Wednesday, April 14, 2010

Should You Buy a Dell?

Would I buy a Dell (or an Hp, or other tier one system)? Should you?

Yes, we as a company, have purchased Dells and other tier one systems for resale to our customers: Dell, HP, Acer, etc. Some people want a brand name for the warm and fuzzy feeling. Some want the security of having a source to do warranty work if their supplier closes up shop. Some companies want all their machines to be exactly the same for easier support and they happen to be spread all over the US or the world.

We've all seen the flyers with a computer system on the front cover and the $299/$349 price highlighted in yellow. But rarely do we read the tiny print in the corner that has an asterisk next to it saying "the monitor is not included". Can we build an equivalent system and sell it for $299/$349 as they do? In reality, not unless I want to lose money, just like they do, if they sell it for that $299/$349. Out of 100 sales order calls the salespeople at Dell may get in any one period, how many machines do you think go out the door at that price? My guess is maybe it is one, and that salesperson is probably put on 'watch' to make sure he doesn't do it too often, or doesn't do it again at all.

Last year I went online and took an advertised basic Dell model and wanted to see if I could really buy one at that price. Yes, it was available, but there were no less
than three areas where they suggested an upgrade in the hardware and gave a good reason for it.

I took that basic model and wanted to change from the 80 gig drive that was offered to a 500 gig drive. The option to go to the 500 gig drive was at the time $139. Now as a reseller of hardware also, we were purchasing that 500 gig size drive for around $100 and charging resellers around $109. Now that was $139 more to change from the 80 gig to 500 gig drive. What about the cost of the 80 gig drive built into the system price? You really have to add what the 80 gig drive was worth to the $139 to get the true cost of the 500 gig drive from them. When you do that you find that you were paying about $189 for the 500 gig drive from Dell. Most computer
resellers I know would sell that drive to you for $139 or less if you purchased it from them as a standalone product, maybe even less if it's in a system, since they are moving more parts.

The real kicker was if I wanted to add a second 500 gig drive to that system. The price for the second 500 gig drive as an option was over $300. When we build a system at Sunnytech we just charge the same amount for both 500 gig drives. One isn't priced at one level and the second at a higher level. Options are where they make their bread and butter money.

I am sure you have not looked at a Dell 3000 system with the idea of adding a second hard drive to it. You can't do it as it comes shipped from the factory. The bracket that they mount the original drive in is designed to hold just one drive. You need another bracket that attaches to it, to add a second drive. Now, think about it. That means you go back to Dell, order the special bracket and possibly the high-priced drive to go with it. They make a killing on you. You also have the inconvenience of waiting. They have saved money by not including it with the case when they built it and saved on the initial shipping costs also, as the system is lighter to ship. I'm sure the average person would not notice this, but the bean counter in the accounting office insists on it. You're talking about millions of
units saving X-amount of cents per piece. That translates into millions of dollars in a year. Our cases are all designed to handle multiple drives, usually without any additional specialized items that you have to search for.

What if the drive fails in your Dell after the one-year warranty is over and you did not purchase the extended warranty? You then have a very heavy new paperweight. Big tier one makers purchase in large quantities of products at better pricing that we may get, often with no manufacturer's warranty on the item unless it's a bad batch and a certain percentage of failures occur in that batch. With Sunnytech, most drives we use have a three- or five-year warranty from the maker. We may give you only a one-year warranty on the part or system with the hopes we can sell you an extended warranty as everyone else does. But you, as an end user, have further
protection. You can go online and perform an end user warranty request, get an RMA number, package the drive, send it in, and get a refurbished or recertified drive back in its place. If you try that with a tier one system drive you most likely will get a "contact system maker for warranty" message. By the way, when we sell an extended warranty, it's only about 5% more than the price of the system, not hundreds more like the tier ones or big box stores.

Other areas the end user may not know about are main boards and CPU's. As an Intel Premier Partner, we get a three-year warranty on all Intel main boards and CPU's we use. We use retail boxed CPU's. If we used what they call tray processors, as the big guys do, we would have only a 90-day warranty from Intel and would have to provide a system CPU fan to boot. Fans are included with Intel retail boxed CPU's. Have you ever looked at a Dell or HP heatsink/fan unit? It never says 'Intel' on it or looks like an Intel unit. We can build a system with any main board maker's board you want and we will. But our preference is Intel.

A Dell or other tier one system may boast it has an Intel chipset. That does not mean it's an Intel board. Often because the cases used by tier ones are custom
manufactured for them, they also use main boards that are made to fit those cases. These are not made by or for Intel so they do not have Intel's three-year warranty. As an Intel Premier Partner, we can offer Advanced Warranty Replacement. If an Intel part is deemed bad, we can order a replacement part and have it shipped to the site the very next business day. This is one main reason we use Intel-built products, though not all Intel products have this feature.

Memory is another area. The tier one makers may not give the end user memory with a lifetime warranty. We use memory that has lifetime warranty replacement. The big guys can purchase memory in such a quantity, as with the hard drives, that no warranty is really given by the maker.

I want to say there is nothing wrong with purchasing a Dell or other tier one machine, as long as you really know what you are getting. The problem is that most
Americans don't know. They consider a computer a necessity now, and want it to be an appliance-like unit that just works. They really don't do any research into what they are actually buying. They look at the initial price and nothing more, and often that is not the whole story, as I have tried to explain here.

I often get some used system given to me which I will refurb and either give away to someone in need or resell. If I have a choice of working on a Dell or a clone I will usually do the Dell first, mainly because I can go online and find out the components that the system originally shipped with and obtain all the necessary drivers very easily to restore the operating system. They have a service code that is easy to look up. But when it comes to cost--actually spending money to do a refurb--it is usually much easier and cheaper to work on the clone. It's usually a little more difficult to find the correct drivers than with a tier one, as each clone can be built with many more parts choices. So sometimes it is an adventure.

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