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I supply Dell servers...

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  • I supply Dell servers...

    I supply Dell servers and my margin is 20% - 25%. By having a little margin on the hardware I supply my customers, I am able to keep my labour rates down. I have noticed several of my customers are becoming members of a larger buying group, usually through one of their suppliers. This allows them to hook up with a Dell representative and buy the hardware for the same price I can.

    I have several SBS servers I plan to upgrade this winter. I put the specifications togther and I know specifically what kind of hardware to order. If my customer wants to buy the hardware, am I obligated to tell him exactly what I would order? Is he not paying for my expertise? If I make $1000 on a server and they want to buy their own server, can I charge a consulting fee of $1000 to spec out a server and tell them what to buy?

    When I take my car to the dealer to get it fixed I do not buy the parts for the dealer in advance. I would welcome any comments.

    Network Engineers do IT under the desk

  • #2
    Re: I supply Dell servers...

    I thought your account was tempered with when I first saw the thread

    Anyway this is just my opinions on the matter.
    The car industry and the IT services industry are somehow different.
    I am not sure about your consulting fees, but $1000 seems a bit steep and I couldn't justify it myself.
    I do find that as a general rule, being open to the customers may lead to more revenue.
    You could instead try to push to offer additional chargeable services to make up for the first los.
    Caesar's cipher - 3




    • #3
      Re: I supply Dell servers...

      Thought it was spamming too...

      IMHO, it is up to you -- charge a consulting / project management fee and waive part of it if they buy the hardware from you. If they don't like it, let them go elsewhere (obviously do not make this too easy -- charge for supplying things like passwords, access to public DNS panel etc )
      Tom Jones
      MCT, MCSE (2000:Security & 2003), MCSA:Security & Messaging, MCDBA, MCDST, MCITP(EA, EMA, SA, EDA, ES, CS), MCTS, MCP, Sec+
      PhD, MSc, FIAP, MIITT
      IT Trainer / Consultant
      Ossian Ltd

      ** Remember to give credit where credit is due and leave reputation points where appropriate **


      • #4
        Re: I supply Dell servers...

        just as an interesting point

        in my previous role, we were dell certified partners. We usually got about 20-25% off market prices, depending on the item. With special deal registrations, we got more off.

        for long term customers, we sold at 3-5%. newer customers only more like 8%.

        the line was always that we'd make the money on implementation and support.

        if someone wanted to buy JUST hardware, they'd probably pay more though
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        • #5
          Re: I supply Dell servers...

          For this reason alone, I have never ever resold hardware. I also dont spend too much time specing out servers, switches, routers, etc..
          I have a few that like, I send that to my client and have them go out and buy it. Depending on the product they ship to me, and I setup. If they dont like the spec they are free to buy whatever they like from wherever, however.

          This way I avoid a few things.
          Warranty issues
          Price negotiating.
          Invoicing / collections.

          What do I miss? Markup! Dont worry I collect that later in billable service

          What do I gain, happy customers.
          "...if I turn out to be particularly clear, you've probably misunderstood what I've said” - Alan Greenspan


          • #6
            Re: I supply Dell servers...

            oh, one more thing. Who sells servers nowadays anyway, its all in the cloud power!

            I skipped the whole SBS 2008 thing. No clue where we are holding now.....SBS 2010?
            "...if I turn out to be particularly clear, you've probably misunderstood what I've said” - Alan Greenspan


            • #7
              Re: I supply Dell servers...

              Lior_S, I wish it was that simple but my customers are neophytes and would ask me what they should buy if we went that direction.

              tehcamel, when the economy tanked, many of my customers has to cut expenses. Although they can't do without IT, they attempted to do more of their own problem solving. My costs went up too but I did not think this was a good time to start increasing rates. I rely on the marging for hardware and software I supply to help offset the lower labour rate.

              Thanks for the input.
              Network Engineers do IT under the desk