Wbmw:
Puh-lease! Do you know about retailing and this little thing called markups? If you don't know about that, you shouldn't complain.
Dell or anyone else is not going to sell you an item for $10 that costs them $10 to buy. They will charge $11, $15 or $20 depending on how much they think their typical customer will pay for it. So the difference is not $400, but $400/(1+X) where X is the average markup on all items. And it varies on each item. So if 2 or more different items are used to convert one into the other, than looking at any one's markup may overstate or understate the overall markup.
So lets take the example from the Inquirer, some of the underlying price difference is in the MB. Conroe MBs are less available and tend to be pricy wrt AMD AM2 MBs. $50-100 is not out of line here since nVidia 61xx class mATX MBs are quite cheap versus G965s (used since both have internal GPUs). Add $50 for the CPU cost difference. SATA to PATA converter adds about $30 more to the Intel box. This totals somewhere between $130 and $180 in actual cost differences. It does show up in motherboard combos on Pricewatch for example, ($241 vs $362 for just AM2 X2 3800+ & HSF & nVidia 6100 MB vs C2D 6300 & HSF & G965 MB).
Now you add in markups. Parts more pricy and hard to get, get higher markups. Markups to make up for slights (loss of preferential treatment for example) tend to be exagerated. And that markup applies to the whole cost not just the difference. So a $10 part with a 100% markup costs $20, but a $12 part with a 200% markup costs $36, the difference has an apparent markup of 700% for the $2 difference even though no underlying markup difference was higher than 100%.
Given that, its easy to see a mere $130-180 difference balloon to a $400 price difference or more. And then there is the tendency for there to be minimal configurations being loss leaders. Addons tend to have higher markups than fixed packages. So by adding to minimal configurations can exacerbate the differences. Its also how that by starting from different packages, you can have the exact same configuration have two different prices. Many times I have configured a minimum system to a packaged more expensive one and have it cost more than the packaged one.
In essence, those that highlight the differences as reflecting the underlying reality, tend to overstate the reality. There is a lot of truth that you should buy add ons from OEMs, but get them from reputable third parties. Use minimum configurations from OEMs and upgrade the components to your liking usually saves you quite a bit of money. The above is rather more difficult with Dell, because of their use of non standard components. That is why I buy only from OEMs that use standard components and interfaces as much as possible. You save far more money when you either upgrade or need service, than the slight reduction in initial cost.
I will agree that if you deal with a screwdriver type shop which gets a flat rate to build your PC, the charges for upgrades tends to reflect their underlying costs as you have either paid their markup in the above flat rate or the markup is the same on all products you add into your box. And these markups tend to be low because of all the competition. Thus the price differences are just a little above the real costs. Here you can get a feel for the underlying prices differences from the prices charged. We do this all of the time on this and the Intel boards. Most know of the assumptions used in this kind of proof.
Pete
AI
