How to start up business

lincroft1710

Many items in shops are 100% mark up. If you compete with online you can only have 50% mark up. So if you've only £5 to play with and your costs are £1K pw, you need to sell 200 pw.

So the obvious answer would be to stock a second and even third possibly even a fourth line. But can you find something which would sit comfortably with your main line.

Unless these items are loss leaders online sellers have to be making a profit. If you can't source these items cheaper I think you'd be wasting your time in trying to make this a profitable business.

Flyonthewall

lincroft1710 wrote: »

Many items in shops are 100% mark up. If you compete with online you can only have 50% mark up. So if you've only £5 to play with and your costs are £1K pw, you need to sell 200 pw.

So the obvious answer would be to stock a second and even third possibly even a fourth line. But can you find something which would sit comfortably with your main line.

Unless these items are loss leaders online sellers have to be making a profit. If you can't source these items cheaper I think you'd be wasting your time in trying to make this a profitable business.

I am going to sell other items too.

FatVonD

Flyonthewall wrote: »

Ok, let's say I could buy an item for £10 and sell it for £15.

Online others are selling for £15 with free postage.

The postage costs £5 and there's 10% fees (to keep it simple).

Ignoring other costs that is £5 profit on one item. With them costs that profit is eaten up with postage, then I have 10% fees too.

Even with the postage being half at £2.50 the fees would be £1.50 so that is £4 costs, which if I could manage that would be £1 profit. So yes, that would work but as of yet I have not thought of a way to get the postage cheap enough aside from a postage discount from selling loads. Not sure if it would be that much cheaper though?

Now in a shop, say I have £1000 costs a week. Yes that is far more. I get it.

However, for each item I make £5 through buying at £10 and selling at £15. So if I sell enough I could make a profit.

I am well aware that I may not sell enough and could still be making a loss but I at least have a hope of selling more to get a profit rather than selling online at a guaranteed loss (unless, once again, I can get postage cheaper) each time.

But you would have to sell 200 per week, every week, just to break even. You would still have costs whether you were selling anything or not.

If you sold 200 per week online making only £1 profit on each you would be making £200 per week profit.

If you sold 200 from a stall at a collectors fair related to the object you would make £1,000 profit (less the cost of the stall.)


I can see the lure of bricks and mortar, I made the same mistake a couple of years ago. I set up a 'make your own music v1deo' business. I had excellent advice on here to rent premises as and when I needed it and tote around a green screen backdrop which I ignored.

I wanted the dream studio with lights around the mirrors and tried to run before I could walk. Had I taken the advice on here and just rented space whenever I needed it I'd have been making £250 - £500 profit each month in the first year and possibly more by now. With all the costs of renting premises I made losses of £300 - £700 per month and we closed the business after a year.

Listen to the people here, they know what they're talking about.

Flyonthewall

FatVonD wrote: »

But you would have to sell 200 per week, every week, just to break even. You would still have costs whether you were selling anything or not.

If you sold 200 per week online making only £1 profit on each you would be making £200 per week profit.

If you sold 200 from a stall at a collectors fair related to the object you would make £1,000 profit (less the cost of the stall.)


I can see the lure of bricks and mortar, I made the same mistake a couple of years ago. I set up a 'make your own music v1deo' business. I had excellent advice on here to rent premises as and when I needed it and tote around a green screen backdrop which I ignored.

I wanted the dream studio with lights around the mirrors and tried to run before I could walk. Had I taken the advice on here and just rented space whenever I needed it I'd have been making £250 - £500 profit each month in the first year and possibly more by now. With all the costs of renting premises I made losses of £300 - £700 per month and we closed the business after a year.

Listen to the people here, they know what they're talking about.

I know. Prices were an example plus I would be selling other items.

Being on the computer and selling online from home - that I like the idea of. Having to go out to a store everyday...not so much. But so far items online means a loss until I work stuff out and a store has a chance of a profit if I can get the right place and items. So I'm considering all options.

I'm not going to rush out and buy a store. I asked if it were possible to get funding for a shop with no money and then I planned on seeing what items I could get at what costs and what I could sell online, sell instore and basically what would work.

FatVonD

Well, it would seem the answer is no regarding funding for a shop.

Do you have one of these items to hand? Why not weigh it and give the dimensions then ask over on the ebay board for the best way to post items of that size and weight in bulk?

As ebay sellers themselves they won't expect you to divulge what you're selling but they will know the cheapest ways for sure!

FatVonD

PS I'm guessing some kind of anime figurines!

Flyonthewall

FatVonD wrote: »

Well, it would seem the answer is no regarding funding for a shop.

Do you have one of these items to hand? Why not weigh it and give the dimensions then ask over on the ebay board for the best way to post items of that size and weight in bulk?

As ebay sellers themselves they won't expect you to divulge what you're selling but they will know the cheapest ways for sure!

I know But this thread appears never ending...

Nope. But I know they're going to be at least a small parcel if not a medium parcel through Royal Mail. They vary in size and weight.

Possibly, but I do plan on looking into all that

paulwf

To answer the original question about funding...grants are rare these days but I think they still exist from time to time. However they are usually for £500 here and there, basically a way for organisations to pay lip service to kickstarting the local economy. Absolutely fantastic if you need to buy a hoover, cleaning materials and some branded polo shirts to start a cleaning business but it won't even cover the commercial survey fees let alone get the shop open.

With banks the simple rule of thumb is you need to put in 1/3 up front and have security to back up the 2/3 loan. The more you can put in the better the chance of getting the loan. A lot of posts have said to do a trial online or at a market to develop a solid business plan, but unless you are putting in a lot of your own cash upfront the bank won't even look at your plan.

I haven't seen any discussion yet - probably because we don't know what the product is - of any issues of competitors. If your business is doing well some muppet down the road will try to get hold of what you are stocking, just stock the top 10 products and try and cream off some business. I've been lucky enough to work for or own the leading brand in various sectors and every single time competitors pop up and try to undercut with an inferior product. They don't usually succeed but then the next one comes along and so on. You either need a restricted supply or something special to stop another business stocking the most profitable items at a reduced price.

Flyonthewall

paulwf wrote: »

To answer the original question about funding...grants are rare these days but I think they still exist from time to time. However they are usually for £500 here and there, basically a way for organisations to pay lip service to kickstarting the local economy. Absolutely fantastic if you need to buy a hoover, cleaning materials and some branded polo shirts to start a cleaning business but it won't even cover the commercial survey fees let alone get the shop open.

With banks the simple rule of thumb is you need to put in 1/3 up front and have security to back up the 2/3 loan. The more you can put in the better the chance of getting the loan. A lot of posts have said to do a trial online or at a market to develop a solid business plan, but unless you are putting in a lot of your own cash upfront the bank won't even look at your plan.

I haven't seen any discussion yet - probably because we don't know what the product is - of any issues of competitors. If your business is doing well some muppet down the road will try to get hold of what you are stocking, just stock the top 10 products and try and cream off some business. I've been lucky enough to work for or own the leading brand in various sectors and every single time competitors pop up and try to undercut with an inferior product. They don't usually succeed but then the next one comes along and so on. You either need a restricted supply or something special to stop another business stocking the most profitable items at a reduced price.

Thanks. Sadly I wouldn't have any money to put in upfront so I'm not likely to get a loan.

No one else is really selling the items and I can't think of any shops that would be likely to try and stock the same items.

motorguy

I dont understand why you're still pursuing this idea when clearly it isnt viable.

Can you sell it online? No, as there are other people selling it for less than you can whilst making a profit.

Can you sell it in a shop? Yes, but you'd have to sell a load of them every week just to break even, which equals high risk.

Have you the money to open a shop? No.

Can you borrow the money to open a shop? No.

Are there grants available of the magnitude required to open a shop? No.

Is there a family member / friend who will invest in the business? No.

This idea has no legs at all. Move on to another idea.