CBC.ca - Marketplace - OK, let's talk about markup

Getting Gouged by Geeks

OK, let's talk about markup

Thanks for all your comments. As you’ve probably noticed, a few themes are emerging, and we at Marketplace thought it might be interesting to talk about them directly.

Former Tech wrote: "Has Marketplace never heard of a retail markup? I learned that lesson at the tender age of 17 working in a little shop. 'The first rule of retail is to mark everything up 100%.'"

Not a Geek added this: "Expecting every tech for every company to stock (in the vehicle) ram for ANY kind of system is not logical. To keep all of those pieces in the van costs money. DDR, DDR2, SODIMM and different speeds and capacities the number of modules is staggering. It is all very easy to sit in an office and say this should be easy to find. Without a replacement part of suitable speed in stock an accurate diagnosis would be difficult. In fact, the video shows the only techs who solved the problems HAD an appropriate module int stock. Why is it that you can buy a case of soda at a wholesale club for as little as $.15 a can; but the vending machine at work charges $.60? Look at the markup here. Yet nobody complains."

There are many others, and they’re worth reading if you haven’t seen them yet.

This all begs an interesting question: Where’s the line between fair markup and price-gouging? Those of you in the industry: what’s your take? Is there any common ground about where, exactly, the line is?

Thanks again. We’re glad to see the segment caught your interest.

All the best,

Bret

Posted on October 3, 2007
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Comments - Share your thoughts

> Where’s the line between fair markup and price-gouging? That is quite simple to figure it out, isn't it? 1) The market price. 2) Then the consumer psychological price, which basically means whatever the customer is willing to pay. You reporters clearly don't have a clue, as well as the computer experts you hired to validate your hypothesis. The guys who diagnosed motherboard, or any hardware failure weren't that far from the true. The outcomes of any of those problems are very similar, and to identify correctly a deeper analysis is needed (which would take long tedious hours), which is something not very ideal to diagnose in-house. Posted by: Daniel | Oct 5, 07 04:20 PM

Simple answer? Prices for computer parts or service are no more standardised than apples at supermarkets. But I resent the insinuation that geek fees are exorbitant. I could compare our fees to accountants who charge $1000 for a tax return or dentists who charge $130 to brush your teeth. However, I'll relate my own experience: A call like replacing RAM would have run in the order of $250 before parts and taxes. Too high? Well, remember that I have to pay for my association with my organisation. If I were to do three of those calls in one day, which is possible but never happens, I could expect to walk home with just under $300 in my pocket as spending money. Multiply that very good day over an average of 220 working days - although in reality I work fewer than that many days when there are no calls - then I'm making under $66,000 before taxes. I stress that my estimates are *very* generous. Believe me, I didn't get into the business to retire a millionaire. Posted by: A Nerd On Site | Oct 6, 07 09:38 PM

It's interesting how Marketplace portrays technical service like it should be a discounted service compared to other repair services. When was the last time you complained about the plumber charging too much... all you cared about is having everything working again. So how low should techs charge if you're suggesting that they're charging too much - just enough to cover their operating costs? Conveniently, there was no mention of what these are, only your expert's claim that computer labour is "free money" for a company... that would mean his previous employers never incurred any costs and paid him no wage, rented office space for free, and paid zero bills of any sort? Most people care more about having a working computer rather than saving a few dollars on a stick of memory. Remember that the tech has travel time and costs to account for, so if you have lots of free time, go ahead and make a few trips to the local computer parts stores and shop around for the best prices - by the way, have you checked gas prices lately? The point is, you are paying for a service and you are the one deciding not to repair it yourself - either because you don't know how or don't have time to do so. In a perfect world, everyone could clean their own houses, yet maid services are abundant and busier than ever. Posted by: Just Another Tech | Oct 10, 07 05:47 AM

Part 3 Advice to all never buy cheapest you pay for it in the long run. And be careful when checking for fixes online most of the so called fix it sites and programs are actually malware. Look for Certified A+ technicians preferably from a company which is a Microsoft Partner also ask about Microsoft Certifications (there is a certification for every operating system) I am proud of all our techs their integrity , honesty and skill and will stand behind them any day and challenge both Marketplace and the Humber College experts to even come close to the expertise in troubleshooting my techs have. All in all it was a terribly one sided show however every good tech will tell you they hate to see a customer getting ripped off and wish that all the bad techs are dealt with appropriately. Most computer techs will bend over backwards for their customers and usually have the best interest of the customers in mind when they give any recommendations. We work long dragged out hours and are expected to know all about every program, error message and piece of hardware ever invented, then we have to go home at night and read the 900 page book on the latest Microsoft Operating System or Version of Office, Exchange, Sequel Server, Sharepoint etc etc. The reason most of us do it is we just want to help our customers and I hope that anyone who watched this show is not jaded by it. Posted by: James Harding (C.E.G) 24 Hour Geeks | Oct 22, 07 03:10 AM

The next investigation should be the Computer Certification Industry. There are no entry requirements to begin studying for your A+, (or any of the the other certifications, really) except your ability to pay for the materials. To achieve your A+, you pay for the test. Memorize the material in the book, you can pass the exam without ever opening the case of a PC or ever completing a repair of any description, yet you will become a "Certified" A+ computer technician. There are sites on the Internet where a prospective technician can drill practice questions until the answers stick in your memory. During the high tech downturn, a highly skilled Electical Engineer I know was turned down for a job repairing computers because he did not have his A+. A certification you can achieve if your IQ approaches triple digits, you have grade 10 reading skills and $200 to blow trumping a university degree. I'm really not surprised you have trouble finding competent computer repair facilities. Posted by: Rick Spencer | Oct 26, 07 10:35 AM

A few thoughts about this report. It is STANDARD in any field to have a markup of parts. The company has to pay for and inventory the parts, and it is saving you the trouble of running to go pick up a part, provided you would know what part to get. There is a skill set in being able to determine what is the correct part. It is VERY easy to sit back and say part X is only this much on-line, but if you don't know the parts, you CAN'T get the part, nor put it in. Another issue is when dealing with the laptop with the corrupted system files, and the "expert" warns about extra cost to backup the data. NO good tech would work on a system without backing up the users data first because it is the only part that can't be replaced. A clearly biased report. You wanted to find bad techs and you did, but you also found some good ones, just like in any field. The guy that talks about "The Room" should be publicly flogged. A free tip for any company you will deal with, google the company or product along with the word "complaints" and see if other people have had problems with them. All techs are not dishonest, any more than all reporters are dishonest. Posted by: jdclyde | Oct 31, 07 04:08 PM

I want to just focus on the memory pricing. You have received pricing advice from a student that is trained to find the cheapest way of doing things. I could not quite identify the online company he used, but frequently online companies are much cheaper than brick and mortar stores for computer parts. And especially sites likes ncix.com and tigerdirect.ca. These are known discounters in the computer trade. Now assume that you are living outside Toronto or Vancouver and factor in shipping. Or - since the techs brought you the memory, factor shipping in as well. As a rough estimate, the prices from the techs seemed in line with places like Future Shop or similar stores. Memory prices are fluctuating a lot, so you will get huge price differences everywhere. You should also have checked your local stores. As for the tech who only had 1GB modules, well - they can't carry everything with them, and maybe he should have had a smaller ram stick. But it seems that he is a tech, not trained in sales, otherwise he would have explained you the big productivity gain you will get with the larger memory module and you would have thanked him for putting it in and making your life better through it and your computer last a longer time. Or maybe he did and you just didn't want to show it? I always appreciated the information I have received from Marketplace, but it seems that I have to put a stronger filter on the information you broadcast and not just take it at face value any more. Posted by: Mark | Nov 14, 07 07:53 PM

I'm sort of a techie. I don't work for any of these companies, but I could get a job there if I wanted. I have to say that while watching this, I kept saying "that's ridiculous!" with the skewed conclusions. The reporting was clearly about trying to get a scandalous story, rather than inform consumers. Next week they should do a show on reporting! For the first problem, an understandable first impression is that it's either the RAM (which it was), the CPU or the motherboard. The techs who thought it was the hard drive or video card performed poorly there. Without spending more time on it, any of the aforementioned 3 parts could have been the problem. It's only easily diagnosed IF you happen to be carrying a second stick of ram to swap in and see if it works. The "should have cost $25" line is bunk. The part costs 25, the labour should cost a reasonable amount for the time, and operating costs for the business on top of that. Oh and listening to the computer isn't a silly sign of an idiot at work. Failing hard drives make noise. Fans on their last legs make noise. Motherboards beep in patterns to tell you what is wrong with the system. I have called these places to see how much they charge, and for the most part it is pretty expensive. I think they do overcharge although a healthy markup is required to pay for those cars, the advertising, wages, etc. Some good journalism would be to investigate the profit margin. Posted by: Mason | Nov 21, 07 04:56 PM

This program goes to show that it's mostly smoke and mirrors in the computer repair world. Unfortunately, most of the companies providing service will hire anybody that can stand up, talk, and drive a car. Everything else is optional. You don't have to be a verified technician to be a so-called computer repair person. Just alive! What needs to happen, is a new system with verified and properly trained techs who know their stuff. I was a tech in the aerospace field for many years, and as such, was required to be able to perform work which was regularly scrutinized. Because these items were going into aeroplanes, everything had to be done properly, no guess work. The computer repair industry needs to develop a similar system. I smell a business opportunity here. "Truth" in the computer repair business, would in fact go a long way to providing a company with a lot of customer loyalty and a long term relationship with those same customers. I am sure, people are prepared to pay for good honest service at a fair price! Posted by: Mike Marchand | Nov 21, 07 09:16 PM

There is markup in every type of business. My car broke down and I had it towed to a dealer. When I got the bill I complained about how much the tow to the dealer cost. I later found out that the bill was approx. $100 but the towing company discounted it to $80 and charged it to the dealer. The dealer added $30 to to the original price and charged me $130 although they only paid $80. Wow pretty amazing that I paid $50 for the dealer to call me a tow truck. This goes on in every industry, some just more than others. Posted by: Frank G. | Dec 12, 07 10:56 PM

Its so interesting that the computer is the only product that people think should be inexpensive to fix and the parts should be super cheap. The computer is like any other piece of equipment you own. How much would your car mechanic be if he came to your home to fix your car? It costs about 150.00 for someone to declog your drain yet nobody complains about that. If you go out and purchase your own parts and fix your washing machine by yourself its costs very little. You pay a big premium for someone to come to your home to do it for you. The computer isn't any different some other device in your house. Computer ram brought to your house and installed for you should cost more than buying it online and doing it yourself. Posted by: Chris G | Jan 31, 08 10:31 AM

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