Advice needed desperately please!

christabel2404

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Feb 26, 2012
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I started selling books through Amazon about a year ago. I have about 6000 books for sale now. I have rented a local church hall for storage as I reached the point where I had too many books to store at home. Since renting the hall, I cannot add to my stock of books as whatever I make is going on rent. At the same time, my other source of income has dried up. I am making about £6,000 a year on a stock of 6000 books and from my research believe this is about average: if I had a stock of 20,000 books, I would be aiming to make about £20,000 a year. I cannot get a loan from the bank. I need a cash injection of about £5,000 pounds to increase my stock. Any suggestions gratefully received!
 

darren atkinson

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Sep 21, 2005
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To be blunt I'd advise getting into a different line of business.

From your figures it sounds ridiculously hard to make a 'decent' living, if you secured a loan of £5000 and got another 5000 books you'd still only be making £11k a year, nobody can realistically support themselves off this income and borrowing £5k to make £5k is not sustainable.

If all you profit is going into storage costs then image what it would be like if you managed to get to 20,000 to 40,000 books. Also at these levels how much time is it going to take to manage the inventory? Could you do it by yourself? As at your profit rates you'd struggle to employee someone and make enough for yourself.

I have no real experience of the book industry but those figures look daft if I'm being honest.

You have also got to take into account that Amazon are the worlds largest booksellers and will eventually start eating into your business if they think they can make more money supplying the same books you do by themselves.

Just the other day someone in the ecommerce forum was saying how Amazon started selling the same things he did through their marketplace and automatically discounted the Amazon sold products to ensure they always beat him on price.

I think you have to take a step back and think about this business in the long term and wether it is sustainable or not.
 
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Websitehandyman

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Nov 25, 2011
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I started selling books through Amazon about a year ago. I have about 6000 books for sale now. I have rented a local church hall for storage as I reached the point where I had too many books to store at home. Since renting the hall, I cannot add to my stock of books as whatever I make is going on rent. At the same time, my other source of income has dried up. I am making about £6,000 a year on a stock of 6000 books and from my research believe this is about average: if I had a stock of 20,000 books, I would be aiming to make about £20,000 a year. I cannot get a loan from the bank. I need a cash injection of about £5,000 pounds to increase my stock. Any suggestions gratefully received!

Join with other doing the same thing.

For awhile anyway, just like people get together to sell in antiques. You could find people doing similar and offer to not only store but handle the shipping for a cut of the income. Use the income to buy more stock and you not only get more stock you get a way of funding it to well into the future.

In fact I could do with clearing a load out myself but they are all football books.
 
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christabel2404

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Feb 26, 2012
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To be blunt I'd advise getting into a different line of business.

From your figures it sounds ridiculously hard to make a 'decent' living, if you secured a loan of £5000 and got another 5000 books you'd still only be making £11k a year, nobody can realistically support themselves off this income and borrowing £5k to make £5k is not sustainable.

If all you profit is going into storage costs then image what it would be like if you managed to get to 20,000 to 40,000 books. Also at these levels how much time is it going to take to manage the inventory? Could you do it by yourself? As at your profit rates you'd struggle to employee someone and make enough for yourself.

I have no real experience of the book industry but those figures look daft if I'm being honest.

You have also got to take into account that Amazon are the worlds largest booksellers and will eventually start eating into your business if they think they can make more money supplying the same books you do by themselves.

Just the other day someone in the ecommerce forum was saying how Amazon started selling the same things he did through their marketplace and automatically discounted the Amazon sold products to ensure they always beat him on price.

I think you have to take a step back and think about this business in the long term and wether it is sustainable or not.

Thanks Darren for your reply.
First, if I had a loan of £5000, I could increase my stock by 10-15 thousand books, not 5000. Therefore my stock would be about 20,000 and my income would be about £20,000. Also, the storage space I have now would be large enough to hold the extra books. Not sure about the time it would take to manage the inventory, but I think it would be possible. Amazon would not be able to supply the same books as me as they are unusual/rare/collectible/hard -to-find. Other sellers on Amazon may have some of the same books as me, but Amazon as a company would not.
 
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internetspaceships

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Sep 7, 2009
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Hi OP

The secret is in the buying.

6000 books should make you a lot more than £6,000 per year. As the gent above said, you need to reassess what you're doing because based solely upon the info given you appear to be running the business as a "busy fool." I don't mean you are a fool, it is a turn of phrase.

It sounds very much like you are on to something however you really need to alter your margins in order to make it a viable proposition.

If Amazon cannot source these books, why are you selling them with such low margins? Also are you able to pay less for them?

If you sort these two issues out then you'll be able to grow your stock organically. I'm a stock based business too, hence the informed suggestions because we've been there too!

Excuse the bluntness and let me know if I can provide any more suggestions.

Jon
 
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christabel2404

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Feb 26, 2012
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Hi OP

The secret is in the buying.

6000 books should make you a lot more than £6,000 per year. As the gent above said, you need to reassess what you're doing because based solely upon the info given you appear to be running the business as a "busy fool." I don't mean you are a fool, it is a turn of phrase.

It sounds very much like you are on to something however you really need to alter your margins in order to make it a viable proposition.

If Amazon cannot source these books, why are you selling them with such low margins? Also are you able to pay less for them?

If you sort these two issues out then you'll be able to grow your stock organically. I'm a stock based business too, hence the informed suggestions because we've been there too!

Excuse the bluntness and let me know if I can provide any more suggestions.

Jon

Hi Jon
You are absolutely right. When I first started I had no knowledge at all of what would sell. In the last 2 years I have learned a great deal. So, I am a lot more selective now about the stock I buy. I am pricing the books to compete with other Amazon sellers. I'm not able to pay less for books. On average, I buy a book for 40p and sell it for £7.00. You are right when you say I can grow my stock organically, I am doing that but it is very slow because of the limited amount I can invest in more stock. I need to figure out a way to speed up the process and the only way I can see forward is through a cash injection to enable me to increase my stock.
 
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Christabel - you say that you are paying 6K in storage and your other income has dried up, I would tip the problem on its head and say that you need to cut your storage costs. Is it possible in your area to rent a shop for storage which may be able to sustain retail sales from your existing stock, I cannot see how you are going to get rich but you may be able to make a living if the amazon sales can pay the overheads. What about book fairs ? I would think you need to increase your sales from existing stock and build new stock
 
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Morraine

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Oct 31, 2008
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Blood Lust

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Sep 7, 2011
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I started selling books through Amazon about a year ago. I have about 6000 books for sale now. I have rented a local church hall for storage as I reached the point where I had too many books to store at home. Since renting the hall, I cannot add to my stock of books as whatever I make is going on rent. At the same time, my other source of income has dried up. I am making about £6,000 a year on a stock of 6000 books and from my research believe this is about average: if I had a stock of 20,000 books, I would be aiming to make about £20,000 a year. I cannot get a loan from the bank. I need a cash injection of about £5,000 pounds to increase my stock. Any suggestions gratefully received!

Find a supplier that gives you credit
 
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Morraine

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Oct 31, 2008
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I think you don't need to spend all that money on renting the church hall.

Just put all the books back in your house and grow it from there. if you can live like Richard Wallace for a couple of years

I have recently moved to a much smaller home, there's no way I could do that.


I don't think you are hungry enough .......... if you are making £6000 a year and most of this is being spent on the rent of the church hall then you need to move all the books to a place with low or no rent and grow the business from there. How big is you home now? can't you just allocate one room to be the book room from floor to ceiling with books? this could be your bedroom and you sleep in the living room (if you live in a one bedroom house)???? this is extreme but I think this business calls for extreme measures to become profitable!! :)

You will be able to make the £5000 you need to buy the extra books then you can look at getting some premises to grow in.
 
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Homshaw

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Apr 18, 2008
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There is nothing the matter with the profit margin - a 40p book sells for £7

Storage costs are too high. I'd want a shop for £6K. Can you not rent a container to store your books? I know someone who rents one for £1000 pounds a year but I don't know costs in the area you live

What about book fairs? I know someone who does OK from them

I was talking to a gentleman with a bookshop that was closing. He was saying how difficult it was for independant booksellers
 
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Morraine

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Oct 31, 2008
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There is nothing the matter with the profit margin - a 40p book sells for £7

Storage costs are too high. I'd want a shop for £6K. Can you not rent a container to store your books? I know someone who rents one for £1000 pounds a year but I don't know costs in the area you live

What about book fairs? I know someone who does OK from them

I was talking to a gentleman with a bookshop that was closing. He was saying how difficult it was for independant booksellers

Are containers used for storage water and damp proof????
 
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Homshaw

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Apr 18, 2008
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The person I know stores army surplus in them including uniforms, boots etc. They are recycled shipping containers

You would have to check them out and take advice but these things are used to transport goods by road and sea

Worth the effort to find out if you save £5K

Found this that would suggest it is worth looking at

http://containers.com.au/blog/2011/08/shipping-container-security/
 
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christabel2404

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Feb 26, 2012
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I don’t think you are hungry enough .......... if you are making £6000 a year and most of this is being spent on the rent of the church hall then you need to move all the books to a place with low or no rent and grow the business from there. How big is you home now? can't you just allocate one room to be the book room from floor to ceiling with books? this could be your bedroom and you sleep in the living room (if you live in a one bedroom house)???? this is extreme but I think this business calls for extreme measures to become profitable!! :)

You will be able to make the £5000 you need to buy the extra books then you can look at getting some premises to grow in.

If I used my bedroom, for example, it would look exactly like the bedroom of the guy in the daily mail and every time I sold a book I would have to spend a week searching for it. Finding a storage place with low or no rent, as you suggest, would be the perfect solution, but it isn't feasible in my home, and where else would I find a place with low or no rent? I have debated asking my landlord to give me 6 months rent-free, as I am trying to build up a business, and he was once in my position, but I really don't think he will agree even though he is probably a millionaire!
 
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christabel2404

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Feb 26, 2012
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On the basis that the standard shipping container is used to ship all sorts of precious and delicate items across the world's oceans in all the world's weather I'd say they most certainly can be.

You get what you pay for, but a decent 2nd hand 20' container is NOT going to cost £6k pa.

have you any idea how much such a thing would cost? I have looked at the website that was suggested but they don't give any prices.
 
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christabel2404

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Feb 26, 2012
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On the basis that the standard shipping container is used to ship all sorts of precious and delicate items across the world's oceans in all the world's weather I'd say they most certainly can be.

You get what you pay for, but a decent 2nd hand 20' container is NOT going to cost £6k pa.

also, I would need somewhere to put it! and probably 20' would be too small.
 
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darren atkinson

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Sep 21, 2005
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For me I'd still consider wether this was viable over the long term, if your making an average of £6.60 per book then by my calculations you'd need to be selling over 4500 books a year to make £30k, at the minute your selling around 900 a year (again based on your calculations), so this would equate to a five times increase in your current trading levels, is this realistic?

£30k is only an okay wage in this day and age, not what could support more than one person really.

You also have to take into account that storage costs will grow at this level as will your time requirements and other associated costs, so you wouldn't be left with £30k based on your information already supplied.

Like some others have mentioned as well as sorting out your storage issues you need to develop other ways of making an income from them, if buying cheaper is not possible and you can't raise prices then it's going to be a long difficult road for little profit.

I'm honestly not trying to be negative, but even if you had free storage costs would you be able to ramp it up to the required levels of business?

Only you would know this and you have to be realistic because if it's not possible then would you be better in looking at other ways of generating income instead?

Another thing to consider is what if Amazon cancel their Marketplace? It might not seem likely at the minute but who knows what's going to happen in a few years, Amazon is a private company and it seems like your placing your future business in their hands.
 
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Look harder. What you've found is someone who operates a storage facility and makes a good living from it. Find out how much it'll cost for you to implement a DIY solution: why pay someone else's overheads and profit? That's what folks are suggesting.

Find out how much it costs to rent a 20' container, find out how much it costs to rent a 20'x8' plot of land (well, bigger, but you get my point). Add them together.

Remember, what you have inside is not valuable to anyone except people like you: it's not going to be targeted by thieves that sell knocked-off designer goods down the pub.
 
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christabel2404

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Feb 26, 2012
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For me I'd still consider wether this was viable over the long term, if your making an average of £6.60 per book then by my calculations you'd need to be selling over 4500 books a year to make £30k, at the minute your selling around 900 a year (again based on your calculations), so this would equate to a five times increase in your current trading levels, is this realistic?

£30k is only an okay wage in this day and age, not what could support more than one person really.

You also have to take into account that storage costs will grow at this level as will your time requirements and other associated costs, so you wouldn't be left with £30k based on your information already supplied.

Like some others have mentioned as well as sorting out your storage issues you need to develop other ways of making an income from them, if buying cheaper is not possible and you can't raise prices then it's going to be a long difficult road for little profit.

I'm honestly not trying to be negative, but even if you had free storage costs would you be able to ramp it up to the required levels of business?

Only you would know this and you have to be realistic because if it's not possible then would you be better in looking at other ways of generating income instead?

Another thing to consider is what if Amazon cancel their Marketplace? It might not seem likely at the minute but who knows what's going to happen in a few years, Amazon is a private company and it seems like your placing your future business in their hands.


a five times increase is perfectly possible. My storage costs won't grow as I already have a large area. it will obviously take up more of my time and other costs such as packaging materials would increase. And having brought up 3 children on an income of about £25,000, now that the last one is about to leave home, an income of roughly £30,000 just for me is not something I would sneeze at. Undoubtedly lots of members here earn more than that, but I have been used to taking care of a family on much less. Not a luxury lifestyle, old banger of a car and camping holidays in the UK only, but it's what I am used to. The possibility of Amazon closing marketplace would be a problem (although half my sales are on ebay), so I will be looking to set up my own online shop through ekm or similar as soon as possible so that my returning customers can buy directly from me. Although I cannot buy cheaper, I expect to make more than £6.60 per book as the business develops and would hope to be making £10 to £15 per book in the future.
 
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christabel2404

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Feb 26, 2012
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You are now 162.00 per month better off then - now sell some books at bookfairs and you may be on your way - what about leaving them in offices and local businesses and collecting the orders - that way other people will be paying for your storage and you will be exposing them to potential customers

I tend to only have one or two copies of each book, so leaving them in local businesses would not really work as far as I can see. my most popular books can get hundreds of people looking at them on the internet, many more than would see them in a local business.
 
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darren atkinson

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Sep 21, 2005
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a five times increase is perfectly possible. My storage costs won't grow as I already have a large area. it will obviously take up more of my time and other costs such as packaging materials would increase. And having brought up 3 children on an income of about £25,000, now that the last one is about to leave home, an income of roughly £30,000 just for me is not something I would sneeze at. Undoubtedly lots of members here earn more than that, but I have been used to taking care of a family on much less. Not a luxury lifestyle, old banger of a car and camping holidays in the UK only, but it's what I am used to. The possibility of Amazon closing marketplace would be a problem (although half my sales are on ebay), so I will be looking to set up my own online shop through ekm or similar as soon as possible so that my returning customers can buy directly from me. Although I cannot buy cheaper, I expect to make more than £6.60 per book as the business develops and would hope to be making £10 to £15 per book in the future.

Fair enough then, I genuinely wish you all the best with it.
 
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Homshaw

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Apr 18, 2008
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I think you need a Business Plan

It doesn't have to be typed up are have fancy graphs because you are not looking to borrow money just something so you have a clear idea of what you are trying to do and what problems you might come across

The £6K for storage need immediate attention because if you get that down it would be hard to actually lose money which would take a lot of the risk out of the business. Don't see how that is too difficult to send an afternoon on the phone finding out what is available and whether it will do the job. I will say the container I spoke of is on a dodgy looking industrial estate but the people are very friendly and helpful

Presumably you are claiming tax credits they are invaluable for the first stages of a business. Single person not earning a lot could get £50 a week

Then you need to think about marketing but I don't know what books you sell or what your market is.
 
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chalkie99

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Nov 14, 2008
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Couple of points -

You talk about buying for 40p, selling for £7 and making £6.60.

I think you need to think about the real profit, taking into account your Amazon fees and postage and packaging.

You also say "other costs such as packaging materials would increase" .

Surely, you will be able to buy in larger quantities and force the unit price down thus actually reducing your costs?

You really need to get a grip on actual profit margins before thinking of borrowing to expand.
 
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christabel2404

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Feb 26, 2012
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Couple of points -

You talk about buying for 40p, selling for £7 and making £6.60.

I think you need to think about the real profit, taking into account your Amazon fees and postage and packaging.

You also say "other costs such as packaging materials would increase" .

Surely, you will be able to buy in larger quantities and force the unit price down thus actually reducing your costs?

You really need to get a grip on actual profit margins before thinking of borrowing to expand.

I was just quoting another member with the figure of £6.60. As I sell on both Amazon and ebay, and those organisations approach shipping costs differently, it would probably take me an hour or two to figure out the "real profit". Buying packaging materials in larger quantities results in lower costs per unit as you say, but what I meant was the actual amount of money I would spend on these would be more if I had to ship 5 times as many items, even though the cost per envelope etc would be lower. I think I would need an accountant's help to work out actual profit margins, never having been in business before.
 
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