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Jeff Stubbers (Technology Consultant Lead)

Why Are Your Computers So Expensive?

Written on May 1, 2015 by Jeff Stubbers
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"Why are your computers so expensive?"

I run into this question from time to time. It is understandable I suppose, since so many computer companies have worked to make their systems cheaper and cheaper to make them more appealing to a number of folks. As one company does this, then another company will attempt to do the same with a slightly lower price than the other in an effort to compete in that market. There are several cost cutting procedures that companies can employ to make their computers cheaper. They can hire folks at lower wages, they can purchase cheaper components, they can outsource their support to the lowest bidder, a company that will charge less for that type of coverage (typically overseas, as labor tends to cost less there). They can mass produce pre-built systems in an effort to cut down time each system costs to produce - Churn and Burn. When you spend less time producing a system, it costs less, as you can produce 2, 3, or more systems in the time it takes to previously build one system.

There certainly is a market for those types of cost savings scenarios. There are several companies in existence that speak to that customer desire. For those customers that need a system with less funds, and would like a computer boutique to build and support the system, this type of scenario at least allows them to get a computer. So yes, there are a lot of systems out there in the $600 range by companies that use this type of business model.

So why doesn't Puget Systems use that model as well? We are bit unique as a company. I suppose you could say we are antithetical to the computer industry as a whole. Our focus is on quality. Our core beliefs are to cut through the hype in the industry, to be as transparent as possible, offer consultation to best meet YOUR specific system needs as an individual, build a quality system and run extensive testing on each system to ensure they are rock solid, then offer a high level of support after you have received the system.

Hype vs. Transparency
You won't see big flashy adds with explosions and characters decked out in military gear on our front page blasting discounts of $200 off!, et cetera. We simply provide you with information about components so that you can choose according to your specific needs, and base our prices off our costs. Also, we list the specific make and model of components we use. In that way you know exactly which motherboard, CPU, RAM, and Hard drive you are choosing, rather than a generic "1TB SSD", or "1TB 7200 RPM hard drive". 

Hardware Industry's Dirty Little Secret
What most won't tell you is that there are many different manufacturers of "the same" component, or of components that look to be the same or similar part, but based on the manufacturer and model, there can be great differences in quality and performance. We focus our product line on only using the highest quality, lowest failure rate components available. Unfortunately, the higher quality, lower failure-rate components tend to cost more.  Other companies who focus on low cost systems will not be choosing those same high quality, low failure-rate versions of those products in their systems, otherwise they would not be able to offer their systems at those rock bottom prices.

Consultation to Meet Your Needs
Where the companies that focus on low cost systems won't be able to offer the same level of system consultation for their systems due to the costs involved, we are available by phone, email, and chat along with our comments on specific components in our specific lineup to provide you with information about our components so that you can be an informed decision maker when configuring your system with us. Additionally, you can contact one of us and we will be happy to assist with a configuration to best suit your needs if all you know about computers is the specific programs you want to run.

Quality Builds
We start off by basing the components we carry on high-quality, low failure rate components. There are extensive product qualifications that each component must go through here before we will offer it in our lineup, then we will continue to monitor those components by tracking failure rates for every component we carry. We have weekly meetings to go over these failure rates, and if we start to see a single component start to have a high failure rate, we'll discontinue carrying that component and replace it with another component with a lower failure rate. - Yes, quality is that important to us! Then our production technicians will professionally assemble and wire your system for best cooling, where companies who churn and burn will be working to simply slap systems together as quickly as possible without the same care and attention to detail.

Extensive Testing
We have an extensive suite of tests that we run every system through to ensure everything is working properly with your system, and that the system has adequate cooling when under full load. Our systems go through a 104 point (and growing) quality control checklist to ensure that you get a rock solid system to last you for years. We are constantly looking for ways to improve our process.

High Level of Support
We have employees whom are enthusiasts about the product we create, care deeply about quality, each other, and the customer! We are not building systems just to get the next one out the door. We are building a system specifically designed for your individual needs. Each of our sales consultants take great care in assisting you get the system to best meet your needs by choosing the components that will provide you the best performance for how you individually plan to use the system, then our Production technicians are constantly looking for way to improve the process when professionally wiring your system for best air-flow, and cooling for how you intend to use the system. Some usage scenarios require more cooling due to intense 24/7 use, while others will be designed for high-end video editing, photo editing, CAD, 3D modeling - you name it! Each scenario can optimized according. We provide lifetime labor and lifetime tech support, and our tech support is in-house, rather than overseas, so they are very familiar with our systems should you ever need to contact them years down the road. It costs us more to have qualified employees in-house, rather than outsourced, but we simply could not offer the higher level of service and systems if we outsourced that work.  All of these things add up, so our systems will end up costing what they do for that reason, but great care has gone into each and every system, and will be backed up with lifetime labor and tech support that doesn't end when a parts warranty may end.  It's truly lifetime!

So perhaps the questions asked shouldn't be "Why are your computers so expensive?" but rather, "Why are the computers from others builders so cheap?" There is an answer. 

Tags: Cost, Transparency, Quality, Value
Stephens_Chris

You are spot on in your explanation of how we do business here at Puget Systems. I would only add a response to a follow-up question I usually get: Why not do both? By that, they mean, why not offer the cheap AND the quality. The answer is pretty simple: we have zero interest in the former. Nobody gets out of the bed in the morning, clicking their heels and jams into the office to build $600 machine that break in a few months.

Posted on 2015-05-01 18:10:46

I would also add two things:

1) It is not cost effective to do cheap systems here in the US. Even if you use cheaper hardware you still have comparatively expensive labor.

2) Doing both cheap and quality systems under the same brand would dilute the name recognition.

Posted on 2015-05-01 18:22:01
Debjyoti Ghosh

On expensive labor I would like to point out that almost all of the tech industry is in the hands of Chinese. They make and you Westerners sit on your ass and assemble. So don't talk poppycock

Posted on 2016-04-18 18:01:06

Component manufacturing is largely in Asia (China, Taiwan, etc) - but we still put in many hours of labor here assembling and testing the system. Plus there is the time involved in consulting before a customer orders and providing tech support (and repair services, if needed) afterward. All of that we do here in the US, no outsourcing.

Posted on 2016-04-18 18:05:23
Debjyoti Ghosh

I believe some assembling work and after sales service can't possibly shoot the components prices through roof.... A big part of pricing depends on the kind of labor and since Asia is known for cheap labor the price of these high-end components feel like being smacked on back. 980 ti hovers around 1000 USD. Now you're saying a Chinese labour is worth that much? Go fool others!

Posted on 2016-04-22 03:15:06
Preston_B

Four years ago I ordered my Obsidian workstation, and it continues to cruise along with nary a hiccup--That's 4 years of daily use with an average up time of 16 hours/day! That's a testament to the quality and reliability of the hardware, the care taken during building and testing, and the packaging of the machine for shipping. Each stage of the process was done with great care and attention to detail. All of these things were accomplished by people who truly care about their product and their customer: You can't put a price on that!
So, do I consider the products from Puget Systems expensive? Not at all. Will I buy from them again? Yes, without any hesitation! Oh, wait! I did. My Puget laptop is running on my other desk as I write this.
My favorite quote goes, "If you want nice fresh oats, you have to pay a fair price. If you can be satisfied with oats that have already been through the horse, well, that comes a little cheaper." I'm sure happy that Puget supplies nice, fresh, oats at what I consider a fair price!

Posted on 2015-05-01 19:21:57
bdot

My Puget computer is over 5 years old. Had to replace a hard drive but that was due to a power surge. Also a stick of RAM died and the power supply died. But that's it so far. Even the fans keep on going. Most computer fall apart at 3 years.

On the flip side, that hurts Puget in that I'm not buying a new computer from them every 2-3 years. :)

I would buy a new one right now but I'm thinking of quitting my job this fall and taking a break from working so I'm having to hold back from spending money right now.

Posted on 2015-05-03 18:45:53
Mike J Sando

The system I ordered for $4200 in 2009 was worth more than the Hyundai vehicle I drove at the time. That car is long, long gone. The computer? It is still going strong SIX YEARS LATER, and is still so much better than the desktops you'll find today in the big-box showrooms. Maintenance has included replacing a fan after three years of nearly continuous running (I'm replacing a fan now, after another three years). I've used this machine probably five days per week on average, leaving it on all the time. I'll order my next one from Puget Systems but I really am not sure when that will be.

Posted on 2015-09-03 04:50:05
Jeff Stubbers

It's great to hear your system is serving you well, Mike. Our goal is to get you a system to meet your specific needs for many, many years. Here's to another six years!

Posted on 2015-09-03 12:59:28
a

soundblaster Z card only about 100 bucks on originPC and ibuypower but pugetsystem take ~130 bucks for it. im done, bye puget, n ur overpriced shit

Posted on 2016-06-29 16:51:31
xostrowx1991

That's the problem. They can't blame high pricing of RETAIL parts on labor costs etc.. The fact that things like sound cards, hard drives etc.. are vastly more expensive than elsewhere is nonsensical. I can understand the base cost of the system being higher due to labor and so forth, but to take an item that goes for $300 everywhere else and sell for $550 here is too much...that's just price gouging.

Posted on 2016-09-12 04:18:42

We don't have a "base cost" to our systems. We simply mark up the individual parts by a percentage. It costs a lot of money to pay a full staff of builders, shippers, support techs, consultants, lab techs, managers, etc living wages - plus the cost of facilities, equipment, utilities, and more. If we were vastly overcharging for the services we provide then our company president would drive around in a fancy car... but he drives a used Jeep, with a minivan for his family. And if we do have excess that we've made as a company at the end of the year? It is divided up as bonuses to the employees, not hoarded by the owners.

Puget Systems definitely isn't the right system builder for everyone. We aren't the size of Dell, and we never want to be. Our focus is on quality, service, and the experience of owning a personal computer - and for those who care about that, we are a great option. For those who value the lowest possible cost, there are other companies who are a better fit. It all comes down to what you want from your computer purchase, and whether you value a relationship with the system builder that goes beyond the initial payment and delivery :)

Posted on 2016-09-12 04:49:32
Stormy

From the sound of it, you probably aren't the right system builder for many people, perhaps even most. $1500 for a basic desktop PC is a pretty good chunk of money even for a very good base computer. That would be something top of the line and maybe several hundred in change for a consumer from most large companies. It sounds like the focus is on the bottom line and the employees and, presumably, the product, but not on helping the customer's wallet. ----- Why would you not have a base cost and/or have percentage markup on the final product? It sounds like you're trying to profit on -all- of the parts and not just the product you're providing. Maybe it all works out the same, but that sounds sketchy.

Posted on 2016-09-28 02:50:02

A single base price wouldn't work very well, since a system that is more complex costs a lot more to assemble, test, and support than a simpler computer. For example, a HPC rackmount setup with dual Xeon processors and four Titan X or Tesla GPUs is a much more complicated system to deal with (all the way from sourcing parts through providing tech support and warranty coverage) than a photo editing workstation with a Core i7 and a single Quadro video card. And we build even more extreme systems: quad Xeons, rackmounts with 8 GPUs or 20 hard drives, and more! By using a percentage markup on the parts (or on the whole system, if you prefer - it would amount to the same thing in the end) we can make sure that the money we charge for our services scales with the complexity and cost to us of providing those services.

Posted on 2016-09-28 04:09:11

Tried to shop local, but the markup is just to "marked up".. price compared item by item with other vendors, and Puget is just too high. Sad, would love to give them the business, but identical PC from 3 online well known companies with shipping comes out to about $1800 delivered, compared to $2500 with Puget. The only difference is the case, a slightly different MB, and a different set of fans. Otherwise part number to part number it's the same. I tried, I really did.. would have given them $1800 this week.. but just can't give them $2500 for the same machine. Your business, run it anyway you want, but think how much better and more business you would get if your prices were at least a bit fair or competitive. Thanks for at least replying. Best of luck!

Posted on 2017-07-19 23:26:45