How I Sell Hardware

Old 5 Comments on How I Sell Hardware 12

Selling hardware can be painful.

When I first got started selling hardware I did what most normal IT consultants did, I got my sales tax number, set up my accounting suite to count sales tax, and started filling out vendor agreement forms. I signed up with Lenovo and NewEgg, they both have great partner programs, and I already used them in my personal life. I actually got set up with NewEgg in about an hour, I’m still waiting to hear back from Lenovo (4 years later).

My sales process was straight forward on new projects, I would scope the project, submit my proposals, and then ask for a hardware deposit. Now I have to account for that hardware deposit, so, sales orders, purchase orders, bills, extra invoices, Yuck. After the books are handled then I’d go out to NewEgg actually purchase the products and return to the client with an expected arrival date. When the products arrive, I would complete the job and mark them up on the invoice (my clients generally would tolerate no more than 5% ).

Time For A Change.

I would do all of this extra accounting, management, and assume the risk for the products for 5% markup. On an average office desktop ($300) I made $15. That number is not sustainable, the work vs profit is just not there for me and I would assume that most other consultants are seeing this too. I did this for about a year and then I just outright stopped selling hardware, the overhead was too much for me to really care about. Anytime a client would need hardware I would just stand over their shoulder and have them pick out what they need, they buy it, they ship it, I install it. As a technician that makes enough sense and is a pretty reasonable arrangement, as a businessman it started to hurt my feelings, I mean every time I would “consult” on a product it was basically money flying out the window, there had to be a better way!

Amazon Affiliation.

My new strategy is to resell through Amazon affiliate links. It’s a very simple, mostly hands off process. You sign up for the account and it gives you an interface to pick items. Once the item is picked you provide the link to your client, if your client uses that link to purchase the product you get between 4% and 6% depending on how you rank with the affiliate program. Amazon handles the transaction and shipping, the actual seller handles the taxes and markup, all you do is collect commission. This opens up a number of options for monetization, you can now sell anything that is on amazon. What this means for my business is that if someone wants a computer lab, I can sell them the desks, chairs, floor mats, computers, monitors, cabling, and then charge them to install it all. It means that I can freely offer anything that new client is interested in and at a very small overhead for my company. It positions me to be a more complete solution provider instead of just the geek. Perhaps even more interestingly you can make custom “a-stores” for each of your clients if they have recurring purchases (Paper, office supplies, whatever) and you can also embed your own “a-store” into your website and sell directly from your .com! The a-stores are completely customizable and have a “powered by Amazon” branding which I think adds some validity to your online brand.

To me the Amazon Affiliate program is a game changer, the commissions are a little smaller than what you could get if you could sell products on a scale that Amazon does, (but you can’t) and you are limited to only things that are listed on Amazon.com (Is that really a limit?)

What do you think?

Have you had a similar reseller experience to what I have? Do you use a different service other than Amazon Affiliates? Let me know in the comments I would love to hear your input!

Author

Jimmy Simpson III

I work small and micro businesses (between 1 and 75 users). I offer WordPress Development, Virtual IT Director Services, System Administration and Web Hosting.

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5 Comments

  1. Phil Tower March 5, 2014 at 3:26 pm

    How do you make sure that they click the link?

    • Jimmy Simpson III March 6, 2014 at 1:50 pm

      Great question! So on http://affiliate-program.amazon.com it actually gives you link level analytics, so you can see how many clicks and the general area that the link was clicked from (barring things like incognito mode). Confirmation usually dosn’t come up for me though, generally clients will buy direct from the link you send them, because they’re afraid to get the wrong item otherwise.

    • Jerin Saji March 6, 2014 at 10:36 pm

      I’d imagine he just emails them with the lists to buy. If you were a client and a consultant just emailed you a bunch of stuff for you to buy, you’d naturally just click the link instead of going on google and using other sources.
      Or maybe after he visits them and buys it for them by clicking for them..
      Just as thoughts, this is a brilliant idea! It is a nice way cover up your part of the costs for researching the hardware and buying them. Will use it if I ever become a consultant!

  2. Brian Pacheco March 9, 2014 at 3:52 pm

    I’m not a consultant but I’m looking to get into the tech start-up business. My ultimate goal in life was to start a computer repair business so I can take my hobby and turn it into my job. However, I’ve realized that’s not really lucrative to do that anymore because most consumers throw away their computers rather than get them fixed. Most average consumers just want a laptop or desktop computer to do word processing and internet surfing so they don’t mind popping $300 bucks on a new machine at Best Buy. It’s also very competitive from where I live with new people wanting to get in on the action seemingly every day.

    As a result, I might go with the above suggestion in the future if I decided to pursue the consulting route.

    Great article.

  3. Sagar Kumar March 17, 2014 at 1:50 pm

    Hi Jimmy,
    I can really connect with you, a year back I started my IT consultancy with my friend. Initially we wanted to be a purely service based company, as in service you only put your skills and no investment required and 100% profit too. But as we started marketing our services by going to companies we were only getting new hardware purchase orders. We only got one client who wanted AMC from us. So we started selling Laptops, Desktops and other peripherals. Getting quotations from vendors were quite tough initially and nobody was ready to give us products on credit. Also clients have become very aware of the prices too from online shopping websites. So fixing price for the clients were also very tough. We had a 10% margin on products. As time passed we realized there is not much scope in selling hardware unless you have big money and own a showroom.
    Your idea of affiliate program with Amazon is new to me. I’ve never heard of it.
    Thinking of giving it a try.
    Thanks, for sharing your story. It feels good to know that there are other people in the world who are doing the same thing and hitting the same roadblocks.

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