 While I was on my way in to work today, I noticed yet another computer store bit the dust and They were just down the street from us. They've been in business for 20-something years. They did go through a name change and a move of years ago But it brings me to the point that I wanted to bring up today was What does the retail market look like and that's what they were focused on was the retail market now We've always done both we started out in 2003 only doing businesses And then I moved my company into doing retail starting in 2000 late 2004 I had bought another electronic store and we integrated computer repair into an existing electronic store Which eventually fell apart and the market moved we did a lot of TV repairs and things like that And as the market changes and moves you really have to move with it So that brings us all the way here till 2019 happy 2019 because it's only the second day in here And I'm doing this video but it that computer store went out of business just they cleaned everything out It's gone gone signs off the building everything else. Maybe the building got purchased. I'm not really sure but the question I see come up a lot is is retail dead and It kind of is especially in our market But I'm not gonna say it's like that in every market because I have friends in other areas They're doing really really well now There's a few factors before you open up or even consider doing retail computer repair one of them is the market demographics and The market we're in here in what we refer to as the down river area, which is just south of Detroit The median income average is not very high compared to north of Detroit, which is like what we refer to as Oakland County area In matter of fact I want to say it's close to double when you go there to a median income average and that leads you to the type of Customers that you're gonna get and what we're really is seen here in the down river area And it's not like we didn't used to do really well with computers on the retail side Matter of fact, we were selling them like mad like it was great when the sales were good years ago back around 2008 2009 It was typical to us taken like you know Sometimes 20 computers in a single week easily plus all the sales of computers and everything else But over the last few years, we've watched that not just decline We watched it tank and it's not that we're doing anything different You know business sales are up every year after year consistently We keep expanding that side of business but when it comes to retail, it seems like nothing's really working But a lot of it comes down to the clientele and the demographic We're watching the retail market shift very quickly to just using Chromebooks using Tablets were hot for a while. There are more people just using your phones And it's interesting because they just kind of once they can do whatever they need to accomplish pay bills online Some basic shopping with the Amazon app Etc. Etc. They move to that as the platform and I don't blame them the computer experience that was given to most people And I'm gonna hold Microsoft a little bit accountable here for this. Yeah, we put a desktop on everybody's You know in everybody's house We got all these computers, but the other side of it was the computer experience for them was viruses scams Junk Which was good for our business because we spent a lot of time selling you antiviruses and selling you that now They're like I got a tablet and I haven't had a problem since or I got a Chromebook And my problems just went away because there's nothing to really load on occasional toolbar and they hit the reset button And they can do that themselves and the hardware itself, you know hardware repairs were really big And this is the same thing that happened with my electronic store I knew when it was time to get out of that business because Walmart got into the TV business I went from making lots of money on TV repairs and we were doing really really well And then once TV prices got really below a thousand dollars No one really wanted their big boxy if you remember those Projection screen TVs fixed and that was good money repairing them Then we started fixing some of the LCD screens But then the parts became less and less available and we jumped out of that business. Well the same thing with the retail We're not jumping out of it and at no time I over really leave a business as one there's no money to be made such as TV repair We found the margin to be so low now There's also the phone repair aspect But there's about a dozen phone companies around here that are doing that part of the business And most of them are relying on upsells after the fact, you know If you go to like you break I fix things like that low margin on the repair But they talk you into warranty sales and things like that even Best Buy low margin on a product They spend time doing a song and dance about how you need a warranty on any product you buy from them And I've seen retail computer places get into the warranty game the financing game You know make payments on it and those are ways you can make money in a retail market, but from strictly Focus on the service aspect is which we do. I didn't want to get into those markets So because of that and because of the demographic around us retail in our area is just gone to nothing We're getting a couple computers a week and a majority of those computers that come in are ones that are Windows 7 Windows XP still and there are people who want their data off of them to get it to whatever cloud account They're using now for their Chromebook upload things at Google Photos Backups so they have an archive of that old data so they can recycle it, you know And it's just one of those things so if you were thinking about starting a computer store you really have to understand the market in the area you're in and At some point people have gotten sick of being sold antiviruses and I don't blame them I mean the businesses are a little bit more understanding with the MSP aspect and things like that paying a monthly recurring charge For a result like to keep systems safe and keep things maintained But the retail market they go I want to get on Facebook and you want to sell me an antivirus so I can use this brand new thing I got it's a harder concept for a lot of them Especially in the lower income ranges or the less educated like this college educated people who generally under day job Don't use a computer so you're working class Not an office people and trust me I know a lot of them because down river is a heavy on the manufacturing side I have a lot of friends working manufacturing and they don't ever they don't have a computer at home And they don't want one. They have no desire. They just use their phone to do the things you need to get done So what I'm kind of getting at is if you ask this question You have to like break it down to the demographics break it down to what market swing in and the business question Oh, he's is is that a market you want to be in is that a market? You think there's profit in and what's the competition? There were so many computer stores around here and this conversation came up the other day after I recorded the podcast because Both myself and other co-hosts on a podcast We've worked for computer stores going all the way back to my first computer store work for was 1994 So I've been working in the retail side of the market for a long time and in the business side of the market but I we've seen such a shift in it and You know, there's still money to be made in selling some of the product more about recommendations But this is what pushed us to quit even selling laptops in 2018, which were our big seller We just said while the margins gone down to nothing on this. We're just kind of shuffling money You know, so no never get impressed when the company brags that they did three four or five ten million dollars in sales Which you really as a business owner think about as the margin on it Can you make margin at that because if you can't make margin and at some point You're just shuffling money back and forth hoping to make a couple percent and you got to decide if that's really worth it We've always focused on the service side of it Which is profitable because you're trading knowledge and skill you have To perform a service on there. We've never hid that aspect of it and that's still where we have a lot of growth We have a lot of businesses that Order their computers off of Amazon and then the business owners like I want them from home They just order off Amazon and we'll help them with the transfer now I only make money on the transfer part of it And I didn't have to deal with the warranty and everything else and people who are deal hunting It's hard to offer when you're a small business like us the best deals on laptops Every time I see you someone do that I'm like you're just racing a zero margin with Best Buy Amazon and any other online retailer prices aren't a secret you can buy direct from many Companies you can buy sales off of Amazon all the time a matter of fact Myself I bought a laptop for my wife who works for quick and loans the largest You know loan broker in America She's a mortgage broker and the reason I bring that up is she works from home on a Chromebook They use everything desktop as a service Where's the sale someone like her? So here's someone who does have a business use case for it and I got it the best deal I found was a hundred dollars less than Amazon was buying a Chromebook from Best Buy for for so she could work from home on it Yeah, so the market has shifted a lot. You have to shift with it So if you were considering opening up a retail store in 2019, I don't know unless you have a really good angle I don't know that it would be the best idea. That's my opinion of it That's my opinion based on this. I have some friends that are doing well with it and are doing a lot of upsells and antivirus I don't know how long that curve will last but it's something to consider. How long can people keep paying for it? Now if you're in a much wealthier area, yeah, they think what what's another 50 bucks a month to you for antivirus If someone's making $200,000 a year when immediate income averages only about $40,000 a year down here They start looking at it going why don't really have 50 extra dollars 20 extra dollars a month or even a hundred dollars a year to renew Those antivirus descriptions. I'll just use a Chromebook instead and that's more of what we're seeing in our market So those are just considerations on there. I just want people to think about it The question has been emailed to me a couple times I see it discussed in different forums about that and we're not closing our retail store We just don't push it anymore and as long as people are coming in and bringing things into us We will it's also very convenient for many of the businesses because we market to the business owners In their staff if they need any computer help just bring it by our office So it's nice having that aspect of it and having it but I'm standing in the entirety of our retail area And it's not a very big section. We have very small amount about This camera is wide, but I'm like I got 20 feet by 18 feet anything is just for them It's not very big. That's the entirety of retail and we don't even sell any Computers we just sell, you know, lots of cables and doodads that people do ask for and stop in and pick up because we're in a Restrict mall and people do see the building, but yeah, we've watched retail sales go from like, you know, 15 20 computers a week to Like next to nothing. Well, just a couple computers coming in a week So it isn't it isn't what it used to be and people are more willing if they've got it in cloud Just to erase it and forget it and go with the Chromebook So hopefully this offered a little bit of insight This my thoughts on the computer retail industry as it stands based on the knowledge I have of working in it for over. Oh wow, it's been like 20 years, hasn't it? That's a long time. All right I'm gonna quit babbling and share your thoughts below or discuss this in a forums because this is something That a lot of people, you know, do you do the retail aspect at all? It's I'm always interesting here insight. Maybe I'm completely wrong I I am always willing to change my position on things just like I've changed positions of what we do and don't do over the years My mind can be changed, but that's how I feel about it right here in January of 2019. 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