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Old 2010-09-22, 11:32 PM   #1
secretsquirrel
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Default the truth about MDG computers and others

Ok so I see a lot of complaints about MDG and I have to admit that they are, to a point, valid. Having said that, show me any company that doesn't have complaints made against them. I suppose that it is reasonable to assume that comsumers can get a little heavyhanded when complaining about something that was supposed to be a sweet deal.
In the case of MDG Canada, Most of the complaints I have seen online are in regards to not receiving what was described in advertising or as ordered. Of this I am sure most are completely true and I'll tell you why;

I was employed by MDG as a store sales rep and due to my past experience ( I owned a "White Box" manufacturing business in the '90s) I gained a lot of knowledge about how MDG operates in Canada.
MDG Canada is, to the best of my knowledge, owned by Serbian immigrants and their effort to go Canada wide consisted of francised stores sold to more Serbian immigrants. I'm not exactly sure what the Serbian connection is or how it directly affects this company's policies but there it is.

The business model for MDG is, on the surface, a good one. They offer computing solutions based on brand name components with full custom configurations as well as financing.
Where it all breaks down is in the francising model. All Advertising and pricing is dictated and strictly controled by MDG Canada. This means that the price of a computer package is based upon costs at the source, MDG Canada, which is based in Ontario. This is where the trouble starts. From what I can tell, MDG Corporate has enlisted Ingram Micro as their chief component supplier in Canada which immediately puts them at a disadvantage. Ingram Micro is a leading marketer of components but not to manufacturers. Their priceing is more geared towards corporate IT than manufacturing.
This is where the sillyness begins. Ingram Micro's wholesale pricing is higher than most local stores retail pricing, add on top of that, MDG francises are restricted to purchasing from MDG Canada under the premise that their combined buying power reduces costs. So a store in Calgary would not only pay Ingram Micro's inflated price, they also must pay to have it shipped overland on a weekly basis from Ontario. This incures huge shipping costs becase those weekly orders usually result in LTL (less than full load) shipping, which also causes delays as it must wait for the trailer to be filled before it is shipped. I have seen the invoices for components and trust me, it aint pretty.
So then MDG Canada places ( at the Francises cost) local newspaper full sheet ads with pricing based upon what THEIR cost of manufacture plus mark-up as a price leader. The problem this creates is myriad. The local store can in no way offer these prices and not LOSE money.
Component costs, advertising, assembly and shipping costs alone are enough to push the loses into the $75 per unit range. Op costs(heat,lights,rent) and sales costs don't even figure in yet.
So that $599 pc you see in their ads has a store cost of at least $675. This in itself is motivation enough to resort to desparate sales techniques. Add in additional costs of promo items like MP3 players and it gets out of hand.

So how does MDG get away with it? Caveats my friend, Caveats.
When looking at a MDG ad you should be able to see a statement that the prices reflect a particular model. That model is Last years Model and it clearly states while supplies last (if you consider ultra-fine print as clear). When you arrive at the store, ad in hand, looking for the $599 PC, you are told they are all gone but lets see what we can do to come close. and so the hook begins.

MDG Canada has no policies or guidelines regarding the training of sales staff or at least none that are implemented or enforced. So francisees are forced to add "creative" sales solutions in order to try to regain profitability. For example, Most Intel Motherboards ( Yes, thats all they use) include an integrated network card and sound. MDG in-store salespeople are instructed to sell these features as ADD-on components adding about $200 to the overall cost. This is also true of Laptops, in fact most laptops such as the Acer products sold by MDG, are completely integrated and "add-on" internal components are not generally available other than memory or hard drive capacity.
From a hardware view, MDG Computers should be very reliable. Intel motherboards and CPU's, Kingston memory, Samsung opticals and Western Digital HDD's should all add up to rock solid performance and longevity. The failure here is in the cases, specifically the Power Supplies. The cases are all manufatured for MDG in China and are shipped with a Power supply installed. The power supplies could barely be considered "basic" in terms of power rating and generally will prove unreliable in the standard configurations advertised. Begin adding extra components like memory or hard disks and you almost guaranteed a failure. The power supplies come free with a $22 case and so this comes as no surprise. Computers truely are the sum of their parts and so one cheap power supply cripples the mighty.
So MDg wonders "what went wrong? we have the right parts and yet...failure"
MDG has no real quality assurance people and so no way to track where these failures come from and how to resolve it. Instead they seem to prefer to always be on the defensive when deal with customer issue. Desparation turns to dishonesty and next thing you know, hundreds of unhappy customers.
Now to be fair, While under their employ, I did have several corporate customers who were quite happy with their purchases and rarley had warranty issues. This is because they generally took the systems as offered without untested configurations. A good example of this are the fine People over at the U of C.
Generally speaking, the Technicians employed within the stores are under experienced or just weren't paid enough to care and so any avoidable issues with custom configurations went unnoticed and cronic problems remained unreported.
So is MDG a scam or what? Well, Yes and no. Yes in the sense that the marketing is way over on the dark grey side. No in the sense that most problems arise from corporate stupidity and not outright intent to rip off the consumer.
How would I compare MDG to say, Dell? Its tough to be objective as I have a huge hate for Dell as a company( The original PC Pirates as far as Im concerned) and a soft spot for the underdogs of the world, but I'm gonna give it a go here;

Dell Good:
1. better than average customer service and support.
2. warranty usually resolved quickly and to the customers advantage.
3. Low pricing and minimal advertising deception (althought they still love fine print).
4. generally decent components, see Dell bad for more info.
5. decent financing options.
6. decent pre production R+D

Dell Bad:
1. Proprietary components. They have a high proportion of proprietary components, making it obsolete if it fails out of warranty. Dell likes to use ATB cases and motherboards for PCs as opposed to the standard ATX design making aftermarket replacements or upgrades limited so you better buy a longer warranty or consider it disposable after 12 months. Even small components such as cooling fans or drive mounting are proprietary. Additionally, their motherboards are manufactured externally but designed internally. Often chipsets are not compatable or designed to work with each other resulting in Bios workarounds or Operating system problems. Innovative,Yes. reliable? not really.

2. Mismatched hardware configurations. Dell often advertises system configurations which are ridiculous for their intended market, such as super powerful processors on low performance boards or coupled with insufficient memory capacities. An obvious effort to increase add on sales.

3. Limited upgrade paths or customization. this goes back to point one on the bad side. Because the motherboards are proprietary, they often lack features needed for future or immediate system imporvements. For example, you may not be able to properly upgrade video as the motherboard may lack the appropriate slot for an add on card. Another example would be Ram memory slots could be limited to 1 or 2, resulting in completely replacing ram during an upgrade rather than simply adding more which means more cost.
4. Dell Is Evil. Ok maybe thats a subjective comment but I have my reasons.

MDG Good:
1. low pricing
2. Good or higher quality components with exceptions, specifically cases/power supplies.
3. Standard ATX components make repairs and upgrades easy.
4. It's Canadian, Eh!

MDG Bad:
1. Atrotious marketing practices, business practices, flagrant disregard for Canadian Consumer laws and customer satisfaction.
2. Lack of Excellence standards and a poor francising model means you will rarely get a fair shake from their retailers.
3. Poorly developed Configuration. They seem to be unaware that part A doesn't work properly when partnered with part B. They rely on the local service techs to figure it all out. Not good considering the average experience level of their local techs is 1 year or less.
4. Complete apathy in regards to system design. If a component consistently fails there is no action taken to eliminate the problem, not just within a current model but across future models. They have been useing the same case/PS combos for a decade almost even though they are designed for older systems.
5. Financing. Unlike most tier 1 manufacturers like Dell, MDG relies on Finance Companies to provide payment plans. For example, until recently Financing was provided by Wells Fargo ( no longer doing consumer financing). If you attempted financing through MDG at a local store, You no doubt paid a financing FEE. This fee often exceeded $100 and went directly to the Local MDG store as Wells Fargo had no such fee, Just 29.9% rates.

All in all I would have to say given the options of Dell or MDG, for the majority I would have to say Dell. Simply because most people have a need for service as well as the PC and MDG just can't provide that so Dell wins By default. If however you are the kind to upgrade down the road then take a chance with the MDG and provide your own service solution. At least the parts are ATX and decent. I wouldn't recomment buying a laptop from Either vendor - Dell has cheap manufacturing and MDG sells ACER which manages to combine low quality AND no support.

Now for a surprise! Suppose you are a masocist and you wanted a computer that took all of the points located in the Bad sections, put them all in one PC and charge to much for it, where would you go? Simple - SONY! Yes thats right Sony has won my "what were they thinking" award for 12 years running. Sony would, you would think, be an innovator when it comes to computers right? Wrong.
Open up any Sony PC and take a look. Its a wonderful collection of the worlds cheapest components. Motherboards by ECS and other chinese low cost manufacturers, memory by unknown chinese vendors, bottom of the barrel hard drives. In fact, usually the only decent component found would be the optical drive, made by Sony and even those are mid grade at best. Just to top it off they like to mess with the bios just to make it proprietary and they like to design add-on cards like TV tuners that are again proprietary and would never work if you ever replaced the mainboard. Typically one would lump Sony in with other Tier 1 manu's like HP, IBM or Panasonic however in this particular case, PC's, they are bit players, technically a white box manufacturer who maximizes profits by minimizing component quality. Sony does a lot of good tech, Computer just aren't it. If you are considering buying a Sony Computer, Don't - just DON"T. MDG would be a better deal. If you just have to have the same components buy an EMACHINE. You'll get the same quality for a lot less money.

The best Advice I can offer when it comes to buying a PC is this. Find a local independent technician and ask him/her to design and build a pc specific to your needs. Depending upon your specific needs or tastes, expect a maximum of 5 years use. If you have the right technician, not only will you have a computer that does exactly what you need, you will probably have a good idea as to what is inside, how upgradeable it is by design and incredible customer service.

Who am I to make these statements? I began manufacturing custom PCs in 1995 for one of the top 3 US "whitebox" retailers for their Canadian market. We produced about 20,000 units per year for canadian corporate customers by hand as well as for our own local customers. During that time we had less than a 4% failure rate and over 80% of that was attributed to Hard drive and memory failures. Around the year 2000, Dell came along and almost crushed the whitebox market, effectively driveing small assemblers like myself out of the business. Now I work independently with word of mouth as my only advertising and most of my clients have been with me many years.
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Old 2010-09-23, 08:41 AM   #2
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moved from MDG Review Thread as this is NOT a review.
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Old 2010-09-23, 08:43 AM   #3
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Who really cares what MDG costs are.

The review thread appears to be populated by people screaming about bait and switch, poor service and lousy pricing.

Your supposed defence of MDG policy really just seems to validate what our members are saying.
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Old 2010-09-23, 11:03 PM   #4
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Agreed, but holy wow - what a thorough dissertation on the "other" side of that business.
Thanks for the info!
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Old 2010-09-24, 12:05 AM   #5
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MDG is still around?
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Old 2010-09-24, 02:20 AM   #6
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I must agree that their supply model appears to be broken. Places like Ingram have always been overpriced, even for businesses and retailers. They would most likely do better by sourcing directly or buying from a well known west coast distributor. I've seen what a bad supplier can do to independent retailers and it isn't good. In any event, I wouldn't buy a PC from MDG or Dell. As stated, both cut too many corners.
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Old 2010-09-24, 09:57 PM   #7
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Default Buy local

I think anyone buying a PC should consider their local neighbourhood computer store for just these reasons, not a big box or country wide franchise operation. You get what you need for a price what you were willing to pay...As I have said many times in these forums, ask the customer to show you an ad for what their are looking at and tell them I can build you a better computer for the same price. I started buying components from Tiger Direct before they had a Canadian operation, then I went to the Toronto stores to save shipping costs as they come from the US when ordering online. In the last 3 years, I have been going to the Canada Computers on College St in Toronto to buy my components to build a PC, equal or better pricing than Tiger Direct (unfortunately had a serious fire 3 weeks ago, bummer!)...My point is that a local shop will build you a better PC and have a better warranty process that any big store with less problems getting that warranty....

I believe in buying local, I bought some pickles the other day, on the label they came from India??? Hold on, how can it be cheaper to grow them, bottle them and ship them from India then it would be to grow them here, jar them and ship them????? Makes no sense to me...LOL
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Old 2010-09-28, 08:01 PM   #8
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MDG made a killing when it used "bait and switch" tactics to sell unsuspecting folks laptops powered by "Intel Dual Core" processors whereas the customers actually thought they were buying "Intel Core 2 Duo" processors. The only reason my friend found out about the bait and switch was when we compared Vista (the OS of choice at the time) WEI scores... I had bought a comparable laptop from Dell. His scores were lagged well behind the ones from Dell and that was when I started investigating what was under the hood of his laptop.
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Old 2010-09-29, 04:23 AM   #9
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Quote:
Originally Posted by BadLag View Post
I think anyone buying a PC should consider their local neighbourhood computer store for just these reasons, not a big box or country wide franchise operation. You get what you need for a price what you were willing to pay...As I have said many times in these forums, ask the customer to show you an ad for what their are looking at and tell them I can build you a better computer for the same price. I started buying components from Tiger Direct before they had a Canadian operation, then I went to the Toronto stores to save shipping costs as they come from the US when ordering online. In the last 3 years, I have been going to the Canada Computers on College St in Toronto to buy my components to build a PC, equal or better pricing than Tiger Direct (unfortunately had a serious fire 3 weeks ago, bummer!)...My point is that a local shop will build you a better PC and have a better warranty process that any big store with less problems getting that warranty....

I believe in buying local, I bought some pickles the other day, on the label they came from India??? Hold on, how can it be cheaper to grow them, bottle them and ship them from India then it would be to grow them here, jar them and ship them????? Makes no sense to me...LOL
Local varies. I experienced good "local" in Calgary, Alberta, but would not consider any small shop within 200 miles of where I live now. FS and BB have been good to me in the last 5 years with some very decent sales.
MDG- wouldn't ever think about them anymore after doing a quick check.
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Old 2012-03-19, 09:34 AM   #10
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Default MDG WHAT!

I read the post about this company MDG...wow

Firstly price low...NO

Here is the real inside track. Lets take the xbox console. MDG charges $699 plus tax then finances it over 5 years and you end up paying about $3000. Okay finances charges and monthly payments.

The $699 is WAY OVER INFLATED. Walmart sells the EXACT, thats right EXACT same console with the EXACT same game and the EXACT same specs for $299.

The additional charge of the unit is not consistant with consumer protection laws (FAIR MARKET VALUE) the additional $400 amounts to an illegal charge governing interest.

The thread that states low prices is not a thread or advise but AN ADD driven to have customers go there

As for thier computers they are NOT HIGH END there are outdated units
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Old 2012-03-23, 09:29 PM   #11
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Why do mdg ads show up here? Just saw one. Is that google ads related?
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Old 2012-03-23, 10:20 PM   #12
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Quote:
Is that google ads related
Yes, it depends what kind of things you have been looking (releated to) in the past. Though sometimes its a just a fluke ad
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