Purchasing hardware for clients

[shopper150]

I purchase a lot of Apple and Dell hardware for clients. I charge for my time etc, but it would be nice to be able to get some commission etc on the hardware I purchase without inflating the price to the client (they all know how much iPhones and iPads etc cost).

Can anyone think of a way that I can make some margin on the hardware without it being obvious to the client?

[abbotsmike]

Look at trade pricing/reseller status?

[andy-xr]

If you're reselling you should be buying from a distributor. You need to talk to Ingram Micro or someone who's an actual distributor of the kit you're buying, rather than buying from the same places your clients can

The margins in hardware are low though, and you'll always make more money selling services than you ever will shifting tin

[nyt]

If you supply hardware rather than act as an agent won't you take on lots of sale-of-goods act responsibilities?

[arcturus]

To be honest, I find having a distributor account is not always an advantage. For example, I have a trade account with Midwich from whom I buy printers, toners etc. I needed a Brother DCP9020CDW for a client yesterday. At Midwich it was £156.62 plus £10 delivery or I could buy it retail from printerland.co.uk for £153.34 with free delivery. I also have an account with Micro-P and they are often more expensive than retail. The only one I find that is usually a few per cent cheaper than retail is Enta. Admittedly, I am a small volume buyer so am probably not getting the best discounts.

[P-Jay]

We've got trade accounts with Westcoast / Techdata etc for hardware - we make a decent margin on stuff, but when we take into account of labour costs (we decrap, complete all the updates, install software, transfer data connect to network etc) it's probably not that great.

Ironically the two things we won't sell are Apple stuff because every man and his dog will shop around to save every last penny and it's not worth it, or indeed Printers - because they're a HUGE pain in the arse - you're just opening yourself up to endless complaints and returns - we advise they lease a proper machine from one of the big players.

A big part of my job is purchasing - as someone else said, trade accounts don't always mean discount pricing - we sell a dozen or so routers / WAP etc a month - we've got a trade account with SEG who are the UK distributer for Draytek - Broadbandbuyer are consistently cheaper on everything they sell.

[droopsnoot]

arcturus said:

To be honest, I find having a distributor account is not always an advantage. For example, I have a trade account with Midwich from whom I buy printers, toners etc. I needed a Brother DCP9020CDW for a client yesterday. At Midwich it was £156.62 plus £10 delivery or I could buy it retail from printerland.co.uk for £153.34 with free delivery. I also have an account with Micro-P and they are often more expensive than retail. The only one I find that is usually a few per cent cheaper than retail is Enta. Admittedly, I am a small volume buyer so am probably not getting the best discounts.

I used to supply a lot of Brother printers, and at one point they introduced some kind of authorised partner scheme that you had to sign up on. Once you'd done that (at no cost) the distributors would be told you were on the scheme and you got very much better pricing - I think the price we paid for something like a HL5350 mono laser was cheaper than I could find anywhere else.

Doesn't often happen, though - there is very small margin in hardware sales, so you have to add value like on-site maintenance, configuration and so on. I think Ingram did some Apple stuff but the prices weren't that special. We signed up as a Dell reseller and that didn't help much either - I think it was possible to get them to produce special pricing, but not on the odd PC here and there. Some of the disties had started selling Dell printers, Micro P as I recall.

[LordHaveMurci]

P-Jay said:

trade accounts don't always mean discount pricing - we've got a trade account with SEG who are the UK distributer for Draytek - Broadbandbuyer are consistently cheaper on everything they sell.

Sadly this is very true of the IT industry, the internet has made a mockery of 'trade' status

[andy-xr]

Not necessarily, I think etailers have brought street prices down a lot because they might not have as many overheads, but vendors are the ones who put partner programs in place that suggest margins based on volume to resellers

The volume that the etailers are able to shift would suggest that they're at the better rates of discounts (35-40% from RRP) so they can afford to be able to sell at cost plus a few %

It's harder for the traditional resellers to do that, but the traditionals ability to add services in the right deal should help them to keep hold of customer's loyalty

[LordHaveMurci]

andy-xr said:

Not necessarily, I think etailers have brought street prices down a lot because they might not have as many overheads, but vendors are the ones who put partner programs in place that suggest margins based on volume to resellers

The volume that the etailers are able to shift would suggest that they're at the better rates of discounts (35-40% from RRP) so they can afford to be able to sell at cost plus a few %

It's harder for the traditional resellers to do that, but the traditionals ability to add services in the right deal should help them to keep hold of customer's loyalty

So you're saying it's OK for Joe Average to pay less for an item on Amazon say, than a trade customer can purchase from the likes of Tech Data or Ingram Micro?
Especially when that trade customer may have had a good account with TD/IM for 20yrs +?

[Bikerjon]

I don't really purchase complete systems, but I do buy a lot of spare parts. I looked at getting trade accounts a while back and the hoops I had to jump through plus the risk of then feeling obliged to use one or two suppliers for everything just wasn't worth it - especially in this industry where the lowest price for a part number is just a google search away. Shame in a way though because it would make life a lot easier if I could just go to one source for everything, like other trades do.

[megaphone]

As said, getting a few % margin on this kit may not be worth the aggro if it goes wrong. You can usually squeeze 5% on Apple kit, not sure on Dell.

You could try and build a relationship with a good reseller/distributor, pass all the clients work direct and try and negotiate a commission.

Also using Quidco and a cash back credit card can generate a few %. Get some free delivery but charge the client, can generate a few £.

[andy-xr]

LordHaveMurci said:

So you're saying it's OK for Joe Average to pay less for an item on Amazon say, than a trade customer can purchase from the likes of Tech Data or Ingram Micro?
Especially when that trade customer may have had a good account with TD/IM for 20yrs +?

I'm saying that the vendors should be under pressure to look at more than volume, and how their brands are perceived. Good partners who can support a customer before, during and after the sale should be more valuable to a vendor than someone who sets up a site and punts everything out cheap because they can.

It's a hard one to balance, and the end customer ends up getting caught in the middle of something. They just want to be able to get what they want at the best price, not their fault.

[CharlieCrocodile]

Ebuyer are surprisingly cheap too compared to my Techdata account. As for Apple with Techdata, when you add vat my price is 1p cheaper than buying from an Apple store directly but I suspect that Apple resellers apply to Apple for discounts directly.

[anonymous-user]

LordHaveMurci said:

So you're saying it's OK for Joe Average to pay less for an item on Amazon say, than a trade customer can purchase from the likes of Tech Data or Ingram Micro?
Especially when that trade customer may have had a good account with TD/IM for 20yrs +?

I would say that is exactly what internet shopping has enabled - there is less need for a Tech Data or Ingram Micro nowadays. The end user and the manufacturer between them can, if they wish, remove several layers from the supply chain to reduce cost and complexity. This should be done.

If Tech Data or Ingram Micro can no longer enable their customers to be competitive suppliers to end users of the equipment, then so be it. They need to find a way of adding value if they want to survive now that their role as gatekeeper to the manufacturer is being eroded

[P-Jay]

LordHaveMurci said:

So you're saying it's OK for Joe Average to pay less for an item on Amazon say, than a trade customer can purchase from the likes of Tech Data or Ingram Micro?
Especially when that trade customer may have had a good account with TD/IM for 20yrs +?

Entirely possible, there are 'box shifters' on Amazon and who use their own sites who'll sell thousands of units a week for a tiny margin - they'll get better terms from TD etc due to volume.

I use tech data daily because frankly their site makes it easier to find the right stuff, but on big jobs I'll spend a few hours sourcing stuff and can usually find most things cheaper via places who'll sell direct to the public.

[mcflurry]

What about Quidco, or another affiliate?
AFAIK they give ~3% on Apple stuff