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Advice needed (First shop)

Finding products etc

     
6:09 pm on Aug 24, 2010 (gmt 0)

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I've been trying to find some products for shop and luckily I have a relative who has provided a few products at trade price.

The problem is I need to find a similar source for a wide range of other products. I've emailed a few manufactures who aren't interested in a start-up and it doesn't appear that there are any drop ship companies for these products either.

I can buy these other products in small quantities from other online shops (including eBay) and could probably make a small profit, but then there's the initial outlay of money.

Is this normal or am I missing something?

I don't mind forking out some cash to start things up, but I don't have a fortune to spend. If I do buy some products, I'll only be able to buy a couple of each at most.
2:30 am on Aug 25, 2010 (gmt 0)

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I've emailed a few manufacturers who aren't interested in a start-up ...


Find a wholesaler in your area that works with these manufacurers. Ask those manufacturers who their wholesalers are, or check their websites.

Wholesalers will require proof that you're a business, and have an initial purchase minimum, but they should be willing to work with you armed with a credit card.

You don't need to stock "a couple of each" product. Your stock levels are determined algorithmically, based on how often the item is ordered, the quantity per order, and the restock delay (how many days from placing an order to receiving the stock).

But you can start by stocking zero items, order stock as you receive orders, and start stocking inventory once you establish some sales data.
5:46 am on Aug 25, 2010 (gmt 0)

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i do not know what products you are selling.
i am one owner of silk tie shop online in which small wholesale is offered
8:47 am on Aug 26, 2010 (gmt 0)

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Thanks guys.

jwolthuis - What do you mean by 'armed with a credit card' exactly? I appreciate that my stock levels will need to be determined based on demand, but my shop is brand-new and isn't even promoted yet so I'm thinking more along the lines of getting some stock in before someone orders?

The problem with having no stock is delivery times will be over a week and I can't see anyone ordering if that's the case.
3:54 pm on Aug 27, 2010 (gmt 0)

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I suppose this is the same advice as jwolthuis, but you might see if there are any distributors for the manufacturer you would like to work with, or seek an alternate (smaller, more hungry) manufacturer.

Think about the beer industry - pubs don't buy directly from inbev/anheuser-busch, they purchase from a local or regional distributor that carries a variety of products. Once you get big enough, you may be able to buy directly from the manufacturer and get better pricing.

"Armed with a credit card" means you will need to pay up-front (no terms available) as you are a small, unknown entity. Especially now, manufacturers/distributors are particularly leery of net-30/net-60 terms and "I'll pay you when I get paid" customers.

I'd look into finding distributors/wholesalers who will dropship for you. You may not find these companies online - I'd recommend finding a trade association or magazine and finding them this way. If they are "old-school" and deal more with b&m, they might be experiencing a downturn. Also, as they are wholesalers/distributors, they may not advertise (esp online) that they dropship as not to appear as though they are selling directly to endusers/consumers. In many industries, this is a big "no-no".
4:35 pm on Aug 27, 2010 (gmt 0)

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... and isn't even promoted yet so I'm thinking more along the lines of getting some stock in before someone orders? The problem with having no stock is delivery times will be over a week and I can't see anyone ordering if that's the case.

The fact that your shop isn't promoted yet tells me that it's *way* too soon to be ordering stock. You'd likely be sitting on that stock for the next 12 months.

Yes, if you have zero-inventory to start with, the first few orders will have longer fulfillment times, but that's ok starting out. Just don't advertise that weakness. Customers don't need to know your realtime inventory levels and fulfillment times (that data can also get you in trouble if the data turns out to be outdated).

Regarding drop shippers, many distributors in the USA will only drop ship to states where you hold a resellers tax permit. They are probably free to obtain in each state, but be prepared to file quarterly and yearly sales tax returns for every state you have a permit. Wholesalers in the USA must heed the IRS rules, and aren't likely to cut corners for your business.
10:22 pm on Aug 28, 2010 (gmt 0)

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I would look into making your own stuff. That's the best way to break in. Low overhead. Don't have to deal with anybody else. Buying stuff from retailers to resell is nuts. You're never going to make any money like that. I was forced to buy one little part from somebody that way to meet an order, because I couldn't get them any other way, and it made me cringe to do it. And that was just a little $1.50 part. But unfortunately, there's going to be some stuff that they are just going to ignore you on until you're one of the big boys. It can actually work out in the end though... There's been stuff that people refused to wholesale me. So I made my own and now give them competition. Whoops... Guess they should have sold me their stuff when I asked.
11:11 am on Sept 1, 2010 (gmt 0)

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but my shop is brand-new and isn't even promoted yet


Although not an expert I work alot with a company who deals with wholesale. The first thing they do when they receive a trade request is to check the company out - make sure they are genuine and look at their website etc. If they don't get a good initial feeling about the company then they will just say no straight away. I think suppliers will decide whether it is worth dealing with you based on how you present yourself and decide if you are going to be a hassle to deal with. I get the impression this is just as important as how old the company is - so make sure you have everything in place and tick all the boxes before contacting suppliers.