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Retailers, Direct Order and Resellers

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By Mark Kyrnin

Personal computer consumers today have a wide variety of choices when buying a computer system. Choosing the right system for your needs is a hard task, but where to buy that computer can be just as difficult. There are really three types of places to buy a brand new computer these days: retailers, direct order and resellers. This article is going to discuss what each of these types of companies has to offer the consumer and what advantages and disadvantages each of them has when buying a computer from them.

Retailers

Retail outlets are those stores that consumers are most aware of. This covers any type of retail store that sells prepackaged items from a manufacturer. A wide range of retail outlets sell computer systems including electronics retailers, computer specialty retailers, office supply stores, department stores, warehouse outlets and price clubs. With such a broad spectrum of retail stores to purchase computer systems from, it would seem that consumers have just as wide of a selection of choices.

One of the biggest advantages of retail outlets for computer shopping is immediate availability. Retail stores buy prepackaged computer systems from manufacturers that are in turn stored in their warehouses and stores to await purchase. They have already been assembled and tested by the manufacturers and it is simply a matter of getting the system from the stock room to the consumer. The big drawback to systems of this nature is that you are locked into whatever parts and components are packaged in the box. The only choice that the consumer typically has is what monitor to purchase with the system.

Another advantage to a retailer has with regards to computer sales is the ability to actually see and use the system that you are going to purchase. Most retailers have display models of the computer systems they sell. This allows consumers to get a good feel for what they will be spending their money on. They can physically use the computer to see how it is constructed and performs. There are limitations of course to how much you can use the system because they only tend to have the preloaded applications.

The big drawback to the retail channels for computer purchases tends to be the knowledge of the sales staff about the computer systems. Computer specialty stores tend to have more knowledgeable staff and may even have a service department. Other retail outlets generally do not have staff specifically trained in computer parts, technology or even their use. Typically they will have no more information about the systems they sell other than the specifications printed on the box or on the display. To make up for this, most retailers have a more liberal return policy for computer parts. As always, check with the retailer for specific policies with regards to returns on any purchases.

Advantages:
  • Immediate availability
  • Ability to examine the product before buying
  • More liberal return policies
Disadvantages:
  • Lack of customization
  • Sales staff tend to have less knowledge on products
  • Limited service options

Direct Order

Direct order is a very popular development in the computer industry over the last ten years. Companies such as Dell and Gateway really pioneered the development of direct order computer sales. A direct order company is one that sells computer systems directly to the consumer that they manufacture themselves. These same companies also provide support and service for the systems that they sell. With the success of the direct order companies, more manufacturers are now offering direct order services for the same systems that are sold at the retail outlets.

The biggest advantage that direct order companies have over the retail channels is the ability to customize your computer system prior to purchase. The customer has the ability to request upgrades or part swaps before the purchase is made. This can save the customer the hassle of having to doing installation of expansion parts to a computer system that was purchased at a retail outlet. The drawback to this is the availability of the computer to the consumer. It takes time for the direct order companies to build and test the system prior to shipping it to the customer. Then there is also the time that it will take for the system to be mailed to you.

Another advantage to direct order companies is their costs. Because they are both the seller and the manufacturer, they are able to cut costs to the consumer because the consumer does not have to pay the price of the middleman or retailer. In some instances, the consumer ordering from the company may save money in the form of not having to pay taxes. This of course will vary for the consumer based upon where the consumer is, who the consumer orders a system from and where that company resides. This tax savings is generally negated by the fact that the consumer has to pay for shipping of the computer system.

The disadvantage to direct order companies comes in the form of not being able to see or use the computer system before they purchase it. Tangible items such as how the keyboard feels, the size of the computer system and its appearance are hard to determine when looking at a system in a catalog or online. Some direct order companies such as Gateway branched out with retail stores to try and get around this, but this is a rare case. Consumers can try to offset this disadvantage by reading reviews of the products or by trying to talk with other consumers who have dealt with the company previously.

Advantages:
  • Customized computer options
  • Cost savings from no taxes (not true in all regions)
  • Many rotating sales offers
Disadvantages:
  • Time lag between system purchase and delivery
  • Inability to examine product before purchase
  • Service generally conducted via mail

Resellers

A computer reseller can be considered a retailer, a direct order company or both. What defines a reseller is that they build computer systems from custom parts and then sell those systems or even the parts to the consumer. They generally offer preconfigured systems similar to what one can find in a retail outlet but like the direct order companies, they also offer custom built systems based upon the requests of customers. Many of these resellers are smaller local storefronts but some of them also offer mail order or online computer sells as well.

The biggest advantage to a computer reseller over retailers and direct order companies is the level of customization that is possible. While a direct order company offers customization of the systems they sell, the consumer is typically restricted to a predefined list of options. Resellers tend to have a greater range of products and brands available for selection when building a computer system. This gives them great flexibility in offering a computer system to the buyer. It also allows the computer systems to attain a higher level of performance than what is available through retail or direct order companies.

This flexibility is great for the computer enthusiast who is willing to do a lot of research on computer parts to ensure a well built and solid performing computer system, but it is very difficult for an individual who is not familiar with computer parts as to what they may be getting in a computer purchase. The sales people at the resellers tend to be very knowledgeable with regards to computer equipment when compared to retailers and direct order companies. This comes from the fact that they are building these systems from scratch for the consumers and they tend to sell to the more advanced users.

The biggest disadvantage to reseller computer systems is the post-sales service and support. Since more resellers are small stores, they have limited stores hours. This translates into limited hours of support. Customers only have the ability to call the store during these hours for support. Similarly, if there is a problem with a specific component of the computer system, the consumer may be forced to work with the manufacturer of that specific component for service that adds another layer of communication in order to get a problem resolved.

Advantages:
  • Complete customized systems based upon selected components
  • Knowledgeable sales staff
  • Greater range of products available
Disadvantages:
  • Limited service hours
  • Restricted return policies
  • Limited software extras

Conclusions

Choosing which type of company to buy from is difficult. A lot of the decision process will probably come from the type of computer that you want to get and the type of service that you would like to receive. Retailers allow hands on examination of the computer and immediate delivery. Direct order companies offer value savings and customized computer configurations. Resellers can offer both of these abilities but at a reduced level of service. First time computer buyers are probably best going to an experience computer retailer or a direct order company. They will be able to provide a better service experience that is gear towards them. Experienced users of computers are better off buying from a direct order or reseller as they provide the most value and performance for your money.

A lot of people are curious about the pricing of computer systems between the three types of shops they can buy a computer from. To give readers an idea of what to expect, I've done a comparison of comparable computer systems from one of each type of shop.

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