Austin wrote:
> Quite frankly, I am amazed at how folks think about this. You have
> obviously never thought about that computer on your desk, and how it can
> be sold for $499! Or even your car, just go price the parts
> individually some time.

Thomas Womack <[email protected]> writes:
> I've often priced the parts for building a computer, and they add up
> to something within 15% of the price of buying the computer from Dell.

You may have priced the subassemblies such as the motherboard, CD-ROM
drive, etc. Try pricing the actual components (chips, passives, etc.) in
small quantity. You'll be lucky if you can get a total BOM cost less
than five times Dell's price.

The car example is even better. If you buy all the parts from Toyota (or
any of the manufacturers) to assemble a new car, you'll pay ten times
the price of the car.

> Moreover, the price for Intel CPUs in the shop is the same to within
> about 15% as the price stated for thousand-unit quantities in their
> press releases.

This is because the distribution chain is willing to accept very low
margins on the CPUs, because they can move such high volume. Try buying
a north bridge chip and see how that experience compares.