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HARDWARE

Buying Decisions: Choosing the Right Channel

There are a wider variety of channels from which businesses can buy their hardware, from value-added resellers and systems integrators to direct-from-manufacturer and retail.
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Hollywood superstars like Angela Bassett and Jamie Foxx are more than highly paid members of the entertainment community. They’re also heads of their own businesses, which manage those big-ticket movie deals and multi-million-dollar salaries. Like every other small to mid-size business owner, they struggle when it comes to buying computer hardware.

Or at least they use to.

Foxx and Bassett are just a couple of the celebrity clients that have turned to a value added reseller (VAR) called Affluent Technology (a spin-off company of the VAR Ross-Tek) to help them navigate the maze of options in buying computer hardware. Dubbed the "VAR to the stars," Affluent Technology’s founder, Frederick Johnson is selling more than computers or even expertise. He’s selling trust. With a clientele that is especially sensitive to securing its data (away from the tabloids -- for starters), Johnson has found a niche market where discretion is as necessary as a firewall.

Not all business owners are quite as sensitive about their privacy as Hollywood’s A-list. However, at least to some degree, reliable service is essential. It just depends on how much or what kind of service you need. The answer to that question should determine which buying channel to use when shopping for computer hardware.

“Whoever or whatever you choose, you need to develop trusted sources,” says Steve Rucinski, an Ohio-based 30-year management veteran and producer of the popular business blog, Small Business CEO.

There are roughly four shopping channels to choose from. Here’s a look at the upside and downside of each.

Buying online

  • Advantages: It’s probably the best way to comparison shop and track down the best deals. Most of the websites have some sort of customer review component nowadays, which can be helpful. Regardless, computer shopping sites typically have an exhaustive amount of product information.
  • Disadvantages: While there’s no shortage of buying information, there’s also no guarantee it’s credible either. Those five-star customer reviews may have been written by the marketing department of the product manufacturer, for all you know. Returns can be trickier than other shopping channels, as well.

Buying direct-from-manufacturer

  • Advantages: Pricing can be very competitive because there’s no expense of a middle man getting his cut or stocking a retail outlet. And, because the unit is built to your specifications, there’s no paying for features or upgrades you don’t need. “It’s a terrific way to get good prices and choose the exact equipment you want. Frankly, this is how we shop for probably 75 percent of our clients,” says David Robertson, president of Covenant Technology, an IT consulting group that works primarily with small to midsize businesses in its home town of Houston, Texas.
  • Disadvantages: The sales people are good at highlighting what their products can do and listing its features, but not as good at advising you about your system and how one component integrate with the other.

Using a VAR or systems integrator

  • Advantages: There is a difference between the two. A VAR is a company that bundles in additional features and functions to an existing product and then resells it to their customers. VARs offer more expertise in helping customers assess their needs, pointing them to the right technologies and advising them on integration with existing systems. A systems integrator doesn’t sell the gear, but can help you target the gear you need, where to buy it for the best price and help you get it installed and in use.
  • Disadvantages: Expertise costs money and the price is going to be built into the cost of the gear being bought. This is definitely not the route to finding the cheapest deal. For tech-savvy business owners who know exactly what they need, this is probably not the way to go.

Shopping retail

  • Advantages: For the business person who knows exactly what he or she needs, if the price is right then why not? Shopping in a brick-and-mortar store the old-fashioned way has the added advantage of giving that business owner the chance to touch the merchandise first. If tangibly touching the computer first, before you buy it, is important to you then retail makes sense,” says Rucinski.
  • Disadvantages: The sales staff on the floor is notoriously uneducated about the gear and it’s not just the hired help that is unsophisticated. Retail stores tend to stock the lower-end models of computer hardware because they are more competitively priced for consumers.


Deciding factors

Business owners looking to upgrade their computer hardware should answer the following questions before making any moves.

  • Why is this product good for the business? Remember you are shopping for a solution to improve company workflow and not the other way around. “Don’t fall in love with the technology. They’re like shiny toys and it’s easy to lose sight whether they actually do anything for the business,” says Rucinski. It’s a big mistake to get taken in by the hype of a new piece of technology, buy it and then try to find a way to make it useful back at the office.
  • Is there enough information to make a decision? If not, what information is missing: a better understanding of the technology, what functionalities are relevant to the business and which ones aren’t, what’s a reasonable price to pay, and how will it get serviced?
  • Who can be trusted to advise buying decisions? Almost like a mantra, Rucinski can’t emphasize enough, “Trust the source. With all of these places to go, make trust a conscious effort, a priority,” says Rucinski.
  • Can the business afford to pay a little more to get it? Can the business afford not to? That may be a better way to phrase the question. Remember, computers are tools and for almost all businesses today they are mission critical to daily operations. If they aren’t useful, then even at a bargain price they aren’t a bargain.

Conclusion

You get what you pay for. For tech-savvy business owners who know exactly what they need, including make, model, and specifications, then price is likely the only factor to consider. In that case, buying direct, bargain shopping online or through the sales circulars of a local retail outlet is the best bet.

However for the business without the in-house knowledge to make informed purchasing decisions, factor in the cost of educated and trusted expertise and expect to pay a little more. In that case, hiring a systems integrator to make purchasing decisions or going to a VAR is going to serve the company best.

Sidebar: Buying Mistakes to Avoid

Robertson, of Covenant Technology, sees companies taking the same missteps in making their technology purchases again and again. Here are some of the classics:

  • Impulse purchases: “They need a printer and see one while they’re out shopping for something else like office supplies. It’s a good price. But then they get back to the office and find out it’s not network-able. Or it’s a PC and it doesn’t have enough power to run all their software,” says Robertson.
  • Not checking terms of service: Robertson says this is a big one. Business owners think they’re ahead of the game. They’ve researched the gear and targeted their needs, but nothing’s a sure thing. What’s the return policy, and under what circumstances?
  • The attempt to solve a problem opens a can of worms. “They buy ‘part b’ to address a specific need and then realize it won’t work without ‘part a’ and ‘part c’, says Robertson. This is a recipe to back into a major upgrade over committing dollars the business isn’t prepared to spend or, worse yet, create an integration nightmare that costs downtime and resources to untangle.
  • Looks great, but how does it work? The best piece of technology is only as good as its implementation. “For example, they buy a firewall that requires a fair amount of knowledge to install, but they don’t have the in-house expertise to do it. So the firewall sits in a box at someone’s desk, instead of on the network where it belongs,” says Robertson.
Last updated: Nov 1, 2007




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