Right lets see if I can explain this in a manner that I understand, and hopefully you lot as well.
To put it straight I have a business concept in mind where I would need to be able to sell custom and specialized pc's on a commercial scale.
This would be to individuals and companies.
What's bothering me is I don't know the legality of this (UK) as I would be using components from many companies, assembling them into a product which I would assign a name and sell under my business operation, in effect it would be 'my' product however nothing within it is produced or owned by me other than through a straight purchase of indidual parts through retail or trade means.
So what I want to know is:
Can I do this legally.
And what declarations or licences would I need if this was required.
Your not selling parts as your "own" your selling a compiled set of hardware. There's no issues as far as i'm aware except not being able to compete with Dell and HP.
There may be issues around warranties? Or possibly selling consumer parts to businesses (maybe depending on company) Possibly depending on who your selling to, but at scale you tend to work with manufactures directly and would have your own warranty "stuff" with them.
I know that on the software side selling other companies software as parts of a request or support or bigger package tend to be a case of talking to the companies directly to get the rights or license to do this.
But hardware parts unless theres funny language tends to be like food parts. You dont license tomatoes, you just use them in your soup.
(p.s. im not a lawyer, you probably need one anyway setting up a company and all that..)
I would check this out in the UK. If your selling the product to customers you may be the RMA point of contact for these customer and have to handle returns etc. This can be a huge time sink / headache is not worked out with your suppliers first.
Friendly advice would be to not get into it (sorry for stomping dreams.) It is an already crowded market, and the fact that you can buy a PC with the specs you want for around the same price as buying the parts really makes getting into the business bad timing. PC building has really become an enthusiast thing more than a financial thing as of recent.
As for the legality, I can't help much as I don't know UK laws nearly as well as US laws.
I also agree that it's not a very viable market to get into. There are many companies that do this stuff, Ibuypower, cyberpowerpc, and origin just to name a very few.
A slight variation on your plan might be of interest, if you become an IT consultant then you can sell PCs to business's and what not but you would have to do a lot more than just sell pcs and you would have to deal with warranties and such
I did this for a bit 16-20 years ago. There was hardly any money in it back then, and there will be less now.
Dealing with idiot customers is also something you would need to be prepared to do. By the time you have dealt with something quite simple you will be asking yourself why you bother for the £50 you might have made on the Sale.
To make moneyin this game you need to sell a support contract to a handful of small businesses, dealing with system and server builds becomes a secondary part of what you do.
The ultimate goal is to provide a complete service rather than just sell pc's, with consultations then designing and building specific setups required by the customer which they might not otherwise have access to in a complete package, following that a complete installation is carried out by us and continued support thereafter, The final idea is to provide something where a customer could call us and get everything or as much of it from the same place so to speak.
So I'd have to have a range of suppliers and component types to provide this kind of service, I'm guessing it would help me to go through manufacturers directly rather than say a trade/retail outlet such as scan or aria (newegg for the American types)
Most, if not all of theses types of companies probably already have some IT guru working for them, sourcing a custom PC is so easy that if there is a need by that comp[any they have already found the source or person to source from, not to discourage you but the time to be doing this type of business was 15-20 years ago, today it's just not that difficult to source custom hardware/PCs and as we know there are a vast number of experts already on the scene extracting what little profit there might be to be had.
I am no expert but I really cant see any money in this, and the major players in such a thing must already dominate this? I cant imagine you would even tap into 2% of the market.
He's right on. Unless you have some connections to cheap China products. Or say it was like in 2002-2005 where you can get computer components for half price. Or sell them to affluent customers who don't care you're ripping them off by selling a $600 PC for $2000. Back then there was grey market in HK & China and ubid/pricewatch. Nowadays there's only microcenter. You're probably better off buying off truckloads of bulk Dell/HP workstations set for scrap and fixing them and selling them for 150-200 or 200/500 dollars like the peeps on ebay.
Juts look at ther current PC sellers now Falcon Northwest and Cyberpower, they have good specs are go for that niche budget market and skimp out on the case or power supply. Sorta like those cheap Asus ROG G20, sure it looks cool, but yea it's just down to the bare mininums on stuff.
That all sounds nice but yopu have to be realistic; doing this you would spend 2-4 hours per consultation, another 2-4 locating who has the required parts and that's before you have factored in the build time + OS install time. So for consultantaion and labour costs you are probably looking at wanting to charge a minimum of £400 per system.
So you've now turned £600 worth of computer parts into a £1000+ system. The market will not bear this out. If you are selling professional workstations that have £2000 worth of parts in them, it might. But your customer base will likely be tiny so this could never be your main source of income, just something on the side.
My best customer was a business who a girlfriend worked for. I bult them two high-end workstations in 1999 as a favour to her - I made buttons on the sale but went in and walked through how to use Win NT4 etc. They were not my best customer because I sold them two expensive workstations that would run for 3-4 years before they needed new ones.
They were my best customer because they came back to me a year or so after the hardware sale. They felt the company doing their IT support was ripping them off (they were). I offered to support them on a T&M basis with my time being worth £55 per hour (I didn't really want their work so I priced myself expensively). They jumped at this (apparently they thought this was cheap!) and I made far more money from them setting up new users and installing/customising the Dell servers and Workstations they subsequently purchased without having to deal with warranty issues etc.
I picked up a few other clients like this and made good money until around 10 years ago when I landed a decently paid full time role for a large corp. The lessons learned doing my own thing and being a jack-of-all-trades have served me well ever since so I wouldn't discourage anyone from trying to run their own business. You just need to let your head rule and do the maths on what it is you are selling. The money is in the services you could provide, not the customised tin you want to sell.
For now at least I'm unsure of the market potential available for something such as this especially for a start up, however me and a partner were interested in trying to focus on smaller companies / expanding companies if that makes sense? I know we would be a no name compared to say Dell however comparing some ideas we can make machines with similar performance and some additional features to a Dell counterpart at a very close price, that's without factoring in our time to build them of course but also trade and bulk discounts, hopefully if we can present a good product it gets us through the door for further deals with them such as services mentioned, warranties ect.
At the moment I'm doing an IT service desk job / apprenticeship and my friend / partner is in the same role but about a year ahead.
And then, only if your selling hundreds of them per order.
How?
This is the issue you haven't considered, it sounds like your massively undervaluing your time. Your time is going to add hundreds to the cost of builds for what it sounds like you want to do, you simply cant compete.
If a company has a choice between a £600 Dell with support, or your £1000 equivalent maybe with support but unlikely free, they're going with Dell.
You cant compete in that kind of market without massive build plants and massive contracts against companies like HP and Dell. You have to specialize, and even then most specialized markets are highly competitive.
One computer build type company that ive seen recently who seem to be doing reasonably well is system76 providing Linux build computers. I don't think there's a European equivalent. So its not impossible, but you have to look at if theres a market for it, if you can compete.
Sorry to interrupt, but Entroware are an up and coming Linux PC builder this side of the pond, and I guess they show it is possible to start up a new building company and prosper. But they are targeting a niche market, which would get saturated with more than a few competitors. Not sure @jjones95 if you already have a couple of customers in mind? If so, be careful of poaching existing customers from previous employers without checking your contract for hooks, but if you have a few to start with, fairplay to you and good luck expanding, the first 3 years of any business are the worst
All really great points thanks, it's much appreciated.
For now its all a concept, I see the difficulty in doing something like this, and making it even close to being successful is going to take a massive amount of effort.
I have a few customers in mind, and I don't have to worry about undercutting any company I've worked for as none of them have been IT companies to start with, at the moment I'm working for local government.
I can see that Dell and HP are huge companies, with massive logistical resources, however as unrealistic as it may sound I do believe there is a market for another option which can be tailored to indidual users needs especially in small and developing businesses, a complete package at a good price and rolled into a contract which keeps them with us. I've probably explained it terribly haha but in my head I can see it somewhat working.
Just trying to straighten up the idea a bit here haha
Yes, that makes perfect sense, you want small companies who have no organic IT support for clients.
Ok, so this is a good time for you to try this. I assume you are both young enough not to have families etc. If you try this now you can afford to put in the hours for minimal returns in order to get established without pissing off wives/partners and not seeing your kids.
For example I worked all night a couple of times to recover clients from virus or other self inflicted damage. The pay for doing it was pretty good but the references those clients where prepared to give was worth more - turning them down would have been stupid. Also I was only able to win this work becuase established support companies could not put someone on-site quickly enough and wanted a lot more money for it. Back then they were also only willing to deploy and support Windows. I could drop in SuSE or Red Hat to repace broken and out-of-support Windows NT servers (this was around 2003/4). Being able to out manouvre and under-cut established IT consultanices was key and this likely still holds true if you want to get into that line of work.
The only time I did hardware builds that paid well was when a client was up against the wall and needed a replacement workstation ASAP in order to hit their deadlines. In that sceanrio you can charge T&M for getting all the components together, doing the build and being the hero who saves the day... I only ever did that twice that I recall between 1998 and 2006, so it's not a business model you can rely on!
The hardest thing was that a flow of steady work remained elusive. Once a client was stablised and their staff educated the billable hours dropped off. Unfortunately I was rubbish and turning clients willing to pay for high T&M rates into Managed Service Contracts. I always needed to keep an eye out for new business and this was hard because I still worked a regular 40 hour week. Therefore I never managed to win enough regular work to quit my 9-5 job and it remained a side-line that occasionally paid extremely well.
The other downside I found was dealing with finance and paying taxes. I expect that side of it has become even more complex with increased red-tape from HMRC. I tried to avoid using accountants but that was pretty stupid. I think I just added to my own stress and ended up paying more tax than I should and claimed fewer expenses than I was entitled to. I also never set up and Ltd, which I probably should have. The fact I wasn't an ltd and VAT registered lost me the one client that might have turned into a £100k per year contract - Doh!
Do it, enjoy the stress, and learn. If it works out well done, you have made it. If not don't feel bad, you now have a degree from the university of life :-)