new business

Metalface Mark said:
It doesn't necessarily mean that drop shipping would lead to a reduced margin, it makes no difference to my suppliers if I buy 1 item and have them send it straight to my customer or 20 items up front, the discounts are the same, the only difference is reduced carriage for more items.
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Depends on the market really - you sell a few (I don't mean that negatively, just comparing business models) big expensive things, he is presumably going to be selling a lot of small cheap things. Your supplier will presumably happily ship a £2000 product anywhere you want. His might be less likely to want to send 2000 £1 products to 2000 different addresses..
 
[TW]Fox;20780133 said:
But you are trading risk for a reduced profit.

As with all things, the higher the risk, the higher the reward. Anything you can do to reduce risk in the early stages of a new venture is a good thing.

The other thing to remember is that almost zero new businesses make any real profit in the first few years. At the early stage its all about building a sustainable base rather than making a pile of cash in the first year, two years or whatever.

Perhaps the reduced profit margin offered by dropshipping might enable you to guage a practical knowledge of exactly what the level of demand is - something you can build on when you decide to move into stockholding yourself having actual real sales figures to back up any decisions you make.
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I looked into dropshipping to sell laptops. Got in contact with someone at a site called pcdropsbipper.... Or something like that (will try to find link). Anyway after comparing their prices with the with the prices in other online stores it just wasn't feasible. For some products there was no profit to be made... I'd just be helping them to clear stock.

But as I said perhaps I got with the co.
 
One thing my friend told me (who sells electronics), is that the prices at some big online e-tailors are sometimes lower than the prices he can buy items at wholesale.

It actually makes sense for him to buy items, retail (from big e-tailors) and then re-sell them.

The problem here is that the big e-tailors have so much buying power, they can secure great discounts and can basically beat the smaller e-tailors into the ground. Personally, selling electronics online, is a mugs game, unless you can really shift big volume. However, this is just my opinion (other people might be able to make a success out of it).

Anyone wanting to enter the electronics retail market should perhaps first sell on ebay (where startup costs are low and selling is generally much easier) just to get an idea of what they are up against.
 
sunama said:
One thing my friend told me (who sells electronics), is that the prices at some big online e-tailors are sometimes lower than the prices he can buy items at wholesale.

It actually makes sense for him to buy items, retail (from big e-tailors) and then re-sell them.

The problem here is that the big e-tailors have so much buying power, they can secure great discounts and can basically beat the smaller e-tailors into the ground. Personally, selling electronics online, is a mugs game, unless you can really shift big volume. However, this is just my opinion (other people might be able to make a success out of it).

Anyone wanting to enter the electronics retail market should perhaps first sell on ebay (where startup costs are low and selling is generally much easier) just to get an idea of what they are up against.
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It definitely isn't a route I'll consider taking again.
 
Some things I learnt along the way when I started my small business:-

Get the startup money from family, or take out a personal loan. Do NOT go to the bank regards a small business venture.

Use Google Adwords if you can afford it (budget for plenty of marketing).

Use Ebay if possible.

Gain a good reputation - you will not be able to compete in price BUT you will be able to offer superior customer service. Focus on keeping your customer base happy.

Remember that most people will always buy the cheapest, no matter what service you offer, don't take it to heart.

Try and offer free postage - this really helps boost sales, but it will have an impact. Budget for this.

Also one important thing. Do NOT get yourself a fancy accountant. Try and balance the books yourself or find a reputable book-keeper locally. I learnt this lesson the hard way.
 
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philstanbridge said:
Also one important thing. Do NOT get yourself a fancy accountant. Try and balance the books yourself or find a reputable book-keeper locally. I learnt this lesson the hard way.
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Being an accountant Im somewhat biased obviously, but I can pretty much guarantee you that most decent accountants could save you a lot more than the fee you pay them whether it be advice on the correct legal entity your business should be set up at as or more advanced tax advice.

I see it all the time and it costs most people a lot more than they would have paid me to do it correctly the first time.

I would say you should avoid the larger firms where you are paying for the partners to be out "networking" on the golf course on a daily basis.
 
Mark M said:
Being an accountant Im somewhat biased obviously, but I can pretty much guarantee you that most decent accountants could save you a lot more than the fee you pay them whether it be advice on the correct legal entity your business should be set up at as or more advanced tax advice.

I see it all the time and it costs most people a lot more than they would have paid me to do it correctly the first time.

I would say you should avoid the larger firms where you are paying for the partners to be out "networking" on the golf course on a daily basis.
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this. get an accountant and let them handle certain things.
 
sunama said:
Does the recommendation about an accountant, apply to new start ups who are earning little no money?
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It depends on quite just how little I suppose but it is probably worth while as if you are creating losses in the first couple of years these can be offset against future profits and knowing what to claim can increase these losses so you pay less tax in the years where you are making money.

Most accountants are happy to have a free initial meeting where they will also give you a fixed price for the work so you know exactly how much its going to cost.
 
Mark M said:
It depends on quite just how little I suppose but it is probably worth while as if you are creating losses in the first couple of years these can be offset against future profits and knowing what to claim can increase these losses so you pay less tax in the years where you are making money.

Most accountants are happy to have a free initial meeting where they will also give you a fixed price for the work so you know exactly how much its going to cost.
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Yup, took me 2 goes. First one was a cheapy accountant, but was absolutly hopeless. Didn't actually do anything for me. Repeated requests only rarely got any sort of reply. Binned the bugger and got a recommendation from a local shop. Now all I do is the books, soon to start doing VAT returns, and they do everything else. Including my personal tax returns.
 
What have you guys done to advertise your businesses?

How much would it cost to occupy a reasonable area (on a page) in a magazine?
 
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Was thinking more men's magazines.

Will no doubt cost both arms and a leg. Need to know though
 
i don't think you're jumping the gun by doing research, that's the correct thing to do. a magazine advert may be fine a little later down the line, i thought you may be taking one out straight away? a better port of call would be a local paper to start.
 
I get emails from observer magazine (the magazine which goes in observer newspaper, on the weekends) and the email suggests that you would be paying somewhere in the region of £500-£1k.

For a national mens magazine, such as FHM, you are going to pay a heck of a lot more.

As a start up with limited funds, you need to be careful. The cheapest place to advertise is Google, Facebook, Microsoft search engines (which I believe, includes Yahoo). Online is cheapest.

If you really want to know the exact costs, just call up whatever magazine you are interested in and ask them...very simple.

OP, originally, you were talking about a budget of £5k (which is very little). Are you still trying to get things done within that budget or have you changed the budget?
 
sunama said:
I get emails from observer magazine (the magazine which goes in observer newspaper, on the weekends) and the email suggests that you would be paying somewhere in the region of £500-£1k.

For a national mens magazine, such as FHM, you are going to pay a heck of a lot more.

As a start up with limited funds, you need to be careful. The cheapest place to advertise is Google, Facebook, Microsoft search engines (which I believe, includes Yahoo). Online is cheapest.

If you really want to know the exact costs, just call up whatever magazine you are interested in and ask them...very simple.

OP, originally, you were talking about a budget of £5k (which is very little). Are you still trying to get things done within that budget or have you changed the budget?
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You're both right local paper is the best place to start. I've just checked out the men's health magazine prices........ Feel free to download their price pack on their website.

As for the budget... You're right, isnt much. Will have to make it work.... Perhaps even find some more money to throw into the pot
 
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