Cheaper to Build or Buy?


As computer sales come around and ads pop up I look at the prices and see that you can get a computer system for a few hundreds dollars. I remember when just an average disk drive cost that much. Having built my computer myself by purchasing the major pieces (motherboard, video card, processor, etc.) and putting them together, which cost me more than $1000 in 2005, I wanted to see if a person could save money just by buying the preassembled machine instead of building it themselves. So I randomly picked the Dell Inspiron 570 which is on sale for about $400.

  Computer Component Retail Cost
(Fry’s Electronics)
Footnotes

  1. Memory manufacturer not specified using 3x Patriot 1GB sticks
  2. Exact drive not specified so using a Western Digital 300 MB/s SATA 32MB
  3. Integrated means part of the motherboard but I could not find an ATI chipset based motherboard so the price is for the Gigabyte GA-M68MT-D3 with NVidia GeForce 7025 chipset
  4. Best match was a 24X DVD Burner
Processor AMD Athlon™ II X2 245 (2.9 GHz/1 MB) $65.00
Operating System Windows 7 Home Premium $109.99
Memory 3GB DDR3 @ 1333MHz1 $69.99
Hard Drive 1TB SATA HD @ 7200RPM2 $69.99
Video Card Integrated ATI HD4200 Radeon™ 3 $49.99
Optical Drive 16x DVD+/-RW4  $22.99
Input Device USB Basic Keyboard and Mouse $10.99
Security Software McAfee 15 month subscription $49.99
Computer Case Raidmax ATX-2000B $29.99
  Total $478.92

So as we see the total for buying all the components and building a system is more expensive than just getting the system from a manufacturer. This of course only applies to main stream systems, as the more you customize the system the less the manufacturer can automate the process of producing these systems and so the more appealing building your system for yourself will be price wise.

Now you might ask, how can these companies that make these machines make a profit at these prices when a person would spend more than the price to build it themselves? It deals with the economies of scale for the part manufacturers. When an individual buys a processor, he will pay the retail price of a single unit because it cost so much to produce that single unit, however the manufacturer will purchase millions of the components which lowers the cost per component. Also the manufacturer will get sheets/stacks of components without any of the packaging that the retail box has.

Now when would it make sense to build your own machine? Well when the economies of scale are reversed. Because computer manufacturers are extremely competitive and most people are looking for the cheapest systems they have designed their line to low end and business end computer setups. When you look outside these bounds for an “Extreme gaming system” these companies will charge a pretty penny to build that machine for you.

Now Dell has an extreme gaming branch called Alienware that tailors to gamers who needs blinding speed graphics, large amounts of memory and disk space, lightning fast processors, etc. So taking another sample I went with the Area-51 ALX Desktop’s specs and after customization it came to $7848.

Computer Component Retail Price
  1. High performance needs great cooling and I like the design of the Cooler Master cases for cooling purposes.
  2. Again memory manufacturer is not given so Patriot PVT312G1333LLHK is used
  3. Dell specific gaming keyboard and mouse, so substituted with Microsoft Sidewinder X6 Keyboard and Microsoft X8 Gaming Mouse.
  4. Fry’s only had Seagate’s 500 GB SSD on the web and for SSD RAID is not as necessary as it is with spinning discs due to lower occurrences of drive failure.
  5. Used two WD 2TB ATA/300 7200 RPM 64 MB cache WD2001FASS drives
  6. Because the monitor is proprietary to Dell I used the comparable ViewSonic VX2450WM LED backlit Monitor
  7. Lite-On 12x Blu-Ray Writer drive
  8. ASUS 24X DVD+/-RW Burner drive
Computer Case Cooler Master HAF X RC-942-KKN11 $199.99
Processor Intel i7 980X Extreme (4.0 GHz, 12MB cache) $1,010.99
Operating System Windows 7 Professional $144.99
Memory 12 GB DDR3 1333 MHz2 $149.90
Video Card Dual 2GB ATI Radeon HD 6950 $309.99
Input Devices Keyboard & Mouse3 $179.90
Hard Drive 2×256 GB SSD Drives (RAID 0)4
2x 2TB SATA-II Drives @ 7200 RPM (RAID 1)5
$139.99
$379.98
Monitor 24” UltraSharp U2410 LCD Widescreen6 $199.99
Sound Card Creative Sound Blaster X-Fi Titanium $81.57
Optical Drives Blu-Ray Writer (BD/DVD/CD)7
DVD Writer (DVD/CD)8
$149.99
$22.99
Motherboard ASUS Rampage III Extreme Intel X58 1366 $364.99
  Total: $3,335.26

So by building the system yourself you save $4512.74 which is more than half the price. So from this I gather that if you want a high end machine you should build it yourself, however if you are looking for a machine for simple tasks and everyday use the best is to just buy it from the manufacturer and just plug it in when it arrives.

Oh and the price of the computer which I built in 2005 for $1500 that I am currently using? According to Dell’s website the closest system costs $1491.97. Not bad to depreciate only $8.03 over 6 years. Smile

A final note, this is for desktops, if you are purchasing a tablet or laptop you have to go with the manufacturer until the computer stores start selling laptop cases and motherboards with the processor being able to be inserted.

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4 responses to this post.

  1. Posted by Robert on February 26, 2011 at 7:06 pm

    Did you leave out the power supply?

    • I believe these cases came with a power supply. However an additional good point, still cheaper for the high end and more expensive on the run of the mill computer.

  2. It’s worth pointing out that leaving out the security software and operating system (for those who already have their own or can get it free, i.e. Linux) knocks $160 off of the price of building your own.

    Still, it sounds like it is only economical to build it yourself if you have specific needs, like gaming or other customization.

    I’d be interested to hear the specs of your system?

    • Sounds like I got my point across. There are a few additional hacks to get a cheaper system that I didn’t get into. Usually you can get great sales right after the next version of a component/software comes out or if you time the purchase with sales (Black Friday, or Cyber Monday).

      As for my system you have to remember it is now 6 years old. 🙂
      OS: Windows 7 Ultimate
      Motherboard: ASUS P5WD2-Premium
      CPU: Intel Pentium D 830 – 3.0 GHz/3.0 GHz (SmithField)
      Memory: 8GB DDR-2 Corsair PC2-5300 (333MHz) (5-5-5-18-22)
      GPU: ATI All-In-Wonder HD
      HDs:
      1) Seagate 1.5 TB SATA 3.0GB/s 32MB Cache 7200 RPM
      2) Western Digital 1.0 TB SATA 3.0GB/s 16MB Cache 7200 RPM
      3) Western Digital 400 GB SATA 1.5GB/s 16MB Cache 7200 RPM
      4) Western Digital 250 GB SATA 1.5GB/s 8MB Cache 7200 RPM

      An interesting note about my system, just the cost of these pieces listed today (Except the OS, also not all pieces are in production anymore): $680.52

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