Advise Please on New Online Store

[TimE]

Hi Guys,

I am looking to set up a new on line store. To be able to compete in my intended market place I need to offer a diverse range of products. I do not have the cash or storage to achieve this.

My plan was to be back to back with my wholesalers and offer the full ranges they have. The down side of this would be that prospective customers would have to contact me for stock info, I would check with my suppliers and get back to them. Delievries would also take a bit longer around 3-4days. In time I will build up some stock levels of the fast moving items.

My USP will be an individual service that customers would not get from larger companies, along with a level of professional advice about the products. Obviously I intend to pitch the prices competitively also!!

I am working with someone who can generate web traffic, my only concern is how to convincing people to use me.

Any help and advice would be greatly appreciated.

 

[SFD]

Without knowing the market it is quite hard to comment but, would it not be better and easier for you to specialise in one area in order to build up funds then use that to diversify?

This way you could maybe keep a small stock and get things sent out on a next day basis.

 

[TimE]

Thanks SFD.

The market is cycle parts and unless you are a bike geek you will not believe the vast array of parts let alone different sizes etc....

My initial idea was to get a small a stock and down the ebay route. when you allow for their fees though the gross margin rapidilly erodes.

You are right though. Maybe a better idea would be to keep a small range for quike dispatch and have the rest in the background?

I have done a couple of deals so far and people didn't seem to mind the extra day or two for delivery. The fact that I didn't have any stock actually allowed me to win one order as it was an unusual size that the large retailers do not stock.

Thanks again SFD for your helpful opinion.

Keep them coming please......

 

[MartCactus]

Without knowing the market it is quite hard to comment but, would it not be better and easier for you to specialise in one area in order to build up funds then use that to diversify?

This way you could maybe keep a small stock and get things sent out on a next day basis.

I think for the vast majority of customers prompt delivery (ideally next day) is one of the most important factors. People don't want to wait 4-5 days for something to arrive. I guess this might depend on the type of market you are in - for consumers 4 days might be acceptable but for businesses they'll usually expect it the next day.

 

[Connexions]

My plan was to be back to back with my wholesalers and offer the full ranges they have. The down side of this would be that prospective customers would have to contact me for stock info, I would check with my suppliers and get back to them.

Any help and advice would be greatly appreciated.

Contact your suppliers to see if they can provide an up to date product data feed. If they do, then you can build a program into your shop to update your stock numbers. We do this regularly for our customers. Auto update your products.

 

[SFD]

If you could be significantly cheaper than your competitors then people may not mind waiting the extra couple of days.

If you have a very limited budget then it may be better to specialise as it will be easier to market etc.

Have you got a budget for website and marketing?

 

[TimE]

Marketing is in hand as I have a good friend who is on board with me and can build ecommerce sites and optimise them.

 

[JamieM]

In my opinion you will need to hold stock to make this successful. Unless any of your suppliers will drop ship..... and be good at it.

 

[TimE]

Hi JAmie,

Thanks for the advice.

I thought about drop shipping but don't think my suppliers would go for it. Also I don't like the idea of delivery being out of my hands.

Had a quick look at your websites and may well invest in a power ball! Your products are very unique unlike mine.

The plan was smal scale at first, re-invest all profits to enable growth to a point when i can keep stock.

 

[JamieM]

I think that's the best way. Like SFD said it would be better if you could specialise in something.

I think with the way you plan to do it, delivery would be too long and most wholesalers will have a minimum order quantity. You have been lucky if you found one willing to sell you individual products. Even still, you would need to pay shipping each time and this would eat in to your profits especially considering you wouldn't be getting a great trade price anyway due to the low volume.

You'll also need to consider how competitive the industry is. You might be better approaching a local bike shop and asking them if you can run an ecommerce store for them sharing the profits. It might not work long term but it will get you started and gain you good experience. Although perhaps they don't hold a lot of parts either but it is worth thinking about.

 

[keithzala]

we can offer you one solution which will sort out all your problems of timing and delivery method its all automated just click away let me know if you are interested.

Thanks

 

[YoungMoneyChina]

I have some knowledge of the cycle trade.

You will have a couple of problems with the way your hoping to run this business. I hope you can find a way to overcome them.

I know that a lot of the main suppliers wont be very keen on selling to you if you only sell online. Secondly these suppliers will require you to do a mimimum first order and from your original post it sounds like you may not have the funds for this?

If your not specialising on one specefic area of cycling then your competing against companies like crc and wiggle who often sell at prices close or below trade prices. They also offer free next day delivery.

My advice to you i start by specialising in maybe 6 staple products that you can perhaps import. I would say go for consumables such as disc pads, rotors, grips etc. Become known for supplying these at good prices and good turnaround then go from there.

let me know how you get on as i can likely be of help.