Minimising startup costs

[Cromulent]

Right so here is my plan to minimise my startup costs. Does this look okay?

Shared hosting: already sorted been with my current host for years so happy to stay with them.

SSL certificate: RapidSSL $70 a year.

Website design: I have a quote for €850ish for a full custom design from a good designer with a proven track record.

Shopping cart: Magento. Open source, lots of features, looks good, planned future features fit in with my business growth plan.

Shipping: Royal mail. Seems far better value than FedEx or UPS.

Packaging: This is where I have no idea. Does anyone have any ideas for a place to get packaging to send CDs and DVDs internationally in a way that ensures as much as possible that they do not get cracked or damaged in transit?

Is there anything I have overlooked? I'm still not sure about things like import / export tax.

Any suggestions appreciated.

[obscure]

Shipping: TNT mail. Fixed that typo for you ;)

[Simon-M]

Just a small thing you missed. How will you get customers to your site?

[Cromulent]

Just a small thing you missed. How will you get customers to your site?

Ah, that's not something I consider a startup cost. I have a completely separate marketing budget but I see your point.

I have that in mind though. Is TNT really that much better than the Royal Mail then?

Edit: Reading TNTs website seems to suggest they use the Royal Mail to deliver the post anyway.

[Simon-M]

Ah, that's not something I consider a startup cost. I have a completely separate marketing budget but I see your point.

I have that in mind though. Is TNT really that much better than the Royal Mail then?

If you are financing yourself then you can put what you like down as a start-up cost but if you are looking for finance you will need to include that as it is a start-up cost.

Simon

[Cromulent]

If you are financing yourself then you can put what you like down as a start-up cost but if you are looking for finance you will need to include that as it is a start-up cost.

Simon

Fair play. Initial marketing budget cut and pasted into start-up costs :p.

[Stampy]

I use Magento for one of my sites. It's a fantastic application considering it's open source, but I would add a few words of caution.

Unless you're a programmer/coder type person, I would say that you would need to factor in costs to adapt it to get it where you need it to be. Particularly to integrate the design, payment options, etc. Depending on the scale of the site, you would need to allocate several hundred pounds for this.

[Cromulent]

I use Magento for one of my sites. It's a fantastic application considering it's open source, but I would add a few words of caution.

Unless you're a programmer/coder type person, I would say that you would need to factor in costs to adapt it to get it where you need it to be. Particularly to integrate the design, payment options, etc. Depending on the scale of the site, you would need to allocate several hundred pounds for this.

Do you have a link to your shop?

I can already program in several languages so learning PHP shouldn't be an issue but I would rather outsource things like that.

I'm working on the premise that I can always change it once I'm launched to match customer feedback. It seems somewhat silly to make modifications without talking to customers about them first.

[oldeagleeye]

You are in a highly competitive world. Tesco - W h Smith and others mail from Jersey to save Vat.

[Cromulent]

You are in a highly competitive world. Tesco - W h Smith and others mail from Jersey to save Vat.

Nope. I have a niche that neither the big high street retailers nor places like iTunes and Amazon cover. Or if they do it is in a very slapdash and haphazard manner.

[Stampy]

My site is sentientclothing . co.uk. From what I could gather, even experienced programmers were struggling with it, particularly with the database. I've got a product feed from my supplier that I want to link up to my site, and can't figure out how to do it. And I know the feed works well with other open source carts.

Not trying to put you off Magento, I think it's fantastic, and outsourced the programming work myself. Just make sure you include that in your start up costs.

[Cromulent]

My site is sentientclothing . co.uk. From what I could gather, even experienced programmers were struggling with it, particularly with the database. I've got a product feed from my supplier that I want to link up to my site, and can't figure out how to do it. And I know the feed works well with other open source carts.

Not trying to put you off Magento, I think it's fantastic, and outsourced the programming work myself. Just make sure you include that in your start up costs.

Thanks for the advice. Nice looking site.

The only slight concern with Magento is that it is a bit of a resource hog and needs quite powerful servers.

[Island Computer Repairs]

Get your SSL Cert from here: http://ccmods.ledgersoftware.co.uk/store/ssl-certificates/rapidssl/prod_17.html

The guy is really helpful and if you ask nice he will set it up for you :)

I use Cubecart for all my stores too!

[awebapart.com]

Right so here is my plan to minimise my startup costs... Is there anything I have overlooked?

Stock?

Shared hosting: already sorted been with my current host for years so happy to stay with them.

SSL certificate: RapidSSL $70 a year.
You will also need a unique IP address for your SSL certificate. Is your current shared hosting good enough for a magento ecommerce site, you might have to spend more on hosting. If you are getting an SSL certificate then are you also taking credit card payments onsite? You have not mentioned any payment processing, which might have its own upfront costs as well as monthly costs depending on what you go for, e.g. merchant account with bank, setting up an account with WorldPay/ProtX, this could be a few hundred pounds in initial costs as well as monthly costs too (e.g. £20 per month for Protx).

Website design: I have a quote for €850ish for a full custom design from a good designer with a proven track record.
Web design can mean different things to different people. It could mean just a graphic design for a website in photoshop. It could mean a static HTML/CSS design. It could mean a fully working website based on Magento. Depending on what is delivered in your 'website design' there might be other costs, and these costs could be considerable if the web design deliverable isn't a fully working website based on Magento, and more so if the initial graphic design/ static website design was not created with consideration of the design features, framework, structure and constraints of the Magento system.

Shopping cart: Magento. Open source, lots of features, looks good, planned future features fit in with my business growth plan.
Any other development work required to turn the default Magento system into the online shop that you want. This usually requires developers with experience and skills in PHP, Magento, and possibly any other systems you want to integrate with, e.g. payment systems.

[obscure]

Is TNT really that much better than the Royal Mail then?
Sorry I was just having a joke based on the news that the RM may be sold off and that TNT would likely be in the frame to buy them/part.

[Cromulent]

Stock?

That is still to be worked on so I have no idea about the potential costs. I'm trying to sort out the things I do know at the moment. There are lots of people to contact about this and it will take awhile to get all the potential suppliers to agree to a deal hence the lack of information on that front :).

You will also need a unique IP address for your SSL certificate. Is your current shared hosting good enough for a magento ecommerce site, you might have to spend more on hosting. If you are getting an SSL certificate then are you also taking credit card payments onsite? You have not mentioned any payment processing, which might have its own upfront costs as well as monthly costs depending on what you go for, e.g. merchant account with bank, setting up an account with WorldPay/ProtX, this could be a few hundred pounds in initial costs as well as monthly costs too (e.g. £20 per month for Protx).

I'm planning on starting off with Google checkout and Paypal. The SSL certificate is just to give a little extra confidence to the customers and to be available should I need to open a Protx or Worldpay account. As a startup the costs for these associated services are to expensive to justify for the amount of orders I am likely to take in the first few months.

With Google Checkout offering free transaction processing when you spend money on adwords I thought it the best option to save money on transactional expenses.

Web design can mean different things to different people. It could mean just a graphic design for a website in photoshop. It could mean a static HTML/CSS design. It could mean a fully working website based on Magento. Depending on what is delivered in your 'website design' there might be other costs, and these costs could be considerable if the web design deliverable isn't a fully working website based on Magento, and more so if the initial graphic design/ static website design was not created with consideration of the design features, framework, structure and constraints of the Magento system.

I've worked with this guy before. I know what he produces and know what he is capable of. I'm pretty happy with the price considering.

Any other development work required to turn the default Magento system into the online shop that you want. This usually requires developers with experience and skills in PHP, Magento, and possibly any other systems you want to integrate with, e.g. payment systems.

The base system is fine for a startup. I can do some stuff myself, PHP is a pretty simple language when coming from a C and Java background, but as I said earlier if something is required I will most likely outsource it. But as I won't be doing much, if any, modding to start with things that can be dealt with later.

[oldeagleeye]

QUOTE.
STOCK.That is still to be worked on so I have no idea about the potential costs. I'm trying to sort out the things I do know at the moment. There are lots of people to contact about this and it will take awhile to get all the potential suppliers to agree to a deal hence the lack of information on that front :).

You are trying to sort out what you do know. Sorry OP - don't get that. Before you can consider any business you need to know how much the raw materials cost and if you can compete.

What your saying is that you can pull a pint of beer but you don't know how much it costs or what you can sell it for.

You also mention low volume. That is not going to get you any good discounts or deals from suppliers even in a niche market. Can you live with less than a 10% margin because that is what your looking at and it might even be as low as 5%. That is 50p on a £10 dvd. The postage is gonna wipe that out.

I would get on to those suppliers if I were you.

[quikshop]

With stock, the instinct is to hoard a lot of products ready for that hopeful rush. Its always better to run with low stock levels first and operate a JIT (just in time) fulfillment process.

If your branding and business idea is unique, consider getting them trademarked... costs from around £250 but if your idea really is that good then it will be copied before the ink is dry on your new website :rolleyes:

[oldeagleeye]

Didn't know you could brand an idea only a product.

[Cromulent]

With stock, the instinct is to hoard a lot of products ready for that hopeful rush. Its always better to run with low stock levels first and operate a JIT (just in time) fulfillment process.

That is the plan. I don't have the space to store much stock so it is the only option.

Don't get me wrong, I have a significant percentage of my startup capital allocated to advertising so I am expecting some business, I just prefer to err on the side of caution with my forecasting.

[dapa]

I'm planning on starting off with Google checkout and Paypal. The SSL certificate is just to give a little extra confidence to the customers and to be available should I need to open a Protx or Worldpay account. As a startup the costs for these associated services are to expensive to justify for the amount of orders I am likely to take in the first few months.


You'd still need a dedicated, static IP address to install the certificate, if that's what you're planning? I'd drop this requirement for the moment - people will be taken to a secure page when they pay with PayPal / Google Checkout.

[Island Computer Repairs]

You'd still need a dedicated, static IP address to install the certificate, if that's what you're planning? I'd drop this requirement for the moment - people will be taken to a secure page when they pay with PayPal / Google Checkout.

Google Checkout Requires SSL in some cases. I had to get a Dedicated IP and then pay for an SSL Cert to use it with cubecart.

If you get the SSL from this guy: http://ccmods.ledgersoftware.co.uk/store/ssl-certificates/rapidssl/prod_17.html

It is £19.99 and if you ask nicley he will install at no extra cost :)

[quikshop]

Didn't know you could brand an idea only a product.

Whoops, I should have been clearer. I meant trademark and copyright the use of the brand, for example, the owner of www.flossyandpickles.com (http://www.flossyandpickles.com) has protected the use of her brand name and logo not only for retail but for use on a whole raft of retail goods and uses.

[sysops]

With stock, the instinct is to hoard a lot of products ready for that hopeful rush. Its always better to run with low stock levels first and operate a JIT (just in time) fulfillment process.

Tut tut Dave, there you go again advising people to run two-bit bedroom dropship operations. Just because you give it a fancy name (which by the way means something totally different), doesn't make it any less two-bit.

[oldeagleeye]

Whoops, I should have been clearer. I meant trademark and copyright the use of the brand, for example, the owner of www.flossyandpickles.com (http://www.flossyandpickles.com) has protected the use of her brand name and logo not only for retail but for use on a whole raft of retail goods and uses.


That is what I mean't . You can protect or register/trademark a product but you can't an idea. If you could my old boss when I worked as a sat boy in a deli would be enjoying royalties from Tesco - Iceland and Sainsbury what with him providing me with a bike to deliver the smoked salmonall those years ago.

Good idea. Home Delivery they call it these days. Mind you I bet I got more tips than the miserable drivers they got these days too..

[Cromulent]

Tut tut Dave, there you go again advising people to run two-bit bedroom dropship operations. Just because you give it a fancy name (which by the way means something totally different), doesn't make it any less two-bit.

Nothing wrong with running a home business as long as you are dedicated and willing to provide the best service you can if you ask me. Oh and I'm not planning on drop shipping (I believe that is where you just take orders and pass it onto another company for dispatch?).

[quikshop]

Tut tut Dave, there you go again advising people to run two-bit bedroom dropship operations. Just because you give it a fancy name (which by the way means something totally different), doesn't make it any less two-bit.

Lol, from small acorns will great Oaks grow :D

[sysops]

Nothing wrong with running a home business as long as you are dedicated and willing to provide the best service you can if you ask me.

I agree, there isn't anything wrong with running a home based business. Many businesses lend themselves very well to being operated from home. Retail of physical goods is not one of them.

Oh and I'm not planning on drop shipping (I believe that is where you just take orders and pass it onto another company for dispatch?).

Very sensible :)

Yes, that is what dropshipping is.