More than ever before people are coming into my shop and inquiring about my business. No matter if they’re customers or other local business owners, lately it seems like people have become really curious about how my business is operating in this economy. The business of technology is not all that different than other businesses because we all have to adapt.
When someone walks into my shop there is no question that a portion of my business is at the lowest spot on the technology totem pole. My little operation is primarily responsible for maintaining PC’s used at home and in business. Among the commotion of computers being repaired, there are piles of old parts strewn about. There is no question the type of business I’m in.
Why is it important that I explain my little shop? Because my business model isn’t too much different than other repair businesses. I am affected by just about everything that other businesses fitting my model are – including price changes of replacement equipment. One key difference though is I’ve had to change my business model frequently to adapt to the changes with technology.
Computer companies like Dell and HP have lowered their prices significantly to adapt to the current economic conditions. Computer companies try and predict how the future economy looks and manufacture equipment accordingly. If there’s a significant reduction in sales then they drop prices in hopes of liquidating their inventory. Unfortunately this is the current state right now.
The “bang for the buck” factor has gone up significantly in the last year. In other words, the amount of relative technology someone can buy for the same money has increased substantially. If you’ve ever taken an economics class then you can appreciate the laws of supply and demand. Inventory that’s left over at the end of the sales cycle becomes unusable and either gets destroyed or recycled. Generally, old technology is never left on the shelves next to current products.
As the price of new equipment drops, the demand for used equipment becomes significantly less. A full featured, full sized laptop can be purchased for under $400.00. A used machine with the same or similar features may sell for $300.00. Looking at the $100.00 difference may sway some people towards a used machine until they realize the extra hundred dollars buys a new computer with a full factory warranty.
At the same time prices are coming down, technology is changing as well. I used to inventory a fair amount of older style hard drives. Because new computer prices have dropped so much, people are more likely to purchase new when a major repair is needed. Some customers believed it was better to repair their ten year old computer. Price reductions have swayed some of these customers to buy new equipment.
With the reduction in prices we’ve also seen a reduction in overall quality from major manufacturers. Without naming companies, there are certain computers that have gone downhill over the past six months. One company has reduced the thickness of plastic to almost half on their line of laptops. Because of this we’ve seen an increase in repairs due to the thinner shell.
As a business owner I appreciate the reduced inventory the economy has created for me. I am happy I no longer have to keep four different types of hard drives, five different types of memory and all the other stuff that span generations of technology. Overall, though, I have not noticed much change in sales. As I stated earlier, those nursing an older computer become swayed by new computer prices and end up going that route. Like any other business that refuses to adapt to external change, the computer repair business must do the same.
(Jeromy Patriquin is the President of Laptop & Computer Repair, Inc. located at 509 Main St. in Gardner. You can text him at (978) 413-2840 or call him directly at (978) 919-8059.)