Right where to start.. Some advice needed for Novice

[Jimmynewbusiness]

Hi everyone, Im looking for a bit of info please

Im currently thinking about setting up an online store, selling primarily 'Heritage' classic british brands, i think if i stocked the right type of brands and hand picked the correct style of clothes to accomodate (from a bit of consumer research i have done) then i think i could find a niche market.

Ok so i have the brand idea a rough business plan, so was looking for some answers to some rather basic questions (this i apologies in advance for!)

If i get my website up and running do you think it is best then to approach the retailers themself direct? what is the best method to do this?

My friend has quite a reputable shop in the centre of newcastle and he reckons he has some room available to stock some of the brands i would look to bring onboard.

So the next question if i put together a decent proposal to the brands i would like to stock how does it work with stocking the items, do i buy bulk at a reduced price from suppliers and then make the money from the difference in the pricing?is there much money to make? im a little lost really with the whole thing and obviously i want to research and cover all areas before putting in any real financial input.

Originally i wanted to just sell online but this oppourunity has come up with a shop and i think it would look a lot more proffesional to have somewhere people can actually see the items im selling.

Its quite difficult to predict a financial forecast on items because i think that i would like to get all my ideas together and sorted before going to the brands as i want to look more proffesional, but then i dont know what sort of prices they will offer me as a retailer!

Wow apologies for the long post this is my first attempt at retail or my own business so please bare with me but any input anyone has would be greatly appreciated or if anyone could direct me to somewhere i could research this would be great! Thanks for reading!

 

[rocksroses]

Hi there,

I'm not much of an expert either however I am opening my own store at the beginning of March.

When I decided what I wanted to sell, I worked out my financial situation so I had a good grounding to start from. Then work out how much you can afford to spend on different brands, over estimate their prices, so that you always have a worst case scenario. If you know what they charge wholesale already thats even better.

I then contacted suppliers that I knew I wanted to stock- when they are selling to you, they want your business. In most cases you will find that they will want you to take their brands on board.

I would definitely suggest going for less well known brands, which automatically gives your business a unique selling point- if people can't get it anywhere else they will have to come to you. With these people you are more likely to get a better deal because they will want to become well known, and like you have to start some where.

Making money in retail is difficult, but if you get it right of course there is money to be made. You just need to get your stock at good prices, and depending on your target market, you can double or even treble the cost price.

Personally I would contact the suppliers first, you then know exactly the costs before you commit to their company. If you buy in bulk there will most likely be a discount, but be careful because you don't want to end up with too much to start off with! If your selling predominantly online the consumer needn't know that you only have 1 of each size in a particular item, if someone orders 2 x Medium t-shirts, just order another, but factor this into your delivery time scales (you will need to find out how quickly the supplier can deliver to you, for you to then deliver to the customer) alternatively once you sell 1 x M put 'back soon' and order another straight away....

As for not committing financially before starting off I would say is playing it safe, work out how much you can afford and start from there, once the ball is rolling just go with it, otherwise you could just be planning forever. (Start small- if your online no-one would know what is actually happening behind the scenes, you can test the water that way.) If you start with a shop, you really do have to go the 'whole hog' as they say- in saying that though, it's exactly what i've done, you just have to decide what would best suit the business and go for it.

I seem to be a waffler to, hope this helps a little!

 

[Jimmynewbusiness]

No thats great thanks again for your response, so you reckon i would be better approaching the prospective brands now? So bearing in mind all i have at the minute is a name and an idea how do you think would be the best way to approach them? Just by emailing them or trying to set up some sort of a meeting?

I did understand that the margins to start with would be quite minimal on the bigger brands, but initially i do have another job so the financial aspect is not as major as in i have to take a wage out of it, but i do want to be able to establish the name and eventually make some money off it!

In the future i would like to design and make my own brand under the company logo, my friend who has a shop in town makes his own clothes but they dont really fall under my design model idea for style etc, but he can help me later down the line.

Thanks again for your comments there greatly appreciated!

 

[j600com]

Hi,

Having a b&M store is a requirement for some brands, they won't supply you if you plan to be online only - so bare this in mind when approaching them.

Also, niche brands may work in-store but be sure to research them online before thinking these niche brands will work on the web. With online retail, it's no longer a case of 'build it and they will come' you'll need a marketing strategy and budget to get people to the website. Having brands people are looking for is the easiest (and cheapest) route to market as these products will draw customers in to the site (at which point you can cross-sell alternatives to them).

In order to see which brands will be popular online use Google's Keyword Tool <-- click that link. Don't worry too much/get too excited about the actual numbers Google gives you, but use it as a guide to see which brands are popular (and which aren't).

I would suggest getting your brand developed before approaching them, you'll look much better having professional business cards, letterheads and so on - and this is something you'll get done for peanuts (but it goes a long way). You could even go one step further and register your domain name and put a basic (again peanuts) holding page up with a coming soon message. This will do two things, it will show that you are serious about the project - but also give Google a chance to start indexing the domain.

Hope this helps.

oh ps. you should get yourself along to the trade shows (unfortunately you've just missed spring fair) but this month you've also got MODA, Pure and Stitch Menswear.

 

[rocksroses]

Well obviously it will really depend on the brands that you are going to approach, if just for example is was Barbour, they would probably want to know what your plans are for the business, and how you will 'show off' their brand. If you're only a new company how will you get the word out there, that you have all these great brands...?
The other thing is, Barbour in South Shields sells seconds and end of line clothing- if companies have something like this, you could approach them as a new business testing the water and take some of their end of line items, just to see if you can get the name out there and make some sales, before committing to buying new collections from them.

If you look at brands that are less well known, just by contacting them about stocking their items they are more likely to get back in touch with a new business.

I would definitely contact them first but from the angle of - here is what i'm doing (not planning to do) so they think that the ball is rolling. It gives you the opportunity to get all the info you need before having everything ready to go, and realising you can't get the brand or in fact don't want it.

One thing I would point out is that with some companies they can only offer items to maybe 1 stockist in a certain area- so if you know someone else in the same area with their clothing, you may not be allowed to stock it anyway.

I would email them (see if they have a wholesale or stockist page you can access on their websites) then I would call them to follow up your query. If they are larger corporations, you may have to chase them up.

Good luck!

 

[Jimmynewbusiness]

That was the way i was thinking, i want to get everything together so i can showcase what i plan to do, thats a good idea for letterheads and business cards etc, thanks.

As i say ive got a lad working on my website now but hes going to create the skeleton platform on which i plan to exhibit my selected items,

I have been selling on ebay for the past few months and my items have been very successfull, ive had a lot of interest and managed to gather a substantial (for the timescale) mailing list of 300 plus buyers. The reason for moving away from ebay is due to there charges which hit your profits hard.

I have an option of putting some of my items in my friends shop in newcastle so maybe i could use that as an bargaining tool with the brands also, i just need to get all my ideas together i think so i can approach these brands with my full concept, Im just wondering if you know or not whether you have to buy stock as you go with brands or you have to bulk order them? i know this may be a bit of a generalised question but its important for me to gauge what stock how much etc i need to get.

Thanks for all your help!

 

[j600com]

As i say ive got a lad working on my website now but hes going to create the skeleton platform on which i plan to exhibit my selected items,

I have been selling on ebay for the past few months and my items have been very successfull, ive had a lot of interest and managed to gather a substantial (for the timescale) mailing list of 300 plus buyers. The reason for moving away from ebay is due to there charges which hit your profits hard.

Don't build a skeleton site if its going to look empty and weak. A strong holding page is actually more powerful than a poor website - you need to look like you are taking it seriously, so be careful if your friend doesn't have a background in building striking designs. My dentist designs websites, as do most school kids nowadays - but they aren't the types of sites that will win brands over

With regard to eBay, do not fall into the trap of thinking the website is going to cost you far less to run than an eBay store. Yes eBay take fees, but they also process your card payments, host your web store and do all of your marketing for you. Overall eBay may take say 10% of your sale, having a website will be exactly the same - especially in the early years; because you'll need to host the website, market the website and process the payments yourself (none of these are free) and if your overall running costs to process a sale (including marketing) were 10% you're doing well!

 

[Jimmynewbusiness]

No i totally agree, i think i perhaps used the wrong work there as skeleton, basically the web site will be complete and finished just waiting to add stock (which i am collectiong today) my friend who owns the shops has already designed many ecommerce sites and also his own shops site which is very proffesional, he worked in london with a web design company and is a very successfull guy. SO i have no worries there.

With regards to ebay i do agree with what your saying but the final sale fee is rediculous including the paypal fee, the listing fee, etc i just think that even if i manage to save 2-3% on there then it should financially put me in better stead, also you have a lot more flexibility and scope with your own site, Dont get me wrong though i will still be listing stock through ebay as at the min its quite a good earner, but im going to use this money i make and invest into my web shop.

With regards to Barbour they are definately on my radar, ive been to there factory shop and its good but there are signs everywhere stating that you can only buy for your personal use and not sell on! surely though if you made an offer to take £2000 of stock off them each month they would be interested?

Thanks again

 

[rocksroses]

Yes in their actual factory shop it will say for personal use, however if you went and spoke to someone or got in touch with their head office, you would probably manage to secure a deal on their seconds before they hit the outlet.
In saying that if you're wanting to spend £2000 a month with them, you may as well approach them as a current collection stockist...apart from the big high street stores I would imagine very few stockists offering them that amount of ordering every month.

 

[Jimmynewbusiness]

Thats great, im going to draft up all my ideas and try to collate something to approach them with next week, i really want to get the website up and running have got a small amount of stock in already so want to get some photos done this week to get uploaded onto the website,

Anyway if you have any more info i might find usefull please let me know.

Thanks again

James

 

[liongroup]

With regard to eBay, do not fall into the trap of thinking the website is going to cost you far less to run than an eBay store. Yes eBay take fees, but they also process your card payments, host your web store and do all of your marketing for you. Overall eBay may take say 10% of your sale, having a website will be exactly the same - especially in the early years; because you'll need to host the website, market the website and process the payments yourself (none of these are free) and if your overall running costs to process a sale (including marketing) were 10% you're doing well!

This is good advice. It's probably easier to start on marketplaces such as Gumtree, eBay and Amazon over building and hosting your own store. As mentioned above, marketplaces allow you to focus on the offline element i.e fulfilling orders, shipping, business administration. Hosting your own store, you have these things to manage as well as the technical administration of an online store. Often, this is larger than most anticipate.