Path: utzoo!utgpu!news-server.csri.toronto.edu!mailrus!cs.utexas.edu!swrinde!zaphod.mps.ohio-state.edu!usc!elroy.jpl.nasa.gov!ncar!tank!gargoyle!ddsw1!ddsw1!karl From: karl@ddsw1.MCS.COM (Karl Denninger) Newsgroups: comp.sys.ibm.pc Subject: USA-Flex, and ordering from them. Message-ID: <2624bc70-28e0.1comp.ibmpc-1@ddsw1.MCS.COM> Date: 12 Apr 90 18:00:08 GMT References: <90102.002037MHS108@psuvm.psu.edu> Lines: 116 >Item 10464 (0 resps) by MHS108 at psuvm.psu.edu on Thu 12 Apr 90 07:21 >[Mark Solsman] Subject: USA-Flex, and ordering from them. >(66 lines) > (tale of woe deleted) A few notes....(read the last few paragraphs even if you're not interested in this; there's a nice story in there) I can't say that I agree with what USA Flex has done here, given an accurate accounting of the matter. However, let me point out a few things: * You bought from the lowest bidder. This in and of itself has some inherent problems, as the lowest bidder also has the lowest costs. Cost includes product cost, but ALSO includes employee costs... which translates into less knowledgable employees in many cases. * The "low bidder" usually is running on a margin of 5-10% markup. This is unreasonably low for a number of reasons; the end result is that you simply CANNOT expect them to do a lot for you, or they will lose money. Now, you may argue that 5-10% is a good markup, or whatever you want. The fact remains that an employee costs a company some 2X their salary after benefits, time off, tax implications, office costs etc are taken into consideration. Remember that >all< facility costs have to be taken out of that 5-10% markup. To make this pay you have to a hellishly high volume of business, AND you can't screw up. Not even once. If you DO screw up more than once in a blue moon, you'll go out of business. This is one of the reasons that most dealers charge that "20% restocking fee" -- so they have some income to cover when they (or you) DO screw up. A retail-price dealer won't have this problem, because he'll sell at a higher margin, and can afford to "eat" a few problems to keep his/her customers satisfied. For the person who says "So what if I cost them money" -- think again. If you and a few others to do that, they go out of business. Now where are you? You have NO support at all if that should happen! I've said it before here and I'll say it again. You can't expect excellent service from a mailorder place if you want the rock-bottom price. The people who shop on price alone are inevitably going to get hurt, sooner or later. This is one reason my company doesn't try to compete with places like USA Flex; we simply won't lower our service standards sufficiently to be able to price items like they do and still stay in business. For >my< money, and my company, I am willing to pay a little more. I do this knowing that I will have a place to turn if there is a problem, that the people who work there do care about my satisfaction, and that they have the room to work with should there be a problem. Note that the big mailorder places >don't care< about whether you return to buy more product, since even if you're a huge company you account for such a small percentage of their revenue you are insignificant to them. Besides, there is always the "new blood" coming in through the magazine ads like Computer Shopper, which caters especially to the "price above everything else" crowd..... When you buy from someone who handles product for a 5-10% markup from their cost you should expect nothing other than that the product itself will be delivered to your door in a timely matter. That's it. And I've yet to meet the "mail order discounter" that is the exception to this rule more than a small percentage of the time. EVERY ONE of them I have ever dealt with for more than a couple of purchases has screwed up in some fashion at least once, and every time I've eaten their mistakes (or DOAs) in one way or another. Sometimes it is time, sometimes it is money. Either way I lose. Mail order discounters are great for people who KNOW WHAT THEY WANT and are willing to live EXACTLY within the terms of a product's capabilities and warranties. IMHO, if you are not in the position to quote part numbers to a salesperson, get a price and delivery date, and solve your own problems then you should accept the slightly higher price of a product from a local dealer, or at least a full-service mailorder place. They will not be able to deliver product as cheaply as some of the other places, true. But they will support you when you have trouble, and if there is a problem they'll do something for you about it. Speaking of which, let me tell you a story: We have a customer who bought a system from us about a year ago. Last week his hard disk bought the farm -- the system is out of warranty by roughly three weeks. We are getting his disk repaired and loaning him a drive while his is being fixed. We did this by having some pull with our distributor, who ALSO charges a slightly-higher price than the rock-bottom distributors for the same product. Those other distributors would have told US to pound sand; this one took care of the problem instead. No charge; we ate two on-site service calls as well. Note that we, and our distributor, were under NO obligation to do anything at all. The warranty had legitimately expired, by the customer's own admission and paperwork. Try THAT with a mailorder company. The disk drive, by the way, costs over $2,000 new. The only alternative for this customer, if we had not done this for him, would be to buy another drive or have his fixed at his expense -- and by expense I mean roughly $500 -- with only a 60 day repair warranty -- and be without the drive for two weeks! Not nice, and not practical if you're using the system in your business! Guess how much money AND downtime you'd be experiencing if you had bought that same system from the likes of most mailorder discount houses? NOW who do you think got the best deal? The guy who bought his system from Gateway and saved an initial few hundred (or even a thousand) dollars, or the one who spent the extra money? Sure, we can't do this all the time. But we can do it sometimes, and when we can we WILL. THAT's the difference between a full service dealer and a cut-throat mailorder house. That is why you pay the extra money to a full-service company. Make your purchasing decisions with the facts. Up-front cost is not the only thing to be concerned with. -- Karl Denninger (karl@ddsw1.MCS.COM, !ddsw1!karl) Public Access Data Line: [+1 708 566-8911], Voice: [+1 708 566-8910] Macro Computer Solutions, Inc. "Quality Solutions at a Fair Price"