Setting up a toy business and finding branded suppliers

Toyhaven · 4 June 2019 at 7:52PM

I have talked to a big national company that is willing to fulfill my orders for branded children’s toys when they come in. The person I talked to said that they require a commitment of £100k turnover during a 12 month window.

I said I think we will more than clear that in 12 months. Which, I know it will be tough but I think we can do it. Am I being delusional?

He is now asking for me to share more about my website. How long it’s been active, URL, turnover etc?

I don't know what to do as I am just starting my business. I am in the process of setting up my website. Do I wait until it's ready to go live? Do I tell him we are just starting up? Will that scare him and make him run away? What about turnover? Do I do an estimated one, wait for some orders or lie about it? Or can I not really do that? What that be fraud? With the products I can get through this deal I think I will clear the 100k mark a year.

As I haven't started my business yet I haven't registered my business yet. I live in the UK and this would be a trade deal for the uk. Do I need to register my business before I open it? Is registering your business than registering with the whole VAT thing? When do I start paying VAT in the uk?

He wants my company details to run an Experian Credit Check to open an account. What information does he need for this? What will show up?

I don't know why he wants to do a check as I was going to pay each time I get an order.

soolin · 4 June 2019 at 8:03PM

Toyhaven wrote: »

I have talked to a big national company that is willing to fulfill my orders for branded children’s toys when they come in. The person I talked to said that they require a commitment of £100k turnover during a 12 month window.

I said I think we will more than clear that in 12 months. Which, I know it will be tough but I think we can do it. Am I being delusional?

He is now asking for me to share more about my website. How long it’s been active, URL, turnover etc?

I don't know what to do as I am just starting my business. I am in the process of setting up my website. Do I wait until it's ready to go live? Do I tell him we are just starting up? Will that scare him and make him run away? What about turnover? Do I do an estimated one, wait for some orders or lie about it? Or can I not really do that? What that be fraud? With the products I can get through this deal I think I will clear the 100k mark a year.

As I haven't started my business yet I haven't registered my business yet. I live in the UK and this would be a trade deal for the uk. Do I need to register my business before I open it? Is registering your business than registering with the whole VAT thing? When do I start paying VAT in the uk?

He wants my company details to run an Experian Credit Check to open an account. What information does he need for this? What will show up?

I don't know why he wants to do a check as I was going to pay each time I get an order.

That's an awful lot of questions for someone about to commit to 100k a year with one supplier. Do you have an accountant yet, can they help answer at least some of your questions about registration and VAT?

You say you are sure the 100k a year isn't going to be a problem, do you have a proper business plan that supports that, or are you guessing?

You might want to wait for others to advise, but from your questions and position I don't see that you are in any position to make a firm commitment with a supplier. The moment they search for your business it will become obvious that you don't have a business , you are not going to be able to fool anyone doing even the most basic search. Do you have a confirmed market and an advertising strategy , you cannot just set up a website list items and expect orders to flood in, why would anyone buy from you when they could buy from Amazon for instance, what's your unique USP? Have you set up a payment system, have you worked out all your costs, shipping postage, packaging etc and have you allowed for change of mind returns as required by U.K. Law, that's all expenses you need to build into your business plan.

00ec25 · 4 June 2019 at 9:38PM

sounds like big plans based on great ignorance and much hoping

a supplier who has not done their due diligence on your "business" and found out you do not yet have one is hardly a great advert on how to interact with potential customers ether.

you state you will have 100k t/o yet don't know the first thing about VAT. Oh dear.

Mistral001 · 5 June 2019 at 12:09AM

Toyhaven wrote: »

I said I think we will more than clear that in 12 months. Which, I know it will be tough but I think we can do it. Am I being delusional?

You are being delusional about expecting a supplier of branded goods to supply when you have zero track record and all you can offer is nothing more than hopes and promises .

Anybody can set up a website, register for VAT, and form a Ltd company. It only takes a few hundred pounds. Many people do just that and make peanuts or fail in the first year leaving suppliers as unpaid creditors. Suppliers will be aware of this and will want to have firm evidence of actual sales.

molerat · 5 June 2019 at 8:57AM

How much of your own money are you putting into stocking this business rather than relying on supplier credit ?

bris · 14 June 2019 at 9:04PM

It sounds like a type of drop shipping. What will you do with all the returns you will get? Will your supplier take them back?

You will find the supplier will not want the change of mind returns and you will be lumbered with them.

It's not going to be easy, Amazon, Ebay etc do it better and cheaper than anyone so your profit margin will be wafer thin, and that's is there even is a profit margin.

You will find to your disbelief that some sellers can sell these toys cheaper than you can source them from this supplier.

motorguy · 16 June 2019 at 8:47PM

00ec25 wrote: »

sounds like big plans based on great ignorance and much hoping

Whilst this sounds harsh, i think it may be the case.

Selling nigh on £10,000 of toys on average each month is a massive ask from a standing start and unless you have an awful lot of knowledge you're not telling us here, sounds somewhat naive.

sparkermarketing · 19 June 2019 at 1:09PM

Too many questions....

Is this £100k at wholesale price, or retail price?
How will you survive when probably over 50% of your sales will be in Nov/Dec?
How many employees will you have to manage all the shipping, logistics and customer service?
How will you deal with returns? Who will cover the cost of this?
How much warehouse capacity do you have?
Have you built in the cost of warehouse and staff to your business plan?
Where are you selling the products? If selling on your own website, how will you get people to find your store and buy from you? If selling on ebay/amazon, how will you differentiate from the hundreds of other people selling the same as you?
Who is going to underwrite the supplier credit?
What happens if/when you don't hit your quota with the supplier?

Unless you can answer any of these questions, then you dont have a business.

If this wholesaler wont supply you then you need to start smaller. FInd a supplier who will give you a small order that you pay for upfront. Sell that stock and re-order and build up your cash reserves.

Rainbowgirl84 · 19 June 2019 at 4:58PM

OP joined on 4 June, posted on 4 June and hasn't logged on since. Strange.

martindow · 20 June 2019 at 12:09PM

Rainbowgirl84 wrote: »

Strange.

I think it happens sometimes that people don't get the replies they are seeking affirming or encouraging their plans. Some come back and argue the toss and others possibly look at the replies on the forum without logging in and go off somewhere else to try again.

askmeaboutsofas · 22 June 2019 at 12:20PM

He is now asking for me to share more about my website. How long it’s been active, URL, turnover etc?

It's not strange that your supplier wants to know that your business has a history, although I personally would draw the line at providing them with the turnover. If you did have an up and running website already with a year or two behind it, it would be reasonable to tell the supplier how much you spend on stock rather than your turnover. Or give them a very rough, ballpark figure.

Do I wait until it's ready to go live?

Do you have anything to put on your website without this supplier? Don't commit to spend on a website and start working on it without knowing that you have a product to sell!

Do I tell him we are just starting up?

This will become obvious to the supplier even if you don't tell them, because your business has no trading history.

Will that scare him and make him run away?

Possibly, but you won't know until you have an honest conversation with them

Do I do an estimated one, wait for some orders or lie about it?

Don't lie, that's fraud! You can kiss goodbye to any good relationship with this supplier and anyone they talk to if you lie and they catch you, and it will be very easy to catch you out on this.

With the products I can get through this deal I think I will clear the 100k mark a year.

They will not want to hear this. This sounds like you are solely dependent on their supply. Do you have a business without this supplier? How do you know that you'll be able to sell their product this quickly? £100k sounds like a heck of a lot of toys!

Do I need to register my business before I open it? Is registering your business than registering with the whole VAT thing? When do I start paying VAT in the uk?

So first you should find yourself a local accountant who works with small businesses, and ask these questions there.

He wants my company details to run an Experian Credit Check to open an account. What information does he need for this? What will show up?

So as of right now, you have no company. You have no website, no business records, no taxes have been paid, no trading histroy - I'm sure you get the idea. There are no details to give him. If he runs a credit check he will immediately see that there is nothing to back this up. Depending on the check done they may do a check on you and/or your business partner instead, in which case it will turn up whatever an ordinary personal credit check turns up.

Far more concerning to your potential supplier is the fact that you don't have a business without him. Why should he supply you? Why will customers buy from you and not from anyone else? You shouldn't spend any money on this idea until you can answer those questions, and you should never run a business that is solely reliant on one supplier. I hope you have a good source of information on what his products actually sell for and how popular they are, and aren't just relying on the information they've provided to you.

Setting up a toy business and finding branded suppliers

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