Start & Run a Computer Repair Service (Start & Run Business Series) (2012)
14
Extra Sources of Income
As a business owner, you have the opportunity of adding other sources of income to your business. As you work, keep an eye out for new services and products your customers request. What starts as a small side income could expand in a direction you never expected. This chapter lists some of the side businesses that could mean big revenue for you.
1. Maintenance Plans
If you get regular business customers, you may be able to interest them in a maintenance plan. What this means is that you will arrive at their place of business at a set time each month (or sometimes week) to handle any on-site issues they may have. For small, growing businesses, this may be an inexpensive option as opposed to having your own on-site staff. For you, this source of income can provide regular revenue.
2. Computer Recycling
In most areas, you are not allowed to throw away technology equipment. In some places, homeowners have to bring their old technology equipment to special disposal areas. These types of laws make it difficult for most people to get rid of old, worn-out computers. However, when computers are being repaired or inspected, you will often find customers with computers they no longer want and don’t want to bother disposing of themselves.
You can offer your customers a chance to recycle their computers with you. If they no longer want the equipment, taking it off their hands is great for you and for them. There are many things that you can do to recycle the equipment, as described in the following sections.
2.1 Repair and sell
Although it may not be cost effective for the customer to repair an older machine, for you, it may be just fine. If the person needs to wipe and reload a computer, it will often cost him or her between $100 and $200 even if the computer is still an old machine. However, as a technician, completing a wipe and reload may be simple and you can turn around and sell the computer.
Completing repairs gives you a usable computer that you can sell as a used machine. Just make sure to fully test the computer before you do any software repairs. If any parts fail, it may be worth keeping parts of the computer instead of repairing it.
2.2 Keep the computer for parts
The computer may be in bad shape, but there are often parts that you can reuse. Does it have RAM? Is the power supply in working order? Does it have a good CPU? Keeping some used computers on hand means that you have an inventory of used parts for repairs. Sure, they aren’t able to be sold for as much as a new system, but considering they cost you nothing, sales of any of these parts are pure profit. In general, stripping a computer for parts can be very profitable and even a nonworking computer can make you $50 to $100 after the parts have been fully tested and resold.
RAM is generally good in the system. Very rarely is bad RAM the source of computer failures. With that said, you should still run tests (e.g., QTP) on each stick individually before making it available for resale. Because used RAM is as durable as new, you can often sell used RAM for just $10 less than the price of new. In Q1 of 2011, a stick of 1G DDR2 used could be sold for as much as $35 and would save the customer between $10 and $15 off of the price of new!
Power supplies are one of the most common parts of a computer that have problems. This part needs to be tested thoroughly before resale. Further, a normal power supply tester may not be enough, since most of these testers don’t test all the connectors. If you place a nonworking power supply in an otherwise good system, you can short out working parts. While I wouldn’t be opposed to using used power supplies to build used systems, selling them to customers without having fully tested them is a risk.
Hard drives are another easy part to test and resell. Once again, QTP has a testing tool which allows you to check every part of the drive as well as the drive speed. If the drive is running too slowly, or if the drive fails, it should not be resold — even if it works. However, if it works, used hard drives can be sold for as much as $20 for a 20G drive, or $55 for an 80G drive! Just remember, before you sell any used hard drive, it should be wiped clean of old data.
2.3 Sell the parts on eBay or Craigslist
In some cases, you will find that customers have given you specialty computers or laptops for recycling. Since these computers vary greatly, it is often worth putting the parts on Craigslist or eBay. Working and tested custom parts are often priced based on availability. For example, an old slimline power supply can run as high as $100 for a used replacement. While this may sound crazy to most of us, their rarity increases the prices.
2.4 Scrap it
Even if every single part of the computer is beyond repair, the computer still has value. Keeping the computer parts and collecting them will allow you to turn them in at scrap prices. Because of the special metals that are used in CPUs and sometimes wiring, you may need to divide the computers into parts. Typically, a pound of CPUs will pay more than a pound of case metal.
Collecting all of the parts together and finding a recycling company in your area will make sure that collecting scrap computers from your customers remains profitable.
3. Website Sales
Since you are going to have a website, you may as well sell your products on the site. Although you may not get much traffic at first, having your products up on a website will serve as one way of tracking your inventory. Plus, if you get news coverage or other publicity, the Web traffic it generates can quickly turn into retail sales!
4. Inventory
To keep things simple, determine what you want to sell. You may just want to limit your online business to a few used or new computers. Or, if you have some free time, you may list every product that you can carry. Unless you are getting a lot of traffic, do not try to keep inventory for these sales. Remember, most people expect Internet orders to take a day or two to ship. That will give you plenty of time to rebuild a machine or find a part if you need to. The cost of keeping a large inventory for Internet sales that never materialize could be expensive.
5. Drop Shipping
Another option is to work with some vendors that are willing to do “drop shipping.” What this means is that you put the vendor’s products on your website. Your price is the cost the vendor charges you plus the profit you want to make on the vendor’s product.
Next, you ensure that shipping and handling is correctly managed. Then, you sell the vendor’s products without keeping anything in inventory. When the product is ordered, you simply take the order, and enter it into your vendor’s system. Because your vendor does drop shipping it will ship the product directly to the customer from you. This means that instead of showing the vendor’s name, it will allow you to provide the receipt for your sale.
For instance, one of my suppliers allows drop shipping with TVs. Let’s say that a customer orders a TV on our website for $1,000 including shipping. However, the cost to us, including shipping, is only $900 for our vendor. We then provide the customer’s information to the drop shipper and it sends the TV to the customer! Since the warranty for the TV is through the manufacturer and not through the distributer, we shouldn’t have to handle any problems with the TV.
The only thing to be aware of is the return policy. Since many vendors don’t have an easy return policy, you may need to adopt the same terms. After all, if the customer returns to you a $1,000 TV, you will then have to try to find a way to sell it or swallow your cost of the TV!
6. Website Development and Domain Reseller
Another way to make some extra sales is to offer website development and become a domain reseller. GoDaddy offers a simple program that will allow you to become an official reseller complete with your own website, shopping cart, and the ability to take credit cards. Although this program does have associated yearly fees, it may be worthwhile if you plan to complete enough sales.
Also, if you are going to sell website domains, you may want to offer website design as well. With tools such as WordPress and Joomla! available it’s easy to make professional-looking websites that can earn you as much as $500 to $1,000 for most sales.