped on. So keeping folks locally shouldn't be TOO hard. "...or going down to best buy" Good question. On that regard, I want to make a fight for cheaper prices. That's cliche and will consider it. "How are you going to keep the margins to stay in business? Are you planning on hiring employees or run a sole proprietorship?" I don't plan on having more than 2 other folks around the shop. You've asked some very good questions and completely blew my mind. I'll take some time to figure these out first. Thanks!

deleted 19y ago

[deleted]

goofygrin 19y ago

You likely don't go right to the manufacturer. You'll likely have to go through a reseller (think Ingram Micro). With margins at like 1-2%, there is little money in hardware retail sales. The money will be in the service side of it. And college kids are the worst. Cheap, bouncing checks, and most of them know someone that can do it for them. You want to know where the money is for a computer repair biz that does in home service? Suburbia. Place I live (suburb of Dallas) there are constantly people talking about their computer problems (there is a big forum for the area) and most of them end up at either the big box retailer or one of the two small places here.

SwellJoe 19y ago

Don't do it. You can't operate on a large enough scale to be competitive. I assure you, it is not a good business to be entering today. You will spend more than you can imagine, make less than you ever thought possible in your most pessimistic estimates, and work longer hours than is sustainable (while losing money every day for the privilege of working those hours).

run4yourlives 19y ago

A while back I was closely connected to the purchaser of hardware at our company. We used to buy hardware from one of these mom & pop shops (don't ask) because they would get deals that were basically next to nothing compared to the dell's and NCIX's of the world. I used to feel bad for the retailer though.. he was making stupid margins like a dollar on an $80 HDD, and $30 on a complete PC. I'm not sure how he managed to stay in business, but man, there must have been a few stressful nights coming home to his family every month. Run away from this, run far far away. Unless you can brand your own hardware, you're better off selling yourself as a tech support guy than trying to be a retailer.