Cazmanian_minx's new MF diary

cazmanian_minx

I would say 'Happy Friday' but I've just paid my £2900 tax bill and a £2400 import bill - with a £3200 VAT bill and £5000 of supplier payments due in the next 10 days :eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek:

I've reached the conclusion that it's absolutely ridiculous that I've reached the point where I need to be ordering £8-10k of stuff from a manufacturer at a time, but that it's tying up my cash flow for at least 3 months and have emailed my business manager at RBS to ask her what documentation I need to provide (on top of last year's accounts and a cash flow forecast) to get my overdraft increased from £5k to £10k for a year. It would really help these growing pains - because I've had £10k tied up in an order placed in October which will only be delivered next week, I haven't been able to order from other manufacturers and I've now run out of stuff from them, but it's going to be at least a month before I've got enough cash again to place another £8k-ish order and then another 3 months before the stock turns up - so that's 6 months out of stock of some best selling items and it's going to kill me dead in the water if it carries on.

The GOOD news today is that the latest batch of sample chains passed the nickel testing :j:j:j:j:j:j:j:j So I now need £6k to place an order with them (China), £5k for an order from my findings supplier (Hong Kong), £7k for a cord and suede order (India) and about £5k for some new lines from my bead wholesaler (China again).

£50 has been nibbled off the Tesco card, but that's about it for the week.

cazmanian_minx

Happy Friday! I'm feeling more on top of things this week - another £75 has disappeared from the Egg card, the VAT bill and one of the supplier bills have been paid, leaving just one £4k supplier payment to go, after which I've reached the worst possible debt point and it's all going to get better again

The bad news is that the mortgage offset has now been emptied of all the business and personal savings stashed in it, apart from £100 belonging to my husband, but hey ho, it'll build up again.

abouttimetoo

Hi Caz, well done on your latest nibbbles

I've just been catching up on your thread so belated congrats on the items that passed the nickel test, I bet you were much relieved after the energy and money you have expended so far in the search. I do wonder how many sellers would be as scrupulous as you e.g. you even tested the ones that claimed to be nickel free!

Yikes to the cashflow situation you described, forgive my ignorance as I've no idea how you stock cycle works but I'm also thinking about other things might impact you e.g. once you get say your £8k goods how long does it take for you to break even and turn into profit? What storage costs do you have? What is the cost of missed opportunties eg if your money is tied up what else might you be missing out on?

I know you have been in this a long time so I wouldn't dream of advising you but is there no way you can make the deliveries more of a 'little and often' basis to ease the cashflow?

What must be said though is a massive congratulations on being in a position to be putting those orders in in the first place, it's been amazing to see your journey from living down south and the range of jobs you used to do to you now being in that amazing place and having an ever growing business :j

Regards
ATT

cazmanian_minx

abouttimetoo wrote: »

Yikes to the cashflow situation you described, forgive my ignorance as I've no idea how you stock cycle works but I'm also thinking about other things might impact you e.g. once you get say your £8k goods how long does it take for you to break even and turn into profit? What storage costs do you have? What is the cost of missed opportunties eg if your money is tied up what else might you be missing out on?

I know you have been in this a long time so I wouldn't dream of advising you but is there no way you can make the deliveries more of a 'little and often' basis to ease the cashflow?

What must be said though is a massive congratulations on being in a position to be putting those orders in in the first place, it's been amazing to see your journey from living down south and the range of jobs you used to do to you now being in that amazing place and having an ever growing business :j

Unfortunately not, I actually need to go bigger - it's the freight costs which are the killer. It costs more or less the same (about £650) to get a £2,000 toolkit order shipped to me as it does for a £10,000 order and it would only be about an extra £300 for an entire 40 foot shipping container (to put that into perspective, a 40 foot shipping container full of this supplier's products would be a £181,000 order :eek:). Storage costs are nil for the stuff that's here at home and about £3 a month for the stuff held at Amazon. In November they were selling 50-60 a week for me until I ran out and have been ticking over at 10-15 a week of the less popular basic model for the last 6 weeks (and I'm about to run out of the silver ones of those!).

The other problem with this particular supplier is that they're not the most organised company in the world. As I said, this order was placed in October and I was told it would be ready to ship on 26th November and would arrive just before Christmas. It actually shipped on the 5th January and turned up last week, so trying to run a 'just in time' stock system with these guys would be next to impossible!

Anyway, the first batch of kits should be delivered at Amazon today and if sales do what I expect, I calculate I should break even on the shipment in about 8 weeks.

In other news, the mortgage got paid this morning and we're down to under £124,000

GDB2222

How does this work with Amazon? You send them the stuff and they store it for you and fulfil the orders? You pay them for all this, I take it?

cazmanian_minx

GDB2222 wrote: »

How does this work with Amazon? You send them the stuff and they store it for you and fulfil the orders? You pay them for all this, I take it?

Basically, yes. For a 780g jewellery making tool kit, the fulfilment charges work out as follows (taking the new prices which start next month):

Order handling fee (per order): 40p
Pick & pack (per item): 60p
Weight handling (10p per 100g, rounded up): 80p

Total: £1.80 on top of the 25% commission which I have to pay whether they dispatch it or I do. Given I can't post one of these to someone for £1.80, it's a pretty reasonable deal and it gets my listings plastered with Amazon's FREE DELIVERY logo as well as the 'order this item in the next x hours for delivery on x' count down. Storage is charged at 30p per cubic foot January to October and 40p per cubic foot November and December.

GDB2222

That sounds pretty good to me. The time spent doing all the dispatch yourself can instead be spent promoting your items and getting new lines.

25% commission sounds pretty steep compared to around 10% at ebay, though.

cazmanian_minx

GDB2222 wrote: »

25% commission sounds pretty steep compared to around 10% at ebay, though.

If you add in the PayPal fees it works out about the same - my average item sells for £3 or £4 and PayPal takes 20p+2.9%. The toolkits sell FAR better on Amazon for some reason - about 20 a week at the moment, against about 5 a month on eBay!

Another Friday rolls around and there's not much change to report. I've had to dip into the overdraft - I didn't dare pay myself last week in case the tool kit supplier wanted their second payment (they did, but I've asked their accounts department to adjust the invoice for some missing items and they haven't got back to me yet), but I've been able to add half that skipped payment onto today's drawings and will hopefully be able to add the other half on next week to get back up to speed.

I seem to have an awful lot of expenses coming up this month. The new roof for Merlin's field shelter has suffered one of Mr Minx's infamous 'project creeps', so instead of 'Oh it'll be about £100', he's just presented me with a materials bill for £225. I need to book the ferry for my week away with Mum and my cousin, which will be about £120, and the car tax is due at the end of the month. According to YNAB I do indeed have £132 in the car tax pot, but it hasn't physically been stuck aside anywhere.

So although my forward planner is showing a current account surplus of £412.85 at the end of the month (that's before food shopping), it's actually going to be pretty much flatlined again. It's a free listing weekend on eBay so I think I'm going to clean up Merlin's saddle and sell it - it doesn't fit him any more, he's changed shape so much, and I should be able to get about £100 for it looking at past sales.

cazmanian_minx

Another Friday rolls around and the last of the big supplier payments has disappeared from the business account - I am now more broke than I've ever been in my entire life! That's the reason the current account balance is in the red on my 'Other debt' post, if I'd been able to pay myself normally this month it would have been £100 in the black.

Still, non-mortgage personal debt (excluding the overdraft) is now down to under £9k Only 9 payments left on my teeth, so it really feels like I'm on the final countdown with that one! I've been listing new stock like a demon and Mr Minx is away this weekend so I'll probably spend most of it working.

I'll be honest, the business is struggling at the moment and it's my own stupid fault, but I'm not going to go under without one hell of a fight. How galling would it be to survive the recession (I had my best year ever 2010/11 tax year) only to fail now?

gallygirl

Sorry to hear things are not going well? What has changed, as it was going great guns? Have you branched out into new products, or has the market just moved?