Ex-Catalogue Flat Packed Furniture

[Ams]

Hi,
Here is an oppurtunity ive seen, and Id like some opinions on it.

I browsed e bay and found an ad
(The item number is 4435726048)
The guy is advertising ex catalogue furniture at 14.5% of its original catalogue, and he is selling it by the container load.

I mailed him with some questions, and it sounds like opening a shop and retailing this stock would be quite a money maker.

If you bought a container for 14.5% of its catalogue value, and sold its contents in a shop for say 50% or 60% of the catalogue price, surely you would have a fast stock turnover with people buying it because its so cheap, and a real good profit margin because of your markup.

I never really considered retail, but ive seen this oppurtunity and its got me thinking, I did some figures and it looks good. Just have to think about raising cash now.

In his reply he told me he is supplying other shops which are doing very well, so sounds good.

Anyone got any tips on how I should approach this, as I dont really know where to start?
And also, if u see the ad, do you think its actually worth going into?

Thanks for any input, ideas or suggestions

Amit!

[winton50]

First off it's not 14.5%

These companies quote 14.5% of price when in fact it's of selling price including VAT.

They then charge you VAT on your buying price

so

£1000 @ 14.5% = £145

but you pay vat so pay £170

What they should really say is you pay 17% or you pay 14.5% of (£1000-17.5%) £851

Remember that these are returns and as such a good 20-30% will be incomplete or damaged as they have been through the post at least twice and are after all returns. Also they are often from catalogues where you'll pay about 20% more than on the high street due to free credit etc.

If you go direct to the returns company you'll pay between 7.5 and 12% for container loads depending on grade. so check these out. you can find a list in the trader magazine.

In short they can be a lucrative business but are not the cash cows you think they might be at first sight