Computer Parts Warranties

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Starting a Computer Business

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Grey Areas (Topics Include)

I vs. We
Compulsive Confession
Software Piracy and OEM structures
Deposits for Custom Work and Restocking Fees
Warranty Parts Exchange
Warranty Pass Through
Office Politics

Warranty Parts Exchange (Book Excerpt)

Warning: These pages are not intended as professional advice. They are presented "as is", reader beware!

Just about everybody offers a one year warranty on parts and service, and any new parts you buy will have a minimum of a one year manufacturer's warranty. The trick is whether you do onsite service or depot service only. For those of you working out of your houses, it probably makes more sense to do onsite service as a habit, and that may be necessary to compete with the Dells and Gateways in any case. Because the turn-around time for failed parts on RMA (Return Merchandise Authorization) can often be measured in weeks or months rather than days, you may have to cover the repair out of pocket. Keeping anybody's machine in your shop for a minute longer than you have to is bad for customer relations and leads to clutter, liability exposure and time management problems. Warranty repair turnaround is normally guaranteed for one business day. In cases like a rare motherboard or top of the line CPU where you can't afford or just don't want to own a duplicate, you should be prepared to offer a "loaner"- a somewhat equivalent machine. This is one of the reasons I encourage the use of a small number of suppliers with whom you build good relationships, because they will cross-ship warranty exchange parts for you. It's also why you should favor suppliers who can ship to you by UPS ground and have the part show up within 24 hours.

The saving grace is that to the best of my flawed understanding, it's legal to do warranty repair with used parts, providing you include the option in your written warranty. Check with your State's Attorney General office. Many major manufacturer warranties refer to repair with "remanufactured" parts in the small print. This means that at first you'll have to buy parts as problems arise, such as video cards, modems, memory. When the failed part you RMA (Return Merchandise Authorization, used as a verb) comes back, it becomes your repair stock. This does not grant an open license to stock up on parts. If you go out and buy one of everything, you'll still own most of it when it's not good for anything. I've been known to cannibalize my office machines for repair parts, restoring the ripped system when the exchange part came through, but it's not a good practice. I've seen cannibalizing go terribly wrong with undisciplined tech managers who sacrifice builds in progress to get noisy customers off their backs, resulting in a downward spiral of scavenged systems. The leading indicator of cannibalism in a PC shop is case shells that have been robbed of their power supply. The practice is common because a cheap case and power supply cost less than a quality boxed power supply by itself. If you must indulge in this practice, at least throw the empty shells in the recycling bin, because you're never going to use them and they make a depressing mess.

There is no secret trick to dealing with the warranty repair issues, especially if you sell custom systems rather than cookie-cutter jobs. If you run a busy business, simply obtaining the RMA and getting the failed parts boxed up and shipped out can seem like an insurmountable task. In most PC shops you can find a variety of the less expensive parts: floppy and CD drives, cheaper adapters and mice that could have been exchanged on RMA, but have been left to rust as a loss. Also, some vendors (primarily importers) play musical chairs with RMAs, sending your bad parts to somebody else and visa-versa, on the theory you probably misdiagnosed the problem to start with. It's way too easy to convince yourself that it's not worth your time and $5 for shipping to exchange a floppy drive for another that might not work anyway, when a new one only costs $10. I used to try to group my RMAs to save on shipping, which worked fine when I ran everything, but when you get other people involved, parts start falling between the cracks. I've seen thousands, if not tens of thousands of dollars in RMA spoilage in loosely run PC companies.

After a year of having successive drafts of the whole book online, I'm following the advice of readers who asked whether I was running a business or a money losing hobby:-) I left the first three chapters posted, as they were the most popular in any case, and single topic excerpts from the others.

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