Shops

[bigbaddom]

I have been thinking about starting up a shop.
I have made contact with a few suppliers and companies, yet no one has replied. Does anyone have any useful info on what suppliers or distributers need to know before they would supply products to you.
The shop would be internet based and I would then send products out to customers or they could collect.
Any info would be much apreciated.
Thanks Dom

[simpo two]

bigbaddom said:

Does anyone have any useful info on what suppliers or distributers need to know before they would supply products to you.

Some will sell to anyone; others are fussier. Basically they want to know that you will shift their product, and the more, the better. However, as a start-up company, they are unlikely to give you credit - so you may have to pay up front.

My main thought is that you seem awfully vague to be going into this kind of venture. Practice selling it to us before trying the suppliers. At the moment you don't have me reaching for my wallet

[bigbaddom]

Ok sorry, the reason I was vague was because I wasnt exactly sure what I wanted to know and if anyone on the board would know.
I am thinking about starting a kayaking web based shop. The reason for this is that I have been a keen kayaker for eight years now (almost half my life) and so far the service I have recieved from existing shops has been awful, up to the point of them taking an order and then cancelling it without any contact. I only found out the order was cancelled when I recieved my bank statement to query why the deposit had not been taken.
Anyway I digress. I feel that I am able to supply the majority of the kayaking public as I am an active member of the three most promanant kayak based forums. The shop will be web based as I feel this is how I will be able to reach the widest customer range. I have a substantial amount of finances in place, and the web site will be designed as soon as I know if the suppliers are willing to participate in such an idea.
So is there anything else apart from finance that I will need to show is in place. When the suppliers are more picky, I know it will vary, but what do they tend to ask for?
Thanks Dom

[insurance_jon]

Proof that their is some logical thinking behind your business behind your business plan, (reverse engineering ), but the person you really have to convince is you!

happy new year!

[bigbaddom]

Sorry, new to this.
I am sure it will work, but only if the supplier decides to let me sell their products. If I dont have anything to sell then it wont work.
So I need to approach the supplier saying that "I am opening at kayak shop and would be interested in selling you products. Here are the details...". Is that the correct mentality rather than saying "I would like to.... Would you be interested...." etc.
Thanks for any help.

[bigbaddom]

Sorry missed a bit, how do I show them I have finance for this venture? And if nobody minds saying, how much money would be sufficient? Obviously this depends on the costs of the products, and if credit is granted. But what start up costs can people forsee? Do companies usualy require a minimum initial purchase? Or one off membership fee. Etc. What is the general cost of products? Half retail?
Thanks again

[Wacky Racer]

Word of advice.....

I have run a very profitable wholesale/retail sports business for close on 25 years now, and I have lost count of the number of people who have opened up similar businesses just because they were ex-footballers, rugby players etc, only to close down, owing thousands after several months/years.......

Just because you are interested in a subject does not mean you can make a viable business out of it, although obviously it helps.....

My main advice, as with any business is try to keep EXPENSES down to the absolute minimum, especially in the first few years, as these can cripple even the best firms......

Good luck with your venture....

[bigbaddom]

Thanks wacky racer, I hope that mine will last a fair while. For this reason exactly I am thinking of keeping it web based. Obviously there are still costs, but are substantially less than renting a shop. If you dont mind me asking what does your shop specialize in?
Dom

[simpo two]

bigbaddom said:

So I need to approach the supplier saying that "I am opening at kayak shop and would be interested in selling you products.

Getting warmer! You have this great new sales opportunity and you are offering THEM a chance to be part of it. You can't promise them 1,000 sales a year but if they sign up they will get *some*. If they don't sign up (supply you) they'll sell zero.

bigbaddom said:

Sorry missed a bit, how do I show them I have finance for this venture? And if nobody minds saying, how much money would be sufficient? Obviously this depends on the costs of the products, and if credit is granted. But what start up costs can people forsee? Do companies usualy require a minimum initial purchase? Or one off membership fee. Etc. What is the general cost of products? Half retail? Thanks again

All these Qs depend on the nature of the goods and the supplier. You wil probably have to ring up the major players, ask for 'sales' and explain to them what you're doing (in the bounciest manner possible). These guys are salesmen too, so the prospect of a new customer who wants to buy stuff is usually exciting for them.
If the products are small/cheap you could consider holding stock, but that is your risk. As the products get bigger/more expensive (eg a whole kayak) you might be better to consider just buying to order on a one-off basis. Dunno, it's not my market - you'll just have to ask them what the options are. Most companies are happy taking credit card payment (which gives you 30+ days to pay anyway, plus they're happy as they get the loot). As things grow, you might prefer to open a trading account, but that will need a trading history or trade references, neither of which you currently have.
If you buy goods to order, you don't need vast reserves of cash (only to live on). You're not borrowing money, so proof of financial viability is not so important. Suppliers are only interested in (1) getting paid (2) shifting product.
If you are working from home and trading over the internet, you can not only keep overheads down, but make your business is bigger than it really is.
After that, it's mostly a question of watching cashflow and getting business, IMO.
In its simplest terms you are simply a reseller, buying a box for £1 and selling it for £2. You have to do your own sales and marketing and provide the service your customers want. And whether it's kayaks, plasma screens or boxes of fish, that concept is the same.
Any help?

[Wacky Racer]

bigbaddom said:

Thanks wacky racer, I hope that mine will last a fair while. For this reason exactly I am thinking of keeping it web based. Obviously there are still costs, but are substantially less than renting a shop. If you dont mind me asking what does your shop specialize in? Dom

Hi Dom,

I try to stock most things, except Skiing, cycling and Fishing equipment, which really is too specialised, and I definitely stay away from fashion wear, Clothing and trainers.....

So, Air guns and pistols, Archery, Bowls, Badminton, Cricket, Football, Darts,Netball, Basketball, Squash, Tennis, Weight training, Volleyball, Swimming, Rugby, Snooker/pool, Boxing, Martial arts, Hockey etc etc.....................

[Size Nine Elm]

It sounds to me like you really haven't thought about this very much.

You like Kayaking, and have access to potential customers.
You think existing suppliers don't give good service.

Fine.

What suppliers are you going to use. What are your costs of sale. What are your overheads. What are the costs of a web outlet - design and operation? What will your turnover be? What are your margins? Can you make a living out of this?

Until you can answer these questions, you are doomed to fail on a nice fluffy idea.

Do some reading on business plans - local 'enterprise' organisations can help. At least put together your first year's expected figures.

Edited to add: this sounds a little harsh, but you do need to do a lot more planning...

>> Edited by Size Nine Elm on Monday 27th December 13:06

[Size Nine Elm]

[redacted]

[simpo two]

I'm going to back the 'little guy'. I started my self-employment in 1991, I didn't need to borrow money and certainly didn't have a business plan. However, I DID have savings and I DID know my market inside out and back to front, and equally important, my place in it, and what I could offer that the rivals didn't. That was my USP (unique selling point), and you really need to think of one. You need an answer to 'Why should I buy my kayak from you and not this other place that's £10 cheaper?'

I am not a conventional person, and to me a business plan is a work of fiction designed to fool bank managers into giving you a loan. How on earth can anyone meaningfully predict how many kayaks etc he will sell in Year One? Just sell as many as you can; you can't do any better than that.
So - you don't need a bank loan. That's good news, because it puts YOU in charge of everything you do. And if you think you've got the fire and determination it takes, I certainly wouldn't waste time talking to 'Enterprise Councillors' who are at best washed-up businessmen and at worst, mediocre civil servants who couldn't run a bath, let alone a business in the real world. (Your local Council may run business exhibitions for new businesses though - if it's free, you may as well have one).
All the above may be wrong of course, but that's my personal view. It worked for me, but you are not me
I would suggest that you draw up a list of everything you can think of that could possibly go wrong - and then think of answers to them.

[simpo two]

Size Nine Elm said:

simpo two said: You can't promise them 1,000 sales a year but if they sign up they will get *some*. If they don't sign up (supply you) they'll sell zero. Not necessarily true. I can't imagine kayaking is a huge market. All you may be doing is potentially transferring sales from an existing outlet to yours. How is this better for the supplier? Will you expand the market?

But does it matter? Tell them you're much nicer to deal with and will pay your bills faster. Ultimately you want to get your hands on the products they sell: do what you need to. I've rarely had problems opening accounts with new suppliers: the 20-something sales bod is only too happy to get another customer. He has targets to meet; you say you can help him meet them.
Oops - we're entering the bluffing zone! But you need to comfortable there.
When I wanted to get a Nikon D70 at trade price, I found the distributor and told them I normally sold AV stuff (true), but had a customer who'd asked if I could supply Nikon (not quite true), and could they help me? Bingo: another product line open. Mostly they need to see that you are a reseller and not end-user: a website and letterhead usually suffice.

(Note: unfortunately in this case it was of limited value because I could not buy at a price which allowed me to compete with the big internet places. However, the concept remains valid.)

[Phil Dicky]

simpo two said:

I'm going to back the 'little guy'. I started my self-employment in 1991, I didn't need to borrow money and certainly didn't have a business plan. However, I DID have savings and I DID know my market inside out and back to front, and equally important, my place in it, and what I could offer that the rivals didn't. That was my USP (unique selling point), and you really need to think of one. You need an answer to 'Why should I buy my kayak from you and not this other place that's £10 cheaper?' I am not a conventional person, and to me a business plan is a work of fiction designed to fool bank managers into giving you a loan. How on earth can anyone meaningfully predict how many kayaks etc he will sell in Year One? Just sell as many as you can; you can't do any better than that. So - you don't need a bank loan. That's good news, because it puts YOU in charge of everything you do. And if you think you've got the fire and determination it takes, I certainly wouldn't waste time talking to 'Enterprise Councillors' who are at best washed-up businessmen and at worst, mediocre civil servants who couldn't run a bath, let alone a business in the real world. (Your local Council may run business exhibitions for new businesses though - if it's free, you may as well have one). All the above may be wrong of course, but that's my personal view. It worked for me, but you are not me I would suggest that you draw up a list of everything you can think of that could possibly go wrong - and then think of answers to them.

I'd agree the USP is vital in a new business, what can you provide your customers that your competitors can't?You need to think of a hook that will steer customers to you.

As regards a business plan, I would definatly do one, if only for your own information. It will force you to consider your market place, costs and associated running expenses.

Also speak to your bank manager and find out if they are willing to assist in any way. I know you have finances in place but you will need a business sccount.

Phil

[bigbaddom]

Thanks for the replies so far, please keep them coming. The cost of the website design is nil, as my mum is doing it. Hosting? I really dont know, but cant see it being more than £50 a month. Maybe Im completly wrong (please set me straight. A price per mb? If it is done that way? or amount of views etc? dont know). I have no problems with ordering stock, as I have plenty of space. I will be working from home, on a computer I already own. I will have a seperate phone line with answering phone (line £10 a month unlimited calls. Phone £30). It is difficult to have a cash flow forcast if I dont know the %'s involved. What is wholesale price compared to retail. I presumed from my experience in a tennis shop that wholesale is about 40% less.
The biggest downfall I can see. Is having stock that doesnt sell, but surely I can reduce the cost and sell it. Even if it does mean me selling it at what I bought it for or less. Meaning I loss some money. I will have no staff = no wages. No business premesis = no rent or morgage.
Any other pitfalls anyone can think of would be of great help. Can anyone recomend a website host, so I can get some idea of costs. And maybe I should look for some postage companies so I can see how much it will cost to send each item. The biggest problem I can see, is getting the suppliers to let me have stock.
Or am I being ignorant?
Please keep all the comments coming, from info to support, to critiscism. Thanks, Dom

[bigbaddom]

Sorry Size nine elm. When i previously said suppliers I meant existing retail outlets. I apologise. Im getting confused between suppliers retailers outelets. etc...
Sorry. thanks, dom

[bigbaddom]

Sorry for adding so many posts, should have just edited, my USP will be that it is cheaper, quicker, and more convinient. The main thing that existing kayakers tend to yearn for is reasonable prices. The items will also be delivered. How many people do you know who have a car big enough for a kayak?
So if I have a website and letterhead, and as long as I dont require credit, that should be enough to get started. Thanks again. Dom

[simpo two]

bigbaddom said:

Hosting? I really dont know, but cant see it being more than £50 a month.

I use 123-reg: 200Mb for about £45 a year, a bit more if you need frills. However, if you plan to do e-commerce, that changes things completely. I would avoid that for now.

bigbaddom said:

What is wholesale price compared to retail. I presumed from my experience in a tennis shop that wholesale is about 40% less.

Depends entirely on what you can negotiate with your suppliers. However, as you can't promise big volumes you'll probably be on the least discounted rate. This can spoil your fun if a big competitor can buy kayaks for less than you can!

bigbaddom said:

The biggest downfall I can see. Is having stock that doesnt sell, but surely I can reduce the cost and sell it. Even if it does mean me selling it at what I bought it for or less. Meaning I loss some money.

That seems like a good way to go bankrupt - and you can do that much more easily without working for it. Don't rush into buying anything you don't need or don't have orders for. As the business evolves you will know what's worth keeping in stock and what isn't. But don't get starry-eyed buying stuff just for the hell of it.

bigbaddom said:

And maybe I should look for some postage companies so I can see how much it will cost to send each item.

Good question, as you've said you'll deliver! You'll need a courier for big stuff - better open an account with one you trust.

bigbaddom said:

Sorry for adding so many posts, should have just edited, my USP will be that it is cheaper, quicker, and more convinient.

Cheaper could be tricky if your rivals get a bigger buying discount than you do. Quicker - I don't believe it's feasible to hold stocks of one of every kind of kayak; you will have to order on demand. So if your rival has a warehouse-full ready to ship, again you lose.

bigbaddom said:

So if I have a website and letterhead, and as long as I dont require credit, that should be enough to get started.

I've found the website a very good way to be taken seriously by suppliers when you're asking for an account - it shows them you're not a private buyer trying it on. Get your stationery professionally designed and printed, and use a trading name to mask the fact you're a dining table jockey. You would be a Sole Proprietor and your accounts would show '(yourname) Trading As XXXXXX'. If you have a few K to start with, Investec Bank (UK) Ltd has an excellent account which pays interest, doesn't levy any charges and allows BACS, CHAPS and payments from overseas.
You'll need a book-keeper or accountant to show you how to set up the books and keep business money seperate from private money.
One other thing: you should consider registering voluntarily for VAT, if for no other reason than you will have to pay it on your purchases. If you can't reclaim it, you lose a big slice of any margin. If margins are so big that you can sell without VAT (ie simply absorb the cost) that will be a big advantage to your sales as you prices will be 15% less than the rivals - BUT your profit will take a hammering which might be terminal.

>> Edited by simpo two on Monday 27th December 19:10

[superlightr]

simpo two said:

When I wanted to get a Nikon D70 at trade price, I found the distributor and told them I normally sold AV stuff (true), but had a customer who'd asked if I could supply Nikon (not quite true), and could they help me? Bingo: another product line open. Mostly they need to see that you are a reseller and not end-user: a website and letterhead usually suffice. (Note: unfortunately in this case it was of limited value because I could not buy at a price which allowed me to compete with the big internet places. However, the concept remains valid.)

Whats a trade price for aD70 then?