I First met Humphrey Chen (in cyber-space) when Joe introduced us about a year ago. Joe said “He’s family”. With the exception of Ed and Skip, Joe’s never introduced anyone else to me in such an illustrious fashion. Since then, Humphrey and I have exchanged dozens of E-Mails, small talk, professional and personal. Humphrey makes me laugh. When I think of the “Head Nut” I smile.

Doing business with Humphrey is easy. If you ask for a recommendation you get a good one, based on Humphrey’s personal experience with the given product – not upon Humphrey’s bottom line. Not upon Humphrey’s desire to sell. Not many people, in my experience, have been able to separate self interest from their advice and deliver “clean information” in the manner Humphrey does.

“OK Dan we get it – you like Humphrey; but can we afford to shop at PC Nut Computers? We have bottom lines to think about as well!” It’s a tough question even for me personally to answer. Often I CAN get a cheaper price. When it’s a new product, or one I have no experience with, then economy lies with Da Nut. I tend to screw up the “new” more than most. It’s great to know support is THERE!.

But there’s a broader issue that I’ve spent some time thinking about. If I always buy from the cheapest vender, how does this help shape the market place? The cheapest vender will become and remain the cheapest by offering less. Fewer services, less time spent getting it right. Less time spent getting to know the product. Less time spent working out compatibility issues. Less time spent pleasing ME!!! Yet I too have a bottom line to think about. I tend, as I’ve said, to go both ways. To be honest, I don’t want to see a market where only the lowest price survives at the expense of service.

I Prefer a market place where my dollar can buy just a product or, when I need it, a product backed my someone whose experience and knowledge far exceeds my own.

The PC NUT site is pretty much what you’d expect from a guy that calls himself the “Head Nut”. His Logo…..well you’ll see, if you haven’t already, for yourself.

The site takes about two seconds to get to know. Everything’s right out front. “Contact” Heads the menu list. Below, product categories are laid out in a clear and logical manner. The inventory list is not as long as it could be, but what’s there is a “whose who” of quality products.

I’d like to see a water cooling and a Peltier section become part of the menu. But Perhaps we are better served leaving “extreme cooling” in the hands of specialists.

Humphrey hand picks CPU’s for his customers and customers achieve very respectable and reliable overclocking in this fashion.

I guess that’s about it. Except I’d like to say here’s Humphrey…He’s family.

How did PCNUT Computers get started?

As with many entrepreneurs, I got tired of being kicked around by Corporate America. Instead of accepting another (good paying) corporate IT job that was offered to me, I decided to take control of my own destiny and start my own company. Since I have always been a hardware geek, pcnut.com was born on January 1996 with a little savings we had and my wife Cheryl’s blessing – and the rest is history.

How long have you been in business?

4+ years and quite long compared to other online computer shops.

What was the most difficult obstacle for you to overcome as a new start-up enterprise?

The biggest obstacles for a new Internet start-up like ours (still is) to overcome is to get our name out there and recognized, keep up with quick & ever changing technologies, figure out what our customers are interested in and finding sources for those products. Also, this is a very capital-intensive business, so financing has been a real challenge as well.

How large is your staff?

We are a small mom & pop online computer shop and maintain anywhere from 2-5 staff depending on how busy we are.

Do you maintain a storefront as well as an online presence? What are the major pros and cons of doing both?

PCNUT Computers is a 100% internet-based company; we do not have a retail storefront nor have the facility to allow local customer pickup. Although it allows us to operate at lower overhead, at times we feel bad for local customers that couldn’t simply drop by and pick up the parts they need; but we try to facilitate that by offering them cheaper shipping.

What do you feel your specialty is?

Our specialty and main focus is with top quality high performance components and custom-built computers at reasonable prices, which we believe our workmanship (on custom computers) is second to none, backed by top notch customer services & support. A couple of our custom rigs were reviewed by overclockers.com and both received high marks. Although since we were one of the first shops on the net to offer overclockers’ combos, we are more known on the net as the place for overclocking components & systems.

What services distinguish you from other vendors?

Honesty & integrity are the keys to my business. Our customers can expect to receive honest & informative opinions & advice from us on products they are interested in, and receive exact products on time and as advertised. If we feel a particular product is not right or will benefit a customer, we will tell them without any reservation. Also, since all of us are hardware geeks like most of our customers, we test (or play) with everything we sell so we can share our experiences and knowledge with our customers.

Web retailing is becoming big business. Competition from large distributors becoming web retailers is driving prices down – good for consumers, tough for smaller retailers. How do you compete in this environment? If I look on Pricewatch, I can buy things cheaper than what you advertise. Why would I buy from PCNUT Computers?

I have to admit, it’s a very tough marketplace and very hard for small shops like ours to compete price-wise nowadays. We try to focus on finding products that are hard to find, inform and list specifics of products (ie S-Spec/Stepping), develop relationships and buying direct from manufacturers on certain products as well as fast and fair shipping. Sure, there are plenty of vendors out there that will low-ball each other or bury their profit margin with high shipping charges so they can pop up on the first page of search engine like PriceWatch.com. However, I believe our reputation is what keeps a high percentage of our customers coming back as well as referring their friends and families to buy from us – for which I am very grateful.

When I checked with Reseller Ratings I noted that you’ve maintained a rather impressive 6.7 with 185 respondents and growing. What makes PCNUT Computers a better vendor for a consumer than your competitors?

I guess it’s because we deliver exactly what we promise when we promised, backed with top-notch workmanship, customer service and technical knowledge.

What percentage of sales is accounted for by repeat business?

More than 50% and very proud of it! I think it speaks very highly about the quality of products & services we offer to our customers, and we are grateful for all of the loyal “PCNUT” fans we have all over the world.

What percentage of sales is accounted for by Internet business?

We are a 100% Internet-based business.

Profit margins on hardware are very thin. Is all the effort worth it?

I think so. Although it is a tough way to make a living with very little time left for sleep and a personal life. I do love this business as it allows me to play with latest hardware available in the marketplace (sometime before the public) and meet lots of interesting & wonderful people all over the world. It’s a nutty business, but I love it!

Where would you like PCNUT Computers to be a year from now, five years from now?

My short-term goal is to revamp our website (new interface), fully automate our website with integrated shopping cart system as well as a custom system configurator. Since I am NOT a software guy, it has been a real challenge for us to get that part of the goal fulfilled – finding the right people and modules/programs to do so. Our long-term goal is to double or triple the size of my company, in both sales revenue and number of technical staff, and become a larger premier online computer shop on the net with bigger purchasing power and better pricing.

Is there anything you’d like to change in your business model?

Yes and no: Since market conditions and focus change constantly, we have to adapt to what it dictates and make necessary adjustments to our plans and model. As stated above, automation will be our main focus to allow easier and pleasant shopping experiences for our visitors and saving of time & labor on the backend. Any online retailer that does not change or adjust their business model to changing market conditions, IMHO, is a fool.

Unfortunately, some venders don’t seem to think twice about selling poorly made or incompatible goods. What measures do you take to ensure your customers’ satisfaction in this area?

Before we offer any products for sale to our customers, we test them extensively in-house. If we run into compatibility issues or are not satisfied with its performance or quality, such a product will never make it into our online catalog. The bottom line is that, if something that is not good enough for Da HeadNut, it’s not fit for sale! That is one of the main reasons why we do not carry every offering by manufacturers we feature.

Do you maintain a tech line, and if so when is it available?

Although we don’t maintain a 24/7 “live” tech support line, we do have a dedicated tech phone/fax number, email, as well as staff who handle all support issues and RMA requests. We are also thinking of adding a message board to better answer and service our customers. When we were a one-man shop, I handled all of the support calls, but now we have grown so I have learned to let our tech staff handle that area.

Parts being returned must be the bane of a reseller’s existence; is there any way for a reseller to cut down on this?

Don’t carry or sell junk! That is why we sell nothing but name-brand top quality components – same with our systems. Product testing is very important to eliminate any poorly produced and problematic products being sold to our customers before and during each product’s life cycle.

If there were one truth you would like a customer to understand about PCNUT Computers, what would it be?

Since I handle majority of email sales inquiries (95+%), some days it can get quite overwhelming. So, please don’t take it personally or get upset if we don’t reply to your inquiries or request for quotes (RFQ) right away. Also, since we can’t compete price-wise with every shop listed in pricewatch.com, please don’t expect us respond to your email if you emailed us with the lowest price you can find on the net and expect us to match & build you a system based on those prices.

What is your personal computer like?

Which one in particular? 😉 As a hardware junky, I personally have half dozen computers that I use daily. My main computer consists of a 440GX-chipset motherboard running dual P3-500s (time to upgrade), 256MB RAM with onboard U2W SCSI. All SCSI storage devices: Seagate Cheetah, Plextor CD-ROM & CD-R, Seagate tape drive, Iomega ZIP, Leadtek GeForce 2, SB Live. Oh, Iiyama VisionMaster Pro 450 19″ is my main monitor. Of course the spec changes all the time.

When I contacted you asking for this interview you were gracious enough to say yes. Any regrets?

Nope, not at all!

If there’s one question you wished we had thought to ask, what would it be?

How about “Are you really a Nut?”? And the answer from me would be “YES! And I am proud to be one!”

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