Review my business idea?

[TX_Eagle]

I could really use any feedback or constructive criticism, so feel free to provide it.

I am currently a student (16), and I am thinking of creating a small business. I am thinking of building custom built computers, and selling them; I have done research about this (in fact, this is what led me to this site), and I understand that the industry may have difficulties, but I feel that I could make it successful.

Okay, I have thought of many aspects of the business, but perhaps you guys will help me to consider even more, and that will be great.

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I hold a part-time job, that I can do while maintaining good grades in school, and thus that provides me with a steady income. I am thinking of saving around $5,000-$7,000 startup capital for this business; that may seem low, but read on.

I am thinking of creating a website that features my products, and marketing this website via MySpace and Facebook ads, Youtube promoted videos, AdSense, and other affordable and useful advertising techniques. The website would need to feature credit card/PayPal processing (any ideas?); aside from that, the website would feature the products, and the usual.

The sales would be both online and I could also sell locally; here are a few questions: how would I best be able to manage a large amount of orders? What organizational tips do you have? How difficult is it to manage a customer base? What could I use for shipping? I am not expecting too many customers, but I am worried about receiving too many orders to manage and keep track of, and I was wondering about any shipping providers that provide for exactly this sort of thing.


Unfortunately, as I am unable to find a wholesaler or direct seller for the parts, I am going to be using NewEgg. I will still be able to build decent systems and sell them for low margins; for instance, I could build a Q9550, 9800GT, 4GB, 500GB, 750W system for about $900, and if I sold such a system for $975, that is still leaps and bounds less than established companies sell for today.

I am thinking of creating preset builds, and then those will be featured on the site; I would only order from NewEgg after receiving an order, and therefore I would need to take into account the wait time from NewEgg, building it, and then reshipping it. Builds can go from home use (I can get builds as low as $250-300), to media PC's to low to high end gaming PC's.

I have experience in web design, though nonetheless is it best to hire a designer? And what of hosting, and the like? And legal issues?

Any advice?
Thanks

[ikjosh]

Good to see a fellow Texan

First thing I always tell people is consider the following which I've outlined in this post - How do I know if my business idea is viable?

Those are important questions that need to be considered and answered

Here is the problem - You're selling a commodity. And the margins don't work for me, just too low. I also hate the idea of wasting your money on ads - you'll get terrible ROI. If I were you, I'd start small - Put up your site, you don't even have to sell anything on it yet - and start building computers locally and networking, building them for friends, family, etc. Come up with a Unique Selling Proposition (USP) or value proposition. You don't have to be the cheapest. Build a quality computer - and where you can make your money is through support. Sell a warranty with the computer. Doesn't have to be on all the parts, but it could just be technical support, you'd have to figure that one out, but if you charged $300 (I make the number up) for 1 year or 2 years of technical support, and you sell 5 of them a month, that's $1,500 in pure profit (figure the cost of your time to tend to technical support, but it likely won't be much if you properly educate the customer or they're already somewhat computer savvy)

Once you've built up a steady stream of sales, and have capital, you can expand the website and sell - Sell your custom built, kick ass computers - Put your pre-built specs, or let them build, then you can order the parts (find out how you can get wholesale) and build the computer - I'd be willing to wait 10 days to get my computer if I knew it was a custom built machine.

As far as billing, shipping and keeping track of your orders, you can use something like Quickbooks, or even Freshbooks.com (intuit has a nice free one too) - when you step up to the shopping cart it has those things built in.

Don't put the cart before the horse. Start small, save your money, think strategically about how you're going to get one customer, five customers, ten customers, and so on. Think from the bottom up

Hopefully I've given you some things to think about and chew on, let me know how I can help

-J