MSY bought by mining company

Discussion in 'Overclocking & Hardware' started by ssharwood, Jul 8, 2019.

  1. Sunder

    Sunder Member

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    https://www.channelpro.co.uk/news/8240/resellers-still-struggling-for-hardware-margins

    Margins on PC parts are razor thin. My understanding is that it's mostly between 5-10%

    So as a "low service" operator, I'd guess they're closer to the 5% end. So let's call it 5 Million in Gross Profits.

    From this figure, you need to subtract rent, wages, shrinkage, etc, to get a net profit.

    Multiply this by a "customer stickiness" or good will multiplier, which is the hardest part. Even for thin margin businesses, if your customers are "sticky", like mobile phone or internet contracts (Most people are too lazy to move), then the multiplier can still be high, 4-6 isn't unusual. For unbranded walk in retailers, where if a whole build ends up $10 cheaper on another web site, builders would go there, you'd expect the multiplier to be low, maybe 2-3.

    Add to this the value of stock, and you have a reasonable price for the business. Unless they own some of the buildings they occupy, it seems like the offer price is a bit generous. (Even if expenses were kept down, and they could run on under $1m a year, that should still only bring us up to $10-12M + Stock), but that often happens when someone really just wants a business. Or, perhaps they have shown some very stable sales figures, so the buyer accepts that their customers are very loyal. Perhaps they have supplier accounts to some small business IT consultants. (The kind of guys that do like desktop support IT for real estate, small law firms etc.).
     
  2. mr camouflage

    mr camouflage Member

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  3. shino

    shino Member

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    there is not much price difference between say computerallaince and msy ay?
     
  4. hlokk

    hlokk Member

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    Random company acquires computer business and then turns around and puts it up on ASX. I'd say theres a high chance the companies demise will be in view in under a year. Either they're going to pump and dump, or its a reverse takeover as mentioned, or they'll just slowly run it into the ground. If an investment company took it over, it would practically be a certainty that it would be an attempted repeat of the whole DSE fiasco (which was a stupendously profitable switcheroo by the investment company).

    https://foragerfunds.com/news/dick-smith-is-the-greatest-private-equity-heist-of-all-time/
     
  5. Bert

    Bert Member

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    Computer Alliance are well over-priced with a lot of their product. The current Zen2 CPUs are a great example. Last I checked their 3900x was priced $40-50 above the other major retailers. Talk about shafting your customers due to demand, in my opinion at least.

    I can spec a high end build from someone like PC Case Gear and have it delivered for hundreds of dollars less than walking into Computer Alliance and picking up the same, or comparable, gear.

    Really disappointing...

    From what I've seen the last year or two, most Brisbane retailers are poor value.

    Gamedude - Hasn't been relevant for years now.
    MSY - Reduced range, have started stocking some rubbish brands at the cost of more popular brands / products - also they are no longer consistently the cheapest option.
    Computer Alliance - Great range, but very over-priced. Poor value shopping unfortunately.

    I base this on having bought a considerable amount of product from each of these over the years.

    It's a shame MSY have changed their inventory as I live a km or two from their shop. I suspect that they have consciously cut their product lines and stock levels as a result of the financial impact of the fines they received in recent times. Financial pressures I guess, which is probably why the owners are looking to get out now.

    These days I prefer to deal with PC Case Gear. Awesome range, pricing is in line with the industry and have always had timely and hassle free delivery of product.
     
    Last edited: Jul 12, 2019
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  6. chook

    chook Member

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    I picture an executive meeting going like this:

    Executive 1: Hmmm, it says here in my MBA textbook that we should have a diverse source of income streams.
    Executive 2: OK, let's do that.
    Executive 3: I got us an old people home.
    Executive 4: I got us a medical company.
    Executive 5: My son said we should get a computer company and he knows all about computers.
    Executive 1: OK, great job guys. It says here that the next thing we should do is celebrate our success.
    Executive 2: Bonuses for everyone!
     
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  7. apsilon

    apsilon Member

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    Really? I haven't been there in years but it used to be:
    - Queue up outside before they open so you'd have a chance of buying what you want before they sellout.
    - Continue to queue once they open for at least another hour while 2 people serve and another 3 stand around doing nothing all the while the phone rings constantly but is never answered.
    - Eventually get to your turn to be served only to find half of what you want is sold out.

    There's really little to no difference in price to other suppliers since they got their slap on the wrist fro the ACCC so I shop elsewhere.
     
  8. Tinian

    Tinian Member

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    Now they just need to do something about the hygiene of their staff.
     
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  9. MR CHILLED

    MR CHILLED D'oh!

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    Cause Shitney.

    Not much of a queue here in Radelaide.
     
  10. adamsleath

    adamsleath Member

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    I do umart msy and computer alliance

    For I like walk ins

    Agree that pccasegear good website and service.

    Last time I went to computeralliance they said they’d do the warranty service for full manfacturer term period. Which for me on the occasional item is appreciated.
    I’d rather not go through the rma process crapola myself.
     
  11. twisar

    twisar Member

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    A 707? Was this in the 60s? Or possibly into the 70s
     
  12. cvidler

    cvidler Member

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    that's not good/special service, that's the minimum specified by the law. it's exactly what MSY got smacked for.

    you buy something from a store, it's the store you deal with, not the manufacturer.
     
  13. andurils_sheath

    andurils_sheath Member

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    I remember those days. Back in the early 2000s when they first opened up in Malvern. Lawdy, it was always hit and miss what you'd get. Phones were useless. Lines were massive.
    But the prices were so damn cheap it made it all worth it.
    These days I rarely shop at MSY even though there is one in my suburb.
    Prices aren't better, service sucks, especially warranties, range is limited, website blows.

    They had an opportunity about 5 years ago to spend a little on a really good quality website which i think would have set them up and kept them relevant.
    I think its all for naught now as they have nothing that sets them apart....
     
  14. adamsleath

    adamsleath Member

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    They used to only do 1 year.
    Pain in the neck retailers not doing their job properly.
     
  15. clonex

    clonex Member

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    cant be worse than 7/11, staff should be given free deodorant to spray daily.

    ive been to the bundamba msy few times didnt mind it, the dude there spoke strayan just like they do at computer alliance
     
    Last edited: Jul 12, 2019
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  16. dirkmirk

    dirkmirk Member

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    What about the ebay discount factor? If you can wait for a sale and postage times nothing comes cheaper.
     
  17. d_prac

    d_prac Member

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    Computer Alliance has actually become really cheap since going on eBay. Not in-store prices but they now regularly participate in eBay's 20% off sales and have now separated their shipping which gets wiped if you're an eBay plus member (finally, the way it should have been on launch).
    I live/work close so I keep an eye out for eBay discounts and just pickup instore.

    This is why I try to do all my buying at Computer Alliance. As far as I've been able to find, they're the only retailer in Australia that doesn't try to illegally shorten their warranty liability.
    I don't care if other retailers offer good phone service or better prices. If they try to tell me they only do the first year of a three year warranty, that's illegal and I'll take my business elsewhere or I'll make them comply with small claims court if they are the only store stocking what I need and it ends up failing under warranty.
     
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  18. vladtepes

    vladtepes Member

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    Well any adverse changes to MSY will be making U-Mart as happy as a dog on a meat truck.

    Which may not be good for us if there is less competition...
     

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