November 06, 2001 15:43:57
The PC vs The Hybrid
President of the Paul Gillrie Institute, Inc
Don't waste your money on the new hybrid terminals. They are costing you more than you realize.
The computer vendors have a hybrid terminal that has the look of a windows computer. It comes with a 15” monitor and allows the user to browse the web and do email. The price is around $850 and the maintenance is around $18 per month. The purpose of the terminal allows the dealer to replace those dumb green screens with a color monitor that service reps and other employees can use to connect to the factory via the web. The browser ability allows the dealer to access his manufacturer DCS sights for warranty information, service bulletins and campaign information etc.
The computer vendors can justify the price because they compare the hybrids to the price of an expensive PC. The expensive PC is quoted at around $1,400 and $25 a month for maintenance. The dealer is led to believe the hybrid is a $600 a month saving up front and a $7 a month maintenance saving each month.
The argument falls apart when we discuss the amount of money a dealership should pay for a PC. My son works part time for a national PC super store. He has explained to me the super store he works for loses on average 7% on every PC sold. They make their profit on the warranties, software and accessories. Especially the warranties.
We conducted a little experiment with my company. We contacted a local PC provider (not the Super store) and took him down to the superstore where we told him to spec out a PC and compare his prices with those in the superstore. The local PC provider said he could build a PC for $550 and it would have more capability than the computer I was looking for. The screen and mouse would be about $200. The bottom line is the local PC providers can be very competitive.
Now, when a dealer has a local provider meet his PC needs then the hybrid terminals don't make sense.
The dealer gets a fully functional PC with a hard drive and all the bells and whistles at about the same price.
There are a couple of other advantages to the PC solution. The industry is moving towards PC based software. The PC's can be serviced locally at a fraction of the maintenance prices dealers are paying.
When the time comes for the dealer to replace the PC, the dealer can sell it to an employee for two or three hundred dollars.
Paul Gillrie is the President of the Paul Gillrie Institute, Inc and is the author of the Computer Negotiating Manual. The Paul Gillrie Institute publishes the Journal of Dealership Computing for the automotive and truck industry. He is a 2001 NADA, ATD, VADA, NCADA, and AICPA speaker. He can be reached by calling 1-800-576-6959 or his e-mail address is firstname.lastname@example.org