Starting buying and selling business(11 Posts)
Hope this is the right place to post.
I've been a sahm for over two years and I really want to start doing something but I need to fit it around my DD.
I am ok financially, dp works full time, so I am not concerned with making a lot of money to start with, although obviously making a profit would be my goal.
I have about £500 in savings I could use to buy some initial stock. I have been thinking about this for nearly a year and really want to make a go of it. So my question is, how do I begin? I literally don't have a clue.
I have thought of ordering some products from a wholesaler and setting up an eBay account and putting the stock up for sale on there. Is there anything else I need to do? As it would be just an eBay selling account, do I need to officially register as a company or can that wait? And how much stock should I buy to start with? Do I spend all my money or do I just start smaller and see how it goes?
Sorry for all the questions and I don't expect to them all to be answered. I'm just sort of thinking out loud. I would appreciate any advice/guiding points in the right direction. I realise £500 isn't a huge sum, I could possibly scrape together some more if necessary but I want to know if I'm missing anything obvious before I do.
If I were you, I would give some consideration to drop-shipping as a good way of dipping your toe into the water, rather than investing your £500 in stock which (if you get it badly wrong) could still be sitting in your spare room or garage next Christmas.
Just in case anyone pops up to say “don’t touch drop-shipping with a bargepole!”, here are my figures for 2016, having started from £0.00 on January 11th.
Number of Sales: 1964
Value of Sales: £133,071.17
Net Profit (after eBay and PayPal fees): £18,620.80
Yes, there are problems with drop-shipping, but I have never seen or had to handle anything that I have sold, and I’ve always been able to resolve any issues.
The most common problems are that you sell an item only to find that it has gone out of stock at your supplier, or they have hiked the price since you last checked it. You are also effectively piggy-in-the-middle as any issues with damage, missing parts, defective parts and so on have to be dealt with by liaising with the supplier whilst trying to keep the customer happy.
I still say that the pros outweigh the cons, though, and drop-shipping is a low-risk foot-in-the-door to the world of e-commerce. I may look at other channels in 2017, but I wouldn’t be where I am now if it wasn’t for drop-shipping.
If you need any more information, feel free to post on here or to PM me.
If you buy from wholesalers and sell online, you're just doing the same that anyone can do and you'll find everyone else sells at a very low price, meaning you end up making little or no profit after postage/packing, credit card fees, website costs, paypal/ebay fees etc.
You need to find an alternative sales channel such as a Sunday market or car boot sales where there aren't any other sellers of your items, or an alternative supplier (i.e. direct from the manufacturer/importer) to get it cheaper and cut out the wholesaler profits.
If neither of those is possible, you need to find another way to "add value", i.e. buy in bulk and repackage to sell individually. I know someone who buys bulk fabric by the roll and sells it by the metre on ebay. Another person buys reels of electrical cable (small for model trains etc) and cuts it into metre lengths and then sells packs of different coloured cables by the metre. Or buy sweets in kg bags and repack and sell in 50g bags on a market stall etc.
There are so many people just buying stuff from wholesalers and selling it online without doing anything to it, it's just become a race to the bottom.
I would agree to an extent with Badbadbunny’s post, and if you search eBay for certain very popular items such as the latest tech gadgets, you will see seller after seller with the only difference between them being pennies on the price. There can be a bit of an “I’ve got to be the cheapest” culture with some product groups, but the eBay “Best Match” algorithm includes more criteria than just the price.
For me, the key word on eBay is “momentum” – this is a combination of page views, watchers, previous sales, and Seller feedback. If you can get that momentum going, it tends to snowball as your item rises up the search results and continues to sell.
Some avenues for a buying and selling business are undoubtedly cul-de-sacs, which is why you have to think carefully before putting your money into stock. I like the re-packaging concept, and it’s true that if you can go further up the supply chain you can make it more profitable, although you might find that manufacturer MOQ’s (the minimum order quantity that they will accept) are beyond your reach. You could look at “white-label” products, which are unique to you and are branded/packaged especially for your business, but I would wait a while until you have some experience before thinking along those lines.
eBay is like any marketplace, be it real or virtual – if you set up yet another sandwich shop in a town centre that’s full of them you can expect to struggle against all that competition, but if you can find something which is less widely-offered and can develop a presence then eBay and Amazon have such huge “footfall” numbers that there is still good money to be made.
Badbadbunny - buying in bulk and selling individually like your friend does with fabric is most similar to what I had in mind.
Thank you Andrew. I had never heard of drop shipping. I will do some more research on this. It sounds as though this may be a good place to start definitely.
Thank you both so much.
You're figures look great Andrew. Much more than I'd expect to make in one year!
Hello again OP,
You’re very welcome!
When researching drop-shipping, by all means learn what it means, but my advice would then be to avoid following the same well-trodden path as everyone else and think outside the box a little bit. Drop-shipping is a much broader term than it might first appear.
Just going back to your original post – if you already have an eBay account, especially one with some positive feedback, use that rather than setting up a brand new one. Be aware of the PayPal rules for brand new sellers where they hold the buyer’s money before they release it to you – this can seriously damage your cashflow!
You can do a little bit of experimenting as a private seller before declaring yourself as self-employed, but don’t let it go on for months! You can become a sole trader rather than starting up a company which would bring in extra paperwork and formalities. You’ll need to register for VAT if your sales pass the threshold – you might also want to register early if that would be advantageous for you (this depends on what you sell).
Start slowly, rather than diving in and coming unstuck. Don’t follow the herd, and instead look for your own angle. And if you need any help, just let me know.
Thank you for all the tips. There's so much to consider, I'm glad I started this thread!
Message deleted by MNHQ. Here's a link to our Talk Guidelines.
Actually, don't use a private eBay account for selling while you test the waters. This is illegal. You cannot be a business masquerading as a private seller without breaching trading laws. Acquaint yourself with the Consumer Contract Regulations 2013. You MUST be compliant with this or you face the wrath of trading standards.
Running a business is not for the faint hearted. I have been doing it for over twelve years on and off, with my current business going for over five years.
Start very small and build on it. I wouldn't expect you to be considering vat registration within the first few years.
I wouldn't recommend going into anything clothing related. The returns percentage is very high and you must accept them.
If you ever want any help with any aspect from laws to accounts to how selling sites work, feel free to pm me. I run four online stores so quite well versed! The only thing I can't tell you is what to sell
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