Business &
Technology: Sunday, January 07, 1996
Used & Useful -- Old Computers Get A Second
Chance When Price Becomes A Consideration
Hunter Fulghum
Special To The Seattle Times
Carol Reedy bought a computer recently. It wasn't her first.
The Port Orchard woman has been using computers since 1980 for bookkeeping
and desktop publishing, so she knew what she needed - a 486 DX with a sizable
hard drive, large monitor and 8 megabytes of RAM. But what was most noteworthy
about the computer she purchased was its price: $1,200, half of what it cost
new.
Reedy bought a used computer. "Why buy a new one?" she said.
"I don't have a great deal of money, and it is really easy for me to look
at a computer with less than 100 hours of use on it that costs $2,000 less
than it did new."
Linda Tate of Seattle bought her Texas Instruments laptop
about three months ago. It's a 486 SX with a color display and 4MB of RAM.
Like Reedy's computer, Tate's is used and cost about $1,200, a lot less than
it did new. Unlike Reedy, Tate is fairly new to computers and has limited
use for one right now.
"Price was important to me because my life doesn't revolve
around a computer," she said. "I wasn't going to pay a lot for one. If I
could find what I needed and I didn't have to pay a lot, then of course that's
what I'd buy."
That both women were able to find what they needed in a computer
within their budgets suggests that the market for computers has extended
beyond latest and greatest designs on display in the stores. Just as the
number of new personal computers being purchased every year continues to
grow, the number of used or older computers being bought and sold is also
increasing.
No one tracks the size of the used-computer market; unlike
with automobiles, the sale of computers is not registered. But one company
alone, the American Computer Exchange of Atlanta, brokers the sales of more
than 80,000 used computers a year. John Hastings, the company's president,
said his company's volume is but a small fraction of the market, and is doubling
annually.
What is the need?
Like Reedy and Tate, many computer buyers are discovering
that all they need is a basic model they can use to write term papers for
a college course or run a simple accounting program for a home business.
If you're one of the many who finds himself in this situation,
you need to consider two key points before you decide.
The first is practicality vs. overkill. Will the computer
do what you want it to do, or will it do a whole lot more than you need?
Older models of computers may not have all the bells and whistles, but when
they are in good working order, they are far from useless. A 386 machine
that's two generations old is perfectly suited for basic tasks like word
processing and accounting, and can still run earlier versions of many current
programs. It may find good use controlling a home security or sprinkler system,
or as an inexpensive first machine for a child or teenager.
The second point is, of course, cost. There is a huge difference
in price between almost any new computer and a used one. A brand new Pentium
with monitor, CD-ROM and sound - all the bells and whistles - may cost from
as little as $2,000 (sometimes less) to more than $5,000; by contrast, a
good used 486 machine with monitor may cost less than $800. And 386 computers
and older models are less expensive still, often in the range of $200 to $400.
The search is on
Once you've decided to purchase a used machine, the next step
is to find one. Classified ads are obviously one rich field to mine. And,
increasingly, the Internet is becoming a source of buy-and-sell information.
As the market grows, however, more businesses are making used computers their
business.
Take RE PC, in Seattle's industrial
area, just east of the Kingdome. The store is essentially one large well-lighted
room filled with tables holding all sorts of computers, from ancient XTs
to Pentium systems. The stock on display includes not only IBMs, IBM clones,
Apples and Macintoshes, but also a supply of parts, such as cables, floppy
drives and modems.
RE PC's stock varies from day to day,
depending on what items show up at the store. The store has a certain appeal
to the hobbyist and tinkerer, with a set of shelves full of "as-is" hardware
from odds and ends of computer parts to old calculators.
RE PC, which opened about a year and
a half ago, is owned by Steve Hess and Mark Dabek. The two met at a computer
swap meet, which seems an appropriate start considering the nature of their
business. Both men love computers, and RE PC was an opportunity to own a
business in a field that they enjoyed.
One thing RE PC does is find solutions
to unusual problems, a characteristic that speaks to the nature of used computers.
For example, RE PC recently had a shipment of old Compaq portables that are
heavy and have long since been passed up by lighter and less cumbersome laptops.
The computers themselves are still fully functional. An RE PC client, a locksmith,
wanted a way to have access to all the key coding information he needed and
have it in his work vehicles. RE PC modified the Compaqs to be more or less
permanent fixtures in the vans, up to connecting them to the electrical power
source in the vehicles. Now the locksmith has access to the information he
needs while he is away from the shop, and he can update it with the flip
of a disk.
Another reseller in the area is Vetco, which bills itself
as "the wrecking yard of computers." The slogan is appropriate if you liken
it to an auto junk yard. The Bellevue company not only sells working computers
(usually 386s and better), but it also maintains a good selection of used
parts, some of which have been stripped and salvaged from computers not worth
selling as complete units.
"I get a lot of calls from people who don't want to put them
(old computers) in landfills," said Gary Shearer, Vetco's manaager. "We will
take a system, and if it isn't worth selling as a unit, we'll part out the
good stuff and recycle the rest."
Parts get used
That seems to be a common feeling in the used computer business.
Business owners and staffs recognize that if an old computer isn't reused
or recycled, it ends up in the trash. To help minimize this, they run "green"
shops, salvaging parts of computers that aren't purchased.
Where RE PC and Vetco provide local sources, a few companies,
including American Computer Exchange, (800) 786-0717, can help you on a national
basis. For a $25 listing fee, which is credited toward the company's commission
on a sale, American Computer will list a used computer and an asking price
in its database. Then it will match buyers who call the service with the available
systems. The buyer and seller negotiate a price through American Computer,
which assures each party anonymity. After agreeing on a price, the seller
ships the computer to American Computer, which checks to ensure that it works
(although it makes no warranty on the system). The buyer's payment is held
in an escrow account while the buyer checks out the computer over a two-day
period. Only after the buyer is satisfied is the seller paid.
For these services, American Computer charges between 10 and
15 percent of the sales price, depending upon the size of the sale. The buyer
and seller handle shipping costs.
After deciding to buy used and finding a source to purchase
it from, there are some other questions you should probably consider.
-- What are you getting? What sort of warranty and support
are available? A used computer is a bit like a used car. You can't be entirely
sure what you're getting.
Resellers recognize this limitation. While they cannot match
a new system warranty, they can minimize the potential for things to go wrong.
Most resellers run some testing on their stock before they sell it, identifying
problems before they happen. Some offer a guarantee on the computer. RE PC
typically offers warranties of seven days, but in some cases as long as 90
days.
The best rule of thumb is to check out the used computer thoroughly
and get a warranty in writing if you can. You should assume that some things
may go wrong, and be prepared to have the system serviced. Even if some repairs
are needed, when you consider the cost of a new machine, buying a used computer
and budgeting for some work is still an attractive way to go.
-- What software is available and where? You probably don't
need to worry about this if you're buying a used 486 or Pentium. But this
may be the biggest concern if you buy an XT, 286 or 386. What good is an
old computer if you can't find software to run on it?
You probably won't be able to walk into Egghead or Computer
City and find an early version of MS-DOS. Some resellers carry a limited
stock of software or they include licensed versions of some programs.
Some specialty retailers, including Half Price Books and Software,
often have sizable selections. Shareware outlets also have inexpensive programs
that will operate on older PCs, Apples and Macs.
Other places to look include mail order companies and computer
bulletin boards.
-- How much should you spend? How much should you sell your
computer for? Like buying a used car, putting a price on a used computer
can be difficult. American Computer issues a weekly index of used computer
prices that reflects 20 to 40 types of systems. Classified ads can also give
you a sense of price levels.
It should be noted that used computers aren't for everyone.
Some of the newer software on the market, for one thing, just won't run on
an old machine.
But if your needs of a computer are limited, and if price
is a concern, then a used computer may be exactly the right solution. And
beyond that, buying a used system is a form of recycling, keeping a 30 pound
hunk of plastic and metal out of a landfill.
And that, ultimately, is of benefit to all.
Copyright (c) 1996 Seattle Times Company, All Rights Reserved.
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