5 Reasons Why Small Businesses Shouldn't Buy Retail

Every so often, a client will want to buy a new microcomputer. "Look at this great deal!", they'll say, and show me an ad for a discounted computer system. I always shake my head. "This isn't the best deal," I'd say, "In fact, it's not what you need, and it'll hurt you in the long run." Here's why.

1. Software Licenses.

When buying retail, you're usually buying devices that're being sold to end-consumers and not businesses. So the software licensing for the operating system or productivity applications may not be compatible with what you've got going on in your office. A Microsoft Windows Home product, for example, can't interact with a Windows Server; it's not the Professional licensing needed for that. 

2. Warranties.

Usually, when buying something at a discount or off-the-shelf, they're shipping with limited OEM (manufacturer) warranties and a stronger warranty may be available from the retailer as a premium up-charge. So instead of a year's worth of OEM warranty that you may get from a business machine, you may end up with 90 days worth of OEM warranty. If something breaks outside of a quarter, your investment is out the window. Small businesses need reliable machines that they can just swap out and replace if they break within a 12 month period, and that kind of warranty isn't available from a retailer.

3. Lower-End Specs. 

When you're buying retail, you're buying the lowest common denominator: a generalist machine that'll fit most consumer budgets. It doesn't have high-quality parts or components (in fact, they'll have the cheapest components available to the OEM), and the machine won't be optimized for specific purposes; example, lots of RAM for databases, or a solid state drive for faster I/O, or, the graphics card won't be sufficient for CAD, a lower-end processor to meet a lower price-point, etc. Remember: you're buying a low-end machine meant for an end consumer at a discount so somebody can clear their inventory; they're willing to break-even or even suffer a loss to move the inventory off of their shelves. Why would you want a machine like that?

4. Crap Software.

When you buy a machine retail, you're buying something that will be given to you with a bunch of dumb software you won't use or don't need. That's because these software companies pay the OEM for a ride on the hard drive to meet new consumers, and potentially engage them in new business. These applications run in the background and sap RAM, processor, and disk I/O, slowing down the machine - or potentially exposing the user to malware, like what recently happened to HP -  and you have to spend time uninstalling them. Why buy a product that you have to expend your labor to uninstall stuff you don't need?

5. Useful Life.

Because of these issues - low-end specs, limited warranties, wrong licenses - the useful life of a retail machine is much smaller than a business machine purchased through business channels. Maybe the small business could get 18-24 months out of a machine purchased retail, instead of 60 months out of a quality business machine.

Like many things in life, it's caveat emptor, and, you get what you paid for. If you're willing to pay for a discounted machine at bargain-basement prices, you're not going to get a lot of utility out of it, or, you're going to have to invest more to make it useful.

Instead, small businesses should plan for capital asset expenses just like larger businesses, and make such purchases through established business channels to obtain volume discounts, correct software licensing, staged with the best components at the highest warranty, running only the software you need to operate your business.