SMBs

Is there a future for locally owned PC retailers?

I made a welcome discovery while wandering a shopping center yesterday: I found an independent computer sales and repair business. Before the Internet and the big box stores, these establishments formed the backbone of the computing community. Are they viable anymore?

I made a welcome discovery while wandering a shopping center yesterday: I found an independent computer sales and repair business. Before the Internet and the big box stores, these establishments formed the backbone of the computing community. Are they viable anymore?

---------------------------------------------------------------------------------------------------

I did not get my own personal computer until 1995, midway through my freshman year of college. I finally decided it would be more productive to write papers in my dorm room, rather than hoping a machine was available in the university lab. I could also get connected to the campus network and browse the World Wide Web, which I'd just begun hearing about.

When I was shopping for my first machine, the landscape was completely different. RadioShack was the big name in the electronics retail, and Internet shopping did not yet exist. When I decided I wanted to get a computer, I had to find someone who could help me make educated choices.

I got the help I needed at an independent computer shop. Run out of a storefront on Chicago's North Avenue, it was a playground for my nascent interest in technology. I have forgotten the name of the store, but not the hours I spent there. Every time I needed some help with my computer — upgrades, repairs, even just new software to play with — I would hop on a bus and visit the shop. Hanging out there set a hook in me and put me on the path to working with technology professionally.

More than once when I was visiting, I thought about how cool it would be to own my own PC shop one day. As volume retailers and the online shopping have become the norm, though, I wonder where a small technology business could carve out a niche.

Focusing on sales seems to be a lost cause. Volume retailers have the advantage, with their purchasing power and relative immunity to market fluctuations. I like to think that entrepreneurs can find success by providing technology services, either for consumers or for small businesses. Service firms don't need a retail presence to attract customers, though. Such a business could be marketed online, and services could be rendered at the client location. An investment in a brick-and-mortar location would hardly be needed.

I have a hard time justifying the creation of a sales-and-service storefront like the one I admired in my youth. Creating a physical space like that seems a frivolous use of capital when the work doesn't require it. Do you have fond memories of a locally owned computer shop? Any ideas about how one might survive in today's economy? Are you a business owner who has managed to stay afloat? Let me hear your thoughts in the comments.

75 comments
ozi Eagle
ozi Eagle

Hi, If you are looking for a career path in the PC business, as an owner operator, I would suggest that you forget about a shopfront selling PCs, for the many reasons given above. I went solo 9 years ago, I service small business and try to stay away from domestic work ( it doesn't pay well, many never paying). Business is more aware of the costs to them if the computer falls over, and is prepared to pay $100 + per hour to have it fixed quickly. I supply business quality computers that I source from a local wholesaler, with whom I have a good relationship. I have learnt a particular off the shelf software package for the retail industry and have become certified in it. This gives me exposure via the principal company and also makes me part of the community of IT pros that work with this package. I have a room at home set up as office/workshop so my overheads are minimal and deductible. Herb

V
V

Yes. But only if they adapt for a shrinking market, and provide other services that can compensate.

sborsher
sborsher

I don't know if viable is the right word; maybe relevant. When I was young I hung out at electronics stores of the time, being an amateur radio operator (ham) at that time. Most of those are gone now where they sold electronic parts, kits, and educational items. The range of electonic items is now so vast that no mere storefront could stock all the items necessary to be useful. Radio Shack still stocks a handful of electronic parts, but they keep sweeping the store inventory every few months to get rid of obsolete items. Radio Shack has remained relevant throughout its existance, to the best of my memory. They transitioned from a name appropriate business, through the computer age, to the digital entertainment and cellphone age. However, they're slogan "you've got questions, we've got answers" has not been accurate for a very long time, except on an extremely hit and miss basis. So what of your storefront computer store? Similarly to the electronics store problem, one store just cannot stock all that one would want. I used to buy all my early PCs at Staples, but no longer; there are simply to many choices for a discriminating PC buyer. The next time I upgrade I will probably build it myself as all major parts are now reviewed on line and I finally feel that I can't make a mistake in the process with all that is available online today. And not only are the parts available, but any help one would need with a PC is available in a Google search. Try walking into any store that sells PCs and ask them what error such and such means. Now, all that being said, it does amaze me that something as complicated as a PC can be owned and operator by an average consumer and have flourished without neighborhood support. I think that Best Buy, Circuit City, and others have finally started covering that issue, and cheaper than a smaller operation could. And, finally, all that being said, I do lament the loss of those storefronts of old, as I'm sure you also do, but the Intenet is a 24/7, tireless, accurate, reliable, if not interpersonal, purveyor of all items, if you're careful, of course.

HAL 9000
HAL 9000

For this to have been a possibility as when I was young there was no PC's. However when I was considerably younger there was a Hobby Shop that specialized in model Aircraft of the control line type as RC stuff back then was way too expensive to even consider by all but the super rich which I wasn't. Anyway it was a poky little store in the back of nowhere and there was no room to move the place was literally crammed to the Rafters with stock of one kind or another and there was even some non Model Aircraft stuff in there which was show I initially found the place when I went looking for some Scaletrix Spares. Anyway this place had one low wattage light bulb in the entire place maybe it even reached 25 Watts on a good day but it was dark dingy and the absolute best store I have ever been in. Granted you couldn't move down the one isle if there was someone else already in there but it had everything that it was possible to buy and quite a lot of other stuff that just was no longer made. Today at least 40 years latter whenever I mention this place I have yet to find any person who doesn't know of it and most are way too young to ever have walked into this place as it shut a few years latter when the owner died and the family sold off a lot of the stock or gave it away to some of the many customers who lived there. Places like this are no longer feasible these days it's not possible to compete with the Big Boys who have massive shops with wide isles and Designed displays to attract your attention. The Malls that are so popular now are the single biggest reason that this type of place can not exist as these places are way too controlled by the owners who want Bright and Fresh Displays and shops. While they look great they also have a lot of unused Floor Space which is what the shop owner is paying Rent on and these Malls kill you in rent. They start off being almost reasonable and then after 3 or 4 year when you have established a reputation and a half way decent business they up the rent to a outrageous amount and then want a % of the take and just to make sure that you are not robbing them blind they insist that you employ one of their staff to work the till to make sure you don't underpay the Owners. Unless you actually own the store in a backwater location there is no way that you can run a business that attracts Loyal Customers the same way that store of old used to attract and keep customers who literally became part of the Family. Modern Shops are not worth entering unless that have several Million Candle Power of Lights blazing attempting to blind all who walk past in an effort to attract attention as well as all the bright flashing lights that seem mandatory to advertise the marvelous bargains inside. Today it's all to do with the bottom line and the turnover and customer satisfaction barely rates a mention and when on the rare occasion it does some Pimply Faced young punk will laugh at your face insisting that is not the way to attract business as no one now wants to be served. It costs too much money and is way too slow. With Computer Retail the reality is that there is very little money to be made in new computer sales the real money is to be made in the Service Side of the business as this has a Rate that can be increased as the cost of things goes up not cutting back profit margins just to be able to pay all of the bills that arise from places like this. People have also changed a lot since my younger days as I used to have a shop 20 years ago and I had a bad reputation for repair work not because I didn't do good work but because I put myself out for the customers and tried to help them by doing things the same day for out of town customers and within a week for the locals. This resulted in the mistaken belief that I wasn't doing good work because it was too fast the guy 200 KMS away who held a unit for 6 weeks and would then hand it back with a big bill without actually powering it on was OK because he took time to repair things and the fact that you had to return 5 times to get it fixed properly was a good thing from the customers prospective as they had to return several times and on each occasion spend more money as well as being sold product to use. What cruled it for me wasn't even the customers but one of the major suppliers who I had left used me as a Unofficial Warranty Agent for them so I would routinely get machines sent to me by their customers without any warning or lists of what was wrong and be expected to fix them for free. What was the most galling thing for me was the number I got from that Great Repairer down the road who couldn't fix their machines but this bad repairer was put down for fixing them properly with a 1% return rate in a day. :^0 Na I cut my losses and sold the place for about 5 times what I considered it was worth to the guy down the road who stuffed up all the time and got the hell out of the place. Wasn't worth paying the rent and keeping the Banks, Landlord, Power Supply Company, Phone Company and so in in business just so I could bring in less that what I would get on Social Security and needing to work long hours into the bargain. OK so I was bringing far more than Social Security ever would but I was also spending far more to support the Banks, Landlord and so on for nothing. The only way I would consider opening another shop is if someone gave me the block that the shop was on and I didn't have to pay rent then just maybe I might consider it but even that is unlikely. Actually borrowing money to buy a place and then paying the Lender back for 25 years so that one day maybe I might own it if the council didn't come and seize it for some new development that they had planned and their minimal Compensation packages that you have to fight like hell to get 1/10 of it's actual value just isn't worth the effort. I know 2 shops like that old Hobby Store and when I ask the owners how they stay in business their explanation is I own the place nuf said. Three others have been resumed by Council to widen a Road or add buss lanes I just don't see that it's worth the effort now holding a shop front. Col

adpicurro
adpicurro

I hope there is, I just got ripped off by New Egg, will never make a puchase from them again. When you by local at least you can test befoe you buy

computer_solutions
computer_solutions

I have a locally owned PC retail shop. I sell some machines all built by another company. I do service calls and dropoffs. I am in a very small town with 50 miles to go to the next city. The rumors of my death are greatly exagerated.

usdad
usdad

I just recently built a PC and ordered all the parts, including case at a local shop that beat even all on line and large storefront(Best Buy) pricing.

enfield_john
enfield_john

Yes, I think that as long as the "Big Box" stores continue to have such abominable customer service, slow turn around times and inflated labor prices, there will continue to be a market for locally owned PC shops. I personally work on PCs out of my own home and have several repeat clients as well as some occasional new ones. I'd have more work than I have time to complete on my own if I actually advertized. Word of mouth seems to be working fine for me. Most of my clients are people who have gotten burned by one of the "big box" stores and they swear they'll never go back to them for service if they can help it. I can do the same repairs the big guys do at a fraction of the cost in labor and with much less down time for my clients. I also take the time to get to know my clients so that they feel less like a number and more like a friend. Lots of people are sick of being treated like they are nothing more than a wallet for the store to pry open. The trick to staying in business is staying up to date on the latest developments in computers. Every now and then, I get an issue with a computer that I haven't seen before and I have to educate myself to figure it out. I used to work at "big box" PC stores and hope I never have to again. It's better being your own boss.

rmlounsbury
rmlounsbury

I have two local PC shops that I frequent for odds-and-ends type stuff. A good example was when I was building "the ultimate budget PC" based on the specs that Ars Technica cooked up I found the case I had with two IDE Drives just wasn't going to work so I hit up the local shop for a IDE/SATA bridge. No way I could wait for newegg to mail that piece. I wanted my new Ubuntu station working that night! So they are great resources for odd parts you need in a pinch. I've noticed that both are offering "you pick the parts and we build it" services for just $25. They all seem to do well business wise and typically offer prices competitive with newegg.

john.hellmann
john.hellmann

I have run a modest computer business out of my HOME for the last 15 years in a town of 15,000 (community overall about 40,000). I've watched competitors come and go, after opening a storefront and stocking it with display parts and systems, and a counter person there for that 9-5 open availablity for walk ins. That just isn't much of a viable business model in this community. I don't make enough for a new BMW, but its a modest living. I have reasonable hourly rates, don't charge if I don't fix, and do not deal in used parts. I actually have very few 'whole system' sales, most of my business is service (sometimes just tutoring), setup, software installation, virus removal, data recovery, and networking (home and commercial). I do EVERYTHING by appointment, have a dedicated phone line with an answering machine (funny how customers are amazed when I actually call them back), and I am very careful where I spend advertising dollars (phone books, magnetic signs on my truck, Chamber of Commerce). It was part time for many years, now its full time, and no sign of 'going away' anytime soon. I expect an honest technician with a good reputation (word of mouth can go BOTH WAYS) can make a go of this business, as long as he or she develops a reliable business model and sticks to it. John (Computer Tech since 1981, in business since 1993)

icbhod
icbhod

My IT career started here in Gainesville, FL and after 10 years of being away in Nashville, TN, I have come full circle and, I am pleased to report that local computer shops and locally owned IT companies are still the way of things here. Sure, at UF there are lots of Dell's and Mac's but when the students need repair work done and the on-site service is unavailable, they turn to locally owned IT companies. Gainesville is an anomoly and, I fear, becoming more of one daily. Here, the "Mom and Pop" shops are the way of things. Locally owned businesses thrive even in the shadow of the Wally Worlds other big box retailers.....I love that about this town. This same mentality bleeds across all of the industries and so it is far more likely that a company in Gainesville, FL will call one of the local companies to resolve their issues than they are to call an outfit like BancTec. Same goes for installing networks and maintaining servers. I love this town.....one of the best places in the nation to live.

ssine
ssine

Having done some side consumer jobs for a little extra cash, how does one (local store or individual tech) deal with the nagging customer who has an issue, you resolve the issue, then 2 days later calls you and says "ever since you did this, now my system is doing this". The second issue may be the same issue you fixed (like virus, spyware, etc.) because consumers don't care where they are going, what they are downloading, or keep their systems updated, or maybe the new issue has nothing to do with what the original issue was but the customer thinks it does. Either way, you go and fix the second issue because you do not want the person to feel like you took them over and then a couple days later they call you with "ever since you did this, now my system is doing ..." and the small easy job turns into a non profitable nightmare that you can't walk away from.

dick.hawes
dick.hawes

Absolutly! I build my own computers and need to talk to a person once in a while. I hope a few of the stick around.

kehoffman
kehoffman

Check out http://www.mapletronics.com/ Started from a Radio Shack outlet in 1992 With 2 employees, now has 63 employees with branches in Fort Wayne, IN and Sarasota, FL. Has a full training center, engineering, building, repairs, managed services, internet provider with everything from dial-up to fiber, and a redundant data center. We aren't going away. We have a better idea than the big box boys. Keith Hoffman

Sensor Guy
Sensor Guy

There will always be a good market for local business focused on building relationships. All you have to do is look at a similar industry that has had a similar trajectory: automotive. First it started with the tinkerers and daredevils, then it moved into the giants and now there's room for both small shops, vendor shops and big box retailers. The key is probably arriving at the right mix of product sales, services and custom development. Although most focus on just retail sales and maintenance, many are now branching into business consulting, small custom programming development or custom software maintenance. Many are also moving beyond the PC/MAC space into networks, advertising, VoIP home telephony, personal gadgets, wiring, security and even custom sensors and actuators. In my area I do lots of business with a chain of stores called Intrex Computers.

jimpg
jimpg

Apple's "walled garden" approach seems to allow retail stores in expensive locations because they control the prices and eliminate true competition. They always seem to be busy with potential customers and if they're not, they shut down the store.

jsaubert
jsaubert

I think that people are becoming more apt to fixing their own computers or have a friend or relative that can. The days of the storefront are nearing the end. Having face-to-face service is nice if you don't know what you're doing and don't have anyone to turn to but that percentage of people is quickly shrinking. Even the market for custom built computers is dying, people that want them are mostly becoming DIYers or, like me, just mod a pre-built system. ----- There are three different computer shops in my town, at one time there were five. The two computer shops that were very good decided that they would merge and become one company a few years ago when the local computer business were taking a hit. One shop went out of business. One does networking and web design in addition The last one ought to have been shut down years ago, they are basically inept shysters that sell broken goods and pirated software.

George@2ndfloorcomputers
George@2ndfloorcomputers

William, I assume your still in University (13th year now is it?)...because only narrow minded or unenlightened individuals could judge the market with one large stroke of a brush. Best Buys, Staples, Future Shops (Canada) are the joke of the PC industry. You go there when you have to trust a commerical on TV to make your computer choice. Believe it or not William, there are Businesses out there, and individual consumers who HATE the big box stores. It dosent matter how many leather sofas they have in front of the big screen TV, you don't get personal Service, you never talk to the same person twice (high turn over in Retail), the service is awful on a good day and people question why they should support a store "with all their purchasing power", as you put it. The big screen TV's in the show room, the commerical's at half time, the flyers in your mail box, are just a gimmick to move cheap (electronic) stuff out the door, and that includes computers. God bless you though for buying into their Marketing, that's exactly what they want.

clwyattjr
clwyattjr

I have owned and operated a local shop for more than 8 years now and we have grown each year. Our current economy has actually helped us because people are willing to spend 100-200 dollars to repair now, whereas a year ago they would have just bought a new one. Another thing that helps us is the fact that the big guys (Dell, Emachines, HP etc.) have contracted out their support to places like India, Pakistan and the Phillipines. I have about a dozen customers each week that call or come in for service who say they where on the phone with them and got frustrated because they can't understand them. I also am selling a lot of new machines because we are still building with XP and many customers don't want Vista. Just as a side note, a Microsoft rep called me last week and wanted to know why I had not bought any Vista's (I buy from MALABS), and I ask the rep what was running on his computer and he simply said have a nice day and ended the call!!!! I plan to be in business for a LONG time!!!!!

itpro_z
itpro_z

I owned and ran my own PC shop for 15 years starting in the mid-80s. Over that time, the margins on computer sales steadily eroded to the point where it did not make sense to sell PCs, but there was still good money in service and support. Once I simplified my business and stopped selling big ticket items, my cash flow was better. I would still sell those items, like cables, that had decent markup, but every thing else was labor and consulting. My major customers would consult with me about their needs, and I would recommend specific models from Dell or CDW. When the new equipment arrived, I was paid hourly rates to configure and install. I was set up with most of the on site warranty companies, so if the unit broke, I got paid very well to fix it. Add in network support and management, and I did quite well. I see no reason why this business model would not work well today. You can also keep your overhead low by working from home. Why did I leave that business? One of my best customers got bought out by a big company, who promptly offered me a full time position with excellent corporate benefits. I sold my business and moved on, but in some ways still miss being my own boss.

silverweb
silverweb

I live in a very small town in Ontario, Canada and we have two local PC stores. There are no big box store here at all. silverweb

AndrewB
AndrewB

I would like to think so. The local shops were so convienent... but now, so expensive. The big box and retailers have killed them... I remember fondly the local computer store in my home town. They were friends... they also ran a BBS out of their!!! This was in the mid 1980s!! This was went my 1200 baud modem was a rocket ship! :) I rued the day when corporate America killed the little guy... for my friends, the first thing to go was the name... the cute techie names from the 1980s were being wiped out in favour of more business professional names. I guess that happens when any industry matures. But the days of "Intergalactic Digital Research" were gone...

reisen55
reisen55

Just a little on in Ramsey on Route 17. I bought a copy of DOS there in 1992 and it is still alive, by what means I know not. I think they have an excellent lease which allows for financial footing. I worked for a MicroAge (remember) in Mahwah NJ and it moved to Paramus. Excellent full service shop that was destroyed when four large accounts pulled out. A sales rep had a wonderful markup ratio there: selling $13.95 Belkin cables to Mt. Sinai Hospital for $ 1,300 dollars. No kidding. The small stores are mostly gone, for the cost of brick and morter for a store is high indeed, and profit is non-existant. The PC Warehouse in Ramsey is a total shock to the above rule. I truly wish them well. Larger chain: MicroCenter is an amazing concept, and I commend any professional on this board to VISIT A LOCAL STORE IF YOU CAN FIND ONE.

mjd420nova
mjd420nova

I don't own or operate a store front business but I build and sell an average of four desktop units a week. These are custom units, built to the clients specs and parts are procurred from the local Fry's and other distributors. I also provide the service for those units so it's important to me to get some kind of gaurantee from my suppliers so I can help to keep my costs low. I don't think that owning a shop would increase my income and would be a big liablity when it comes to maintaining a store front operation.

JohnMcGrew
JohnMcGrew

As long as they provide a level of service that the big-box places cannot/will not, they will survive.

timmyjohnboy
timmyjohnboy

I think there still is a need but I'm not sure for how long. In my experience, there still are those people out there who have a hard time shopping on-line, either because they fear doing business online or they lack the ability to search out the equipment they need or want. I suppose a good compromise would be offering shopping assistance along with the technology services. This would remove the need for the brick-and-mortar.

sizemoreg
sizemoreg

I myself am an avid fan of the local PC shop. True you can get a new PC for less from the big guys, but do you really get your moneys worth? NO! I have been a "Techie" since the mid 70's ( remember the big terminals--woo-hoo). I have always prefered the smaller company over the big one for the simple fact that you could get a computer the way you wanted, and the tech would set your system up so that you could easily upgrade. More or less securing your patronage to them. To me that meant I recieved higher quality equipment. Now I build my own and the cost offset isn't really that much different from the big guys, considering what they charge you if you don't buy off the shelf units. My plus is that I get what I feel is the highest quality parts. What I have issue with, is that these big companies prey on consumers ignorance of computers. Buying computers can be compared to buying a car. There are a lot of swindlers out there (corporate type), that will tell you that you need these certain brand and that the little guy out there is going to take you to the cleaners by selling you something that is completely inferior and sub standards parts. Which is so far from the truth. truth be known, and I know, I work for one the service centers where two of the big guys have their in warranty units sent when they break down. let's just say it ain't pretty sometimes. The little shop should be saved at all cost, and I think eventually people will get tired of being pushed around by the big guys, and they will start moving back to the local shops.

williamjones
williamjones

I stumbled across a independently owned computer sales and service business yesterday, and it brought memories rushing back. Without similar places to cut my teeth when I was younger, I might be in a different profession today. It seems like shops like this are disappearing. As computers became commodities, the business of selling them became less specialized. Volume sales and Internet retail has brought prices down, but it's also sent the buying experience down the tubes. Is there still a role for the independent computer shop, or have they been replaced?

Editor's Picks