Building an Online Business in Electronic and Home Goods – Seeking Guidance on Business Plans, Partnerships, and Private Labeling Strategies

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AlanJ1

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Jul 25, 2018
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I'm going to dive into the world of E-commerce quickly albeit I am not in tech anymore I am in another B2C sector. I am head of E-Commerce for a top 5 leading company in a large sporting sector.

Simply put if someone new was to come into our industry, they would struggle hard. Manufacturers/brands/distributors won't supply you and if you do, the prices will be higher than we pay.
Marketing spend to outspend what we pay Google, well yeah you will need a fortune in your pocket.
Staff, do you expect to run this yourself? I have 50+ behind me in the business covering every aspect of business.

I could go on and on and on.

If you want to start and make a few quid, it's possible. But to tackle one of the "big boys" simply because they started small and built up you need to get with the times. We aren't in the .com boom anymore we are in a massively saturated market where EVERYONE wants a piece of the pie.

Oh and you keep mentioning social. How do you plan on competing with the big brands in this space on social spending millions a month on ads as well as organically being lightyears ahead of you?
 
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Biz1990

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  • Jan 12, 2017
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    Excuse me a moment whilst I go and bang my head against a brick wall.



    With all due respect, that doesn't answer my question. I have asked specifically What problem do white goods manufacturers have today with losses on inventory?. Not about Sony or Samsung or mobile phones, nor about generalised statements regarding consumer preferences and evolution of technology. We're talking about white lumps here that keep food cold or spin some laundry round.

    So, in the specific industry that you're looking to enter (white goods) what is the actual issue, and scale/size of such issue, around losses on inventory?
    I never just said AO, i said other retailers not just AO, but to answer your question on : What problem do white goods manufacturers have today with losses on inventory? White lumps to keep food cold etc... What is the issue :

    The actual issue in the white goods industry regarding losses on inventory revolves around the difficulty in accurately predicting consumer demand for specific appliance models. Manufacturers as example by AO, have faced revenue loss, certainly in their expansions in Germany, due to unsold stock as noted on their financial report annually. Therefore having to sell on secondary markets on their official ebay stores and so forth, though, doesn't necessarily fix the issue through ebay alone, due to ebays fees etc... Manufacturers like AO and others in their sector or others often face challenges in forecasting market trends, consumer preferences, and the overall demand for their products. This unpredictability can lead to overproduction or underproduction, resulting in excess inventory or stockouts to then use secondary markets or discount goods highly more than they anticipated through the retailer.
     
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    BusterBloodvessel

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    Sigh....

    That's an equally generic answer to the last one you gave, just replacing generic words like "manufacturers and retailers" with the name of a specific company "AO". I'm pretty sure you're just copying and pasting out of a textbook. It reminds me of what I'd read when I was studying A-level business.

    Anyway, whatever. Best of luck.
     
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    Chris Ashdown

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    Why are you even thinking and quoting PLC's you should be concentrating on how to make a company you can grow to a few hundred thousand turnover which is making a good profit

    Forget the high flying if it was easy we would all be multi millionaires

    We all have or had dreams when starting a business but i doubt any of the posters on here had ambitions to be a PLC

    The bigger the company means different management to keep the profits coming in to pay the shareholders far different management than what is required for a startup

    Regarding AO things don't all go out of fashion have a look on Amazon for twin tub washing machines, someone is still making and more important selling them into just a different market from the 1960's
     
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    Biz1990

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  • Jan 12, 2017
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    I'm going to dive into the world of E-commerce quickly albeit I am not in tech anymore I am in another B2C sector. I am head of E-Commerce for a top 5 leading company in a large sporting sector.

    Simply put if someone new was to come into our industry, they would struggle hard. Manufacturers/brands/distributors won't supply you and if you do, the prices will be higher than we pay.
    Marketing spend to outspend what we pay Google, well yeah you will need a fortune in your pocket.
    Staff, do you expect to run this yourself? I have 50+ behind me in the business covering every aspect of business.

    I could go on and on and on.

    If you want to start and make a few quid, it's possible. But to tackle one of the "big boys" simply because they started small and built up you need to get with the times. We aren't in the .com boom anymore we are in a massively saturated market where EVERYONE wants a piece of the pie.

    Oh and you keep mentioning social. How do you plan on competing with the big brands in this space on social spending millions a month on ads as well as organically being lightyears ahead of you?
    @AlanJ1 Social media is so dynamic that suggesting the need for spending millions to succeed in any business would be entirely naive. Many businesses, in fact, leverage the influence of social media by collaborating with well-established social influencers who have amassed a large following or formed partnerships because they are brands themselves without spending millions. This is achieved through clever content creation and gradual growth, not overnight success, but through years of dedicated hard work and skill development in their respective sectors.

    While no one is advocating for taking on the big players directly, there's a belief that there might be a piece of the pie, albeit a small one. Is it wrong to strive for it optimistically, considering the possibility that one of the big players might acquire the venture if it proves profitable? There's nothing wrong with optimism and drive. Regarding social influencers venturing into unfamiliar business territory, some have successfully turned a profit through hard work, dedication, and a willingness to understand the nature of different sectors.

    The discussion isn't about blindly jumping into the massive retail industry without putting in the necessary effort and dedication. While your experience in the leading sporting sector is acknowledged, it doesn't discount the potential connections others may have with manufacturers, brands, and distributors in various partnerships. Who's to say they won't supply based on your experience, especially if the plan is interesting and backed by investors? Making a profit with a modest investment was the foundation of this discussion, and scaling is optional for those who strive in that direction.

    Yes, I intend to run this venture by myself😂, without the use of founders, co-founders, e-commerce managers, customer service specialists, marketing experts, inventory managers, fulfillment staff, social media teams, and content creators/copywriters. The answer to your rhetorical question is no, I don't intend to do this by myself.
     
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    Biz1990

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  • Jan 12, 2017
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    @Biz1990 You really do overthink your responses. You need to stop talking about big business and focus on small businesses making an impact. Talking about major brands makes you seem naive.


    One of my clients does exactly this and makes a very good living from it. He has exclusive access to surplus and runout stock from the biggest UK distributor in a particular product sector. Distributors will often offer massive discounts to clear stock. Recent additions to their surplus stock file will range in discount between 70% - 50% of their cost. The longer stock sits, the cheaper it gets. Some lines are sold as low as 10% of their cost. And this is the key. Buy at the right price and you can sell anything.
    Multi-channel selling has worked for him. Website, eBay and Amazon. He sells B2B at much better bulk pricing than his B2C pricing. The only advertising he does is email shots to his B2B retailers as new stock becomes available.
    And the icing on the cake .... It's all dropshipped.

    What you end up doing may not be this business model but the principle will be the same. Buy at the right price. Some people do that by throwing money into bulk purchasing and some people talk their way into an opportunity. Stop think about how the big players made created their brand and their buying power. You need to solve a problem for someone.
    Thanks for your response, mate. I'm not overthinking at all, just correcting those who seem to think I'm on this train to attack the BIG BOYS when I never said that. It was just some questions that have been severely taken out of proportion and turned into a tit-for-tat and "You don't know what you're doing", etc... It's starting to become quite amusing how one thread could really show a side to others' opinions, lol. Especially towards myself of which I am a successful businessman in my own right.

    Major brands are a benchmark for anyone's business to strive for. It's also a form of wishful thinking at times, which helps a person be optimistic. There's nothing wrong with thinking big to be big, within the realm of reality, of course. No one ever said this would be an easy ride; my efforts alone in responding and writing this thread would suggest otherwise. Is it just easy for anyone to make millions right? Of course not. That's naive. While I agree that you should never base your plans on major brands and should start with a small business first to make an impact, I agree with you, as I have agreed with others on this forum who have said the same thing.

    Your client is a perfect example of that; my hat's off to him. It's clients like him that inspire me to learn and venture out, as I have done with my previous businesses successfully.

    "What you end up doing may not be this business model but the principle will be the same. Buy at the right price. Some people do that by throwing money into bulk purchasing and some people talk their way into an opportunity. Stop think about how the big players made created their brand and their buying power. You need to solve a problem for someone."

    ^^
    Regarding your statement above, I 100% agree with it, and I thank you for your input.
     
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    Biz1990

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  • Jan 12, 2017
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    Why are you even thinking and quoting PLC's you should be concentrating on how to make a company you can grow to a few hundred thousand turnover which is making a good profit

    Forget the high flying if it was easy we would all be multi millionaires

    We all have or had dreams when starting a business but i doubt any of the posters on here had ambitions to be a PLC

    The bigger the company means different management to keep the profits coming in to pay the shareholders far different management than what is required for a startup

    Regarding AO things don't all go out of fashion have a look on Amazon for twin tub washing machines, someone is still making and more important selling them into just a different market from the 1960's
    I agree with you, and that's what I aim to do, as previously mentioned in the previous post I just responded to. You are right. Fortunately, I have a company that turns over good figures in our second profitable year. That too was a small start-up and currently does pretty well. Ambitions and striking the balance of feasibility is the key. Thanks, Chris, for your response. It's helpful.
     
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    Biz1990

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  • Jan 12, 2017
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    Sigh....

    That's an equally generic answer to the last one you gave, just replacing generic words like "manufacturers and retailers" with the name of a specific company "AO". I'm pretty sure you're just copying and pasting out of a textbook. It reminds me of what I'd read when I was studying A-level business.

    Anyway, whatever. Best of luck.
    No, mate, it isn't. You asked for an answer, you got it. It didn't match up to your rhetorical question because you already had your answer in your mind, through judgment without even knowing me, mate.

    Yep, 100% copying and pasting out of a textbook for A-level business. Congrats to you. Side note, I never did A-level business, though I started a very successful business with secured design patents that I licensed out to one of the biggest UK leading heating manufacturers, Fischer. But of course, that came with no business experience, strive, and drive whatsoever, late nights, captial etc... God !! Nowadays you need to have an A-level in business and a degree to be the most successful person on earth.😉😂

    Sigh...

    Thanks for the luck, mate. Likewise to you.
     
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    Biz1990

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  • Jan 12, 2017
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    Have you patented something and sold it to Fischer? Only you've never mentioned it.
    Yes, I did, look at the thread, I mentioned this previously. I haven't sold my patent to Fischer I license the patent exclusively to them contractually for royalties which is doing very well for me. Other companies such as hive/British gas have contacted me though I am currently contracted for that set period between myself and Fischer.
     
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    Biz1990

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  • Jan 12, 2017
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    Bet a quid you don’t make it.
    Ooo you would love that wouldn't you 🤣.The reality is, I've already made it respectfully speaking, I'm not financially tied, no debts, mortgage-free, running a profitable business with a highly growing investment wealth management portfolio, and achieved my success in the comfort of my life working day & night hard, whilst maintaining humility, perseverance, and strictness when necessary. But oh, guess I never made it. I bet you'd love that, wouldn't you? ;)😂🤣. Put ya bets on. The question is, what's your meaning of making it? Because your dynamics and understandings of mine are way off the mark son. Could be something small to start with. Good luck on your bet. 😁🤝
     
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    Biz1990

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  • Jan 12, 2017
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    so why are you talking about starting a business with the piddly sum of 5-10K it does not add up, your story grows after each post, afraid you got me biting on your make belief story. keep dreaming
    If you think starting a business with 10k is insignificant, mate, then I feel sorry for you. I started my current business on less than 10k. Some of the best products in recent years came from low initial investment but grew on gross to reinvest back, starting small and growing.

    If you're still hung up on my comments of starting a big retailer with 5k - 10k, it was a general question for broader opinions on limitations into creating such a business, even when starting small niche product/products 😂.

    Your initial impression without understanding/knowing me is too judgmental, mate. Do yourself a favour and look at well-documented business programs or books, like Dragons' Den, Shark Tank, etc. You’ll notice many people started their business less that 10k initially and went on to become very successful reinvesting and so fourth the more the sales came in.

    You seem quite stubborn lol, makes you wonder if your resistant to new ideas or differing perspectives. Now question that vs your version of my reality 😂🤣 because a lot of what you’ve said mate is B.S really on the basis of judgement and assumptions on things I haven’t even said. Creating a narrative on what you think i know/don’t know. But it’s been a great experience on this thread 🤣 amusing to say the least.

    Many people started their businesses for less than 10k. My story remains, mate; you just chose not to read my previous responses properly. You don't even know me to make such comments, which is bizarre. 😂

    It would be insightful to know your business story before questioning me, maybe i might take a punt and start questioning you mate. Keep biting on the make-believe, mate, and do yourself a disservice. I live in my reality, and such realities were once dreams and that can go for anyone, and who are you to judge them. 👍🏽
     
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    BusterBloodvessel

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  • Jan 22, 2018
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    OP,

    This has all got, as you say, very tit-for-tat and veered way off course. At the risk of completely wasting my breath (figuratively speaking), let me try to explain why this has gone the way it has but also try to make you understand some of peoples responses.

    You have come on and specifically asked for advice including stating that you are "struggling with a concise business plan", "perplexed about the initial steps", "unsure about the process" and specifically said "I'm seeking guidance on establishing a business similar to major industry players". As well as multiple references to AO, with it coming across (perhaps you didn't intend it to) that you want to emulate the way AO built from nothing.

    You have been given advice exactly around the subject you asked. You have been advised that established players secured large investments (we are not talking the £5k-£10k you mentioned, and not even the £40k you allured to at one point. We're talking many multiples of that). You have been advised that manufacturers will only discuss large volumes and you will struggle to deal with any of them directly. You have been advised that you will need to do research to establish the answers to some of your questions. You have been advised, by people working in the e-commerce sector, that you will struggle to get established, to get a supplier, or to compete with the competitors marketing spend. You have been advised that the .com boom and the "build it and they will come" days are completely over.

    This might not be the advice you wanted to hear, but when so many people with so many different backgrounds are all basically saying the same thing, it starts to tell you something.

    Let me make one thing clear: Some of this advice may have been delivered rather bluntly, however, none of it is a personal attack on you. It is not an attack on your abilities, your previous track record. or your ability to start or run a business. Well done (seriously, not patronisingly) on the previous business you sold and the product you developed and licensed. And well done on having £5k - £10k that you can afford to risk in a new business, because I will openly admit that's £5k - £10k more than I have spare at this moment in time!
     
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    BusterBloodvessel

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    You seem to have taken all of this as personal attacks on your abilities and then retaliated and lashed out including researching into other members' pasts and quite bizarrely asking people about their job/identity number etc. Well you are correct with your research, I am one of those members that has had a business dissolved :) I am not ashamed about it, in fact you will find multiple posts with me openly talking about it. Covid was a big player in my business failing but I will admit not the SOLE reason. I made mistakes. If anything, it makes me more qualified to come here and try and stop people making similar ones! Aside from that, I am proud to say I have been involved as an employee in some very successful businesses and very successful product developments & sales growth projects within those - skills and experience that transfer over into the "business owner" world. I could give examples of projects I've been involved in - at the moment I am helping to establish "business within a business" that we expect to turn over +$1m in sales in year one. But in terms of a pissing contest over who's done what, that's as far as we need to go 🤪 Other than to say we have been able to do that because we are focusing on something that we (I) know inside out, and we have been able to put together a solution that solves a real headache for people and make customers' lives easier. We didn't just dive into something completely new.

    There is an interesting article here about the Issa brothers, I'd suggest you give it a read: https://www.bbc.co.uk/news/business-68436330

    Two things in here stand out to me:

    "As the oil companies began selling off and closing their High Street petrol stations to concentrate on production and refining, the brothers took a chance to expand and joined forces with private equity firm TDR Capital to snap up the vacant sites."

    "Mr Issa claimed the pair got lucky. "We have been in the right place at the right time and taken advantage of some of them opportunities."

    It's been done once - buying one petrol station 23 years ago and getting to where they are today. Could you come along today and (a bit like you are saying) say "I'll start small - I'll just buy one petrol station but eventually I want to emulate what the Issa brothers did". It's not necessarily as easy as that, no matter how determined you are or how much self belief you have. They took advantage of circumstances and opportunities at the right time. As AO did, and as other businesses have.

    You are correct in that sometimes entrepreneurs wander into completely new spaces and have ideas or a vision to change things. Usually, in all fairness, when they have a few million quid they can afford to throw down the pan if needs be. And usually with already established teams to help escalate and move things very quickly. In your case, I would strongly advise perhaps looking a little closer to home, what other industries do you have some knowledge/experience/contacts in? Can you identify any pain points or ways you can improve/help? Or even if you do want to venture into something completely new, look for something slightly less complicated - perhaps something with a much less complex SKU count, something more niche where you can use a smaller marketing budget, something smaller that's easier to ship.... etc.

    Please, take the advice for what it is - to HELP you. Turning round and defending yourself and starting to tell us how you're mortgage free, got investments, have sold a business..... it's not a good look, and it's irrelevant to the advice being given. Like I said earlier, none of it is a personal attack and the best thing would be to step back, take all of the comments in with a "neutral" head on, and then reflect based on all the feedback on whether you really think this is a viable or worthwhile space to enter, or whether you could focus your energy, time and money on a different opportunity.
     
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    The actual issue in the white goods industry regarding losses on inventory revolves around the difficulty in accurately predicting consumer demand for specific appliance models.
    That is a retail issue, not MDA one!
     
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    Biz1990

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  • Jan 12, 2017
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    You seem to have taken all of this as personal attacks on your abilities and then retaliated and lashed out including researching into other members' pasts and quite bizarrely asking people about their job/identity number etc. Well you are correct with your research, I am one of those members that has had a business dissolved :) I am not ashamed about it, in fact you will find multiple posts with me openly talking about it. Covid was a big player in my business failing but I will admit not the SOLE reason. I made mistakes. If anything, it makes me more qualified to come here and try and stop people making similar ones! Aside from that, I am proud to say I have been involved as an employee in some very successful businesses and very successful product developments & sales growth projects within those - skills and experience that transfer over into the "business owner" world. I could give examples of projects I've been involved in - at the moment I am helping to establish "business within a business" that we expect to turn over +$1m in sales in year one. But in terms of a pissing contest over who's done what, that's as far as we need to go 🤪 Other than to say we have been able to do that because we are focusing on something that we (I) know inside out, and we have been able to put together a solution that solves a real headache for people and make customers' lives easier. We didn't just dive into something completely new.

    There is an interesting article here about the Issa brothers, I'd suggest you give it a read: https://www.bbc.co.uk/news/business-68436330

    Two things in here stand out to me:

    "As the oil companies began selling off and closing their High Street petrol stations to concentrate on production and refining, the brothers took a chance to expand and joined forces with private equity firm TDR Capital to snap up the vacant sites."

    "Mr Issa claimed the pair got lucky. "We have been in the right place at the right time and taken advantage of some of them opportunities."

    It's been done once - buying one petrol station 23 years ago and getting to where they are today. Could you come along today and (a bit like you are saying) say "I'll start small - I'll just buy one petrol station but eventually I want to emulate what the Issa brothers did". It's not necessarily as easy as that, no matter how determined you are or how much self belief you have. They took advantage of circumstances and opportunities at the right time. As AO did, and as other businesses have.

    You are correct in that sometimes entrepreneurs wander into completely new spaces and have ideas or a vision to change things. Usually, in all fairness, when they have a few million quid they can afford to throw down the pan if needs be. And usually with already established teams to help escalate and move things very quickly. In your case, I would strongly advise perhaps looking a little closer to home, what other industries do you have some knowledge/experience/contacts in? Can you identify any pain points or ways you can improve/help? Or even if you do want to venture into something completely new, look for something slightly less complicated - perhaps something with a much less complex SKU count, something more niche where you can use a smaller marketing budget, something smaller that's easier to ship.... etc.

    Please, take the advice for what it is - to HELP you. Turning round and defending yourself and starting to tell us how you're mortgage free, got investments, have sold a business..... it's not a good look, and it's irrelevant to the advice being given. Like I said earlier, none of it is a personal attack and the best thing would be to step back, take all of the comments in with a "neutral" head on, and then reflect based on all the feedback on whether you really think this is a viable or worthwhile space to enter, or whether you could focus your energy, time and money on a different opportunity.
    You've pointed this out correctly, >>>: You have come on and specifically asked for advice including stating that you are "struggling with a concise business plan", "perplexed about the initial steps", "unsure about the process" and specifically said "I'm seeking guidance on establishing a business similar to major industry players". As well as multiple references to AO, with it coming across (perhaps you didn't intend it to) that you want to emulate the way AO built from nothing.

    You go on to state that I was advised on numerous occasions. I agree that, from users within this thread, that was the case. However, for the vast majority, it was not constructive at all. There was no advice, just stupid sarcasm, pointless shutdown responses with no suggestion besides insult to my knowledge. At most, advice was met with sarcasm, not with advice that could actually help an individual.

    As you correctly pointed out, my intentions were mis-understood because of the way I initially wrote this thread. But beyond that, let's say a person came on this thread and really needed help but portrayed it incorrectly. Does that warrant individuals to shoot a person down and literally turn the thread into something beyond the original post, where it's long forgotten? I mean, you can't say that I roughed people the wrong way. 😂I never assumed. I never said I was taking on the "big boys," a term introduced by one of the users here. I never assumed anything; I just asked some questions for research purposes and maybe to grasp some information from somebody who may be well-informed in the retail sector. How does anyone else here know? Knowledge is power, right? And for that, I initiated it with my post.

    Regardless of how the post was narrated, it didn't warrant the path it took. Just because I stood up to initial sarcasm, it brought everyone else in for judgment and to shoot a person down, its pathetic, fortunately for myself I take this lightly and thrive on it, but seeing the same individuals do it to others on thier threads is beyond a joke.

    At the end of the day, I've been part of this website for years, and in all my threads, I've never met such a bunch of idiots (not all) who go on to try and belittle users on a site designed to help individuals. That's the part that surprises me. Imagine if this were an inexperienced business individual who knew nothing about business and wrote a thread that might not include decent business acumen and wrongful assumptions. Do you think idiots like this are going to help users or just put them off? There's a difference between right and wrong, mate, and the way things can be interpreted, as exemplified in this thread, we had good people who responded, and others who were just snobby.

    Hence my digging into certain users. Why, you may ask? Because I look at recent threads and see the same idiots doing it again with other users, just sarcastic snobby responses without any insightful information to help them but to belittle. So why not give them a taste of their own medicine and see how they feel? Petty, you could say, and I agree with you, but at the end of the day, this thread is now beyond its cause because of idiots, and I'm beyond any helpful information needed as I have already thanked those who responded with great information. Let's not deny that this thread is beyond the OP as well, pointed out by @Mark T Jones.

    Nothing to do with me taking things personally, on the contrary, I'm actually enjoying and thriving on users like this who go on to challenge hardworking individuals who ask innocent questions only to be belittled. It's why I got far in my business life; however, I always remained humble until you bump into certain snobby characters. What you tend to find is that it's these characters who have the problems and give it large.

    Identity numbers, well @MRQ, your fellow user was giving it large to another user over nothing, started chatting absolute bull about him being a police officer and journalist without any relevance to that user's thread and business. Again, being snobby, so why not ask for his badge number and challenge him? It's within UK law and rights, as I'd like to do a subject access request, plus him spamming this whole thread with his reactions. Well, let's have fun, lol.🤣🤣

    As for your comments concerning your own business being dissolved in response to my previous comment, I praise your respectful response and efforts in your last large posts, and I thank you for that and your comments. In addition to your journey in business and successes ahead. The advice you gave concerning the Issa brothers, in addition to the advice you gave in the last two paragraphs, I definitely will take on board, and thank you for that. Your last two posts, I definitely see them as HELP, and some others.

    I agree with what your saying, though, when you get certain individuals who belittle, and I've seen a few recent threads after this experience where I've seen the same individual going out of their way to make people look stupid, it's not right. As much as I will take this and your respectful response as neutral and helpful, to others I will not, as sometimes you have to state the obvious to individuals about your own personal life, i.e., mortgage business, etc., especially when digs are being given without any reason, besides. It's not fair to treat people like that.

    I'll admit, I dug out those concerning their business histories, and you felt it necessary to explain, as did I when being dug at. So you understand the reasons why.

    Anyways, praise and thanks to you for your responses and helpful advice, truly. Thanks again.

    and oh I actually like salt & vinegar with my chips and pot of curry on side. Cant beat that from a good old chippy now can ya 😉😂
     
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