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THE CUTTING EDGE | SMALL OFFICE / HOME OFFICE

Mail Order May Have Its Drawbacks, but It Also Has Plenty of Fans

Buying: Sometimes the best prices on hardware and software aren't found in the stores.

June 24, 1996|JENNIFER OLDHAM | TIMES STAFF WRITER

Ronald Graske hoped to turn his passion for composing music on a computer into a second career, but he quickly realized that his borrowed 386-based PC wasn't up to the task. So the 62-year-old retired Rockwell engineer set out to find a new machine, and after shopping around at retail stores and attending PC user group meetings, he finally opted to buy over the phone.

"Even though my friends recommended I buy locally in case I had problems, I chose [mail-order vendor] Dell because their pricing was competitive and they had a good reputation for follow-up," Graske said.

In spite of some obvious drawbacks, buying technology products by mail order has become popular with many small- and home-based businesses. Shopping by phone requires more expertise--you can't touch and feel the goods in advance--but it can also be far more convenient, and cheaper, than regular retail stores.

About 45% of respondents to a 1995 study by Home Office Computing magazine said they had purchased some form of computer hardware through the mail in the last 12 months.

"The group most likely to use direct mail are home businesses because of their income sensitivity," said Thomas Miller, group vice president for FIND/SVP, a New York-based research firm.

The mail-order industry--which includes everything from large direct-sales companies such as Dell and Gateway 2000 to catalog companies such as PC Connection to mom-and-pop shops that build their own PCs--generally offers prices about 10% to 15% below regular retail.

Mail order also eliminates the need for the overwhelmed business owner to spend a few hours at a computer store.

"Most of these people are very busy. They are trying to do a thousand things at once, like getting telephones and copy machines installed," said Maxwell Scroge, a mail-order catalog consultant. "The beauty of mail order is they can do it quickly over the phone."

Ordering a computer by phone also allows consumers to build a system that precisely meets their needs. Off-the-shelf PCs often include a lot of software and peripherals that are of little use to a business.

"Some 70% of the stuff offered on a retail machine may be of no value to a SOHO owner. For example, they will get Microsoft Works, not Microsoft Office," said Richard Zwetchkenbaum, research director at International Data Corp. in Framingham, Mass.

Of course, many home office workers still prefer to buy at a store, especially when it comes to the PC itself. Many professionals, for example, are familiar with computer operation but still have no idea what kind of workstation they need for business.

"Even though this is a savvy industry, being aware of technology and using it to your full advantage are two very different things," said Jennifer Doctor, executive director of SOHO America, a Minneapolis-based trade association. She estimates that 80% of her group's membership owns PCs but that less than 20% of them purchased through mail order.

Many small-business owners, such as Janet Attard, author of "Home Office and Small Business Answer Book," use mail order for peripherals or software because those pieces are lighter, don't rack up high shipping charges and don't require support.

"I'm fortunate to have a discount computer store about 10 miles from where I live and buy desktop and notebook computers from them," Attard said. "I find bringing a computer in when it needs a repair or an upgrade and paying to get it back the same day is more beneficial to me because I avoid downtime, rather than any savings I'd derive from mail order."

Analysts say mail-order companies may eventually be able to reach consumers such as these.

"As people become more experienced and comfortable with technology," Zwetchkenbaum said, "they will buy their second and third computers from direct-sales companies."

Staff writer Jennifer Oldham can be reached at jennifer.oldham@latimes.com

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