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Meeting the second-hand computer demand

The entrepreneurial spirit is alive and well in Slovakia. In the computer industry a huge market of computer-hungry counsumers was found by Solve Computers. "We saw that people needed computers, but they needed them cheap," said Michal Holička owner of Solve Computers. "So we did it. We provided it for them."
Business has blossomed since Holička and his two partners, who have since left, started Solve at the end of 1993. Today the office is illuminated by the glow of computer screens while technicians examine computer components and the phone rings off the hook. Annual turnover has gone from under one million Sk in 1994 to 20 million Sk in 1996. The increase has been due to Solve's activity in importing and then selling second-hand computers at low prices.

The entrepreneurial spirit is alive and well in Slovakia. In the computer industry a huge market of computer-hungry counsumers was found by Solve Computers. "We saw that people needed computers, but they needed them cheap," said Michal Holička owner of Solve Computers. "So we did it. We provided it for them."

Business has blossomed since Holička and his two partners, who have since left, started Solve at the end of 1993. Today the office is illuminated by the glow of computer screens while technicians examine computer components and the phone rings off the hook. Annual turnover has gone from under one million Sk in 1994 to 20 million Sk in 1996. The increase has been due to Solve's activity in importing and then selling second-hand computers at low prices.

Slovakia has been starved for computers in the last three years and the major obstacle for citizens and companies has been cost. "Parents want computers for their children, so they can become familiar with MS DOS and how computers work," said Holička. "Companies need computers but they are expensive."

To provide inexpensive computers fulfilling Holička's mission "to have a machine for everyone," he went west to find banks, financial institutes, big companies and computer warehouses that continually upgrade their systems every two years. These big institutions couldn't just throw the out-dated computers away. Complicated environmental laws require a special expensive method for destroying old computers since some of the equipment is not environmentally friendly.

"When they realized that they could sell the computers second hand, they were happy to get rid of them, so we got good prices," said Holička. Solve found the best deals in Switzerland and Holland. "Ideally the closer the country the lower our transportation costs. But Austria just hasn't opened up that way."

The hottest items on a price list that changes once a week are PC 386's. Prices range from 9,500 Sk to 13,400 Sk. Newer items include PC 486's and 586's but the prices more than double as hard disk space, power, and RAM increase. There are pages of components for sale from the frames, processing chips, printers, fax modems, really everything. The biggest boom in accessories of late has been CD ROM drives.

Solve's customers include the international consulting firm Deloitte & Touche, other large companies, schools and families. There are many vying for the market with Solve but Potos a firm in Petržalka is Solve's biggest competitor.

Potos has slightly lower prices and has had representatives in every major city across the country, though they are scaling back for cost reasons. "The fact is we have the best prices people can afford," said Elena Pálková from Potos. In contrast Solve has only one other office in Trenčín. But according to Holička, by selling at such low prices you can't give the customer anything more. "It makes no sense to have such low profit margin, there is no service given. Plus those representatives can't service the customer. They have to send it to Bratislava."

The boom is over

The second-hand market is changing as the price of new computers comes down (see graph). "I am seriously thinking that we may have to discontinue selling second-hand computers," said Holička. Customers are very knowledgeable today compared to three years ago according to Holička. "They [customers] are thinking: I can pay a little more for a new computer and get all the benefits, a guarantee, and the latest technology." To cope with these new conditions, Solve has started to get involved in computer animation, and the creation of CD's for CD ROM. But that doesn't mean they won't buy old computers and components.

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