Stock // new Ecommerce venture.

[gweb]

Hi all,

I have a very specific eCommerce venture about to get going - I've spent a LONG time getting the site right, the name, brand, etc etc...

Now, I am involved with the field that this new store relates to (a specific sport) but I have no rep with regard suppliers.

My questions are as follows:

• Do I approach suppliers / distributors now; even though the site isn't finished (it's 90% done) so that I can hit the ground running? Or will a supplier need to see a finished store up and running (especially if it's a brand new business relationship we'll be sparking up)?
• I will be asked for references. How can I have any if it's a new store / venture? I have money put aside should I need to buy some stock in but it will only go so far. Sale or return?

I am very confident about this and I know that once up and running, it will be a success, however; it's the growing pains that I need to deal with right now. Any advice is much appreciated.

Thanks.

 

[kulture]

Suppliers do not need reputation if you pay up front. Normally whatever your trading history you pay up front for at least the first invoice. To prove you are a business then you can get a reference from your accountant and your bank.

Good luck. It takes a lot more than building a site to making it a success.

 

[gweb]

Thanks Kulture,

I suppose what I was saying was that - I can afford to pay up front for some stock but they'll be things that I'd like to stock at launch that I might not be able to pay for in the first instance; any way around that?

I have a great record with my bank; I have five mortgages running right now as I develop properties and I've never been a penny in debt; I just don't know how much all of that counts for in this instance. Some of the stock I'd like will run into the thousands so I can imagine they'll be wary on first contact and that I'll have to work up to it most probably.

I realise the site is only one part but it's one of the most important pieces of the puzzle; luckily, I dabble in web design and togther with a developer, we've managed what I think is the most user-friendly and inviting site in this field - but yes, it's only the first step. Many more steps to go.

 

[TotallySport]

No supplier will ever off sale or return, the sports industry is still a little slow and alot of suppliers want retail premises or at least business premises, but if you contact them and ask they will happily tell you.

Alot will depend on the sport and alot will depend on the supplier. But without more info its impossible to say, I would have approach suppliers before you started building the site, that way you knew if you could even sell anything or not.

 

[gweb]

Hi TS, I already know that there are things I can stock - I've just yet to approach the big names. This isn't mainstream sport; it's motorsport and I have most things in place; many of the smaller companies I have already spoken with care not about retail space. It is merely a question of what can I get from the big names in this field having only just launched and without a rep as yet. It will come, it's just that the more I can have at launch the better. We will see.

 

[oldeagleeye]

You will not get sale or return or any other credit from suppliers until you have established a track record with the typically 6 months min.

You say that you have 5 mortgages with the bank. Mortgages are not an asset they are a debt so you in 5 times more debt that most people. It is how much forced sale equity that you have in the lot that counts.

If you bought these properties over the last 3 years and on a virtually non-status basis not I lot I would suggest.

With rises in interest rates on the horizon I would be looking at battening down the hatches if I were you rather than investing in a business you know nothing about and frankly you don't.

How for instance could you possibly have a business plan let alone a cash flow forecast it you haven't already contacted suppliers. You don't know what trade discounts that they would offer you.

You talk about getting the branding right. Branding don't mean didly squat for a small company unless you throw £500,000 to £5,000,000 at promoting it

You talk about E-commerce. Do you even have a clue what merchant fees will be. What the postage per item will be. Together they could amount to anything from 5% upwards off your turnover.

You talk about dabbling in web design but if I were to ask you what the typical bounce or conversion rate even on a well designed site would you know. I doubt it.

I am sorry OP but you are not anywhere near to launching a biz yet. Forget the web site then. Go to work on the biz plan.

Establish what your costs will be. Research the market and find out what the compeitors are offering and whether or not you can compete. Where you see yourself in the marketplace. Then work out your marketing strategy and how much that will cost.

By the sound of it by the time you have done all that you won't have a penny left for any stock.

Then it's decission time OP. You already have a huge debt. Do you want to take on more.

Rob

 

[gweb]

You will not get sale or return or any other credit from suppliers until you have established a track record with the typically 6 months min.

Gotcha; noted.

You say that you have 5 mortgages with the bank. Mortgages are not an asset they are a debt so you in 5 times more debt that most people. It is how much forced sale equity that you have in the lot that counts.

Fair point.

If you bought these properties over the last 3 years and on a virtually non-status basis not I lot I would suggest.

OK; all properties bar one were bought within the last year and have all been repossesions. I now have a great relationship with my bank wherein I borrow to buy some poor sod's house / apartment; make improvements and shift on for a profit. I suppose I was asking whether a bank reference would count for anything as they would surely give me one and it'd be glowing

With rises in interest rates on the horizon I would be looking at battening down the hatches if I were you rather than investing in a business you know nothing about and frankly you don't

I already have products from smaller companies lined up to go and while my life doesn't depend on this; it's a field I am involved with intimately; just never as an online retailer. I know the sport well but have to confess some naivety with regard the first stages of getting some of the big boys on board.

How for instance could you possibly have a business plan let alone a cash flow forecast it you haven't already contacted suppliers. You don't know what trade discounts that they would offer you.

Fair point.

You talk about getting the branding right. Branding don't mean didly squat for a small company unless you throw £500,000 to £5,000,000 at promoting it

I'd not need to spend anything close to that to establish a brand in certain sectors. I have a proven track record of this so the numbers here are ridiculous unless you think I'm going up against some high street names; which I'm not. I've worked for clients in the past and given them a strong presence for a tiny fraction of your numbers... so can't agree on that. I'm all for being clever with stuff and not chucking wads of cash at it. I'm very confident when it comes to this.

You talk about E-commerce. Do you even have a clue what merchant fees will be. What the postage per item will be. Together they could amount to anything from 5% upwards off your turnover.

I can answer yes to these, thankfully!

You talk about dabbling in web design but if I were to ask you what the typical bounce or conversion rate even on a well designed site would you know. I doubt it.

I would know... so your assumption is way off I work for clients in the music industry and know all about dreaded bounce rates, goals and all all the related shenanigans; so no worries there.

I am sorry OP but you are not anywhere near to launching a biz yet. Forget the web site then. Go to work on the biz plan.

I think you might have a point here; in as much as - I have been very focussed on getting the site right; organising racers to sponsor and lining up some of the smaller companies without going into enough depth with regard the big names, numbers and any projections resulting from that.

Establish what your costs will be. Research the market and find out what the compeitors are offering and whether or not you can compete. Where you see yourself in the marketplace. Then work out your marketing strategy and how much that will cost.

I know all of the competitors and I have a spreadsheet with all of the products I will look to sell and sale prices across the board. There's more to be done here; that's for sure, I think you're right.

By the sound of it by the time you have done all that you won't have a penny left for any stock.

Money won't be a problem for the most part and I will easily be able to launch with a fair range of stuff. I just want to have as much as possible online, ready to go at launch hence my original question. I have also researched a contingency... and I do pretty well on eBay... any stock I have that I find an issue; I know what they go for on eBay and can sell easily on there. Not ideal; as I want the online store to be the hub but good to know that the thigs I look to sell, do sell on eBay and for good prices. Some of it is rare too; so competition isn't that heavy.

Then it's decission time OP. You already have a huge debt. Do you want to take on more.

Huge debt? I suppose you mean the £5,000,000 markting budget I'll need! In reality; I'll not get into debt over this. I have good standing and I'll not compromise that.

Anyway, some food for thought. Thanks. I'll post up the link once we're up and running.

 

[JamieM]

Whilst I agree there needs to be an element of planning and getting the figures right, I'm more from the school of getting on and doing stuff. For e-commerce working out profitability is pretty simple.

Personally I would just get on and get speaking to the suppliers and discuss how you can work together and take it from there.

Good luck with it all!

 

[oldeagleeye]

Glad you took what were meant to be constructive comments OP as just that. So many younsters on here take any negative comment as personal.

Top man then for being a fellow professional. A couple of points then.

1) Branding really isn't that important unless it is a household name like John Lewis with a reputation for service and even in the high end sportswear industry like trainers it only comes into it's own if the new new products become fashionable and that can be a hit or miss affair as far as the public are concerned. I would treat branding then as just trying to establish a cult folowing of loyal customers to gain repeat business rather than seeking your products for the first time as a 'must have'

2) When comparing your web site with Ebay remember that potential customers already know where in cyberspace the Ebay store is. It is just a matter then of searching up and down the shelves.

With an individual web site they first have to find you and that means setting aside a decent budget for marketing on SEO. PPC and Adsense etc.

BTW. If your not aware. You mentioned posting your URL on here to let us see the site. There are more benefits than just a bit of feedback. Apparently this can help with SEO as it's such a big forum and if you look at the home page with who is on-line at any time you will see the Search Engine spiders crawling all over the place. May be worth joining lots of other forums too including the sports ones.

3) Back to the spondolix. You said you are used to dealing with the smaller suppliers and may be a bit shy on asking the big players for discounts thinking that you might be being cheeky. Don't worry about it.

Cash talks even with the big boys and especially these days so hold out for at least 10% - 15% more than what they say is their best offer. If they have to they will work on a tiny margin if they have stock and see a good account on the horizon.

Good luck.

Rob

 

[TotallySport]

Sounds like your on the right track, and I know naff all about motors sports, the only thing I can think of is Puma, is very protective of the F1 range, and getting a Puma account will prove very hard and they will expect retail premises, unless you know someone that knows someone, which might give you a better chance.

Good Luck

 

[gweb]

Thanks for the feedback guys. It has all been taken on board and given me some food for thought. I've already changed my focus somewhat to take more account of getting my figures right from the start. I was winging it to some extent I'll confess, on that front.

TS, I imagine you're right about Puma; they do make some great race suits and boots and they are on my list but as you said, their requirements may well be more than I can match. No harm in asking though!

Eagleeye, when you said 'shy to approach...' that's probably the right way to describe it! All being well, I'll make contact - I have a huge DOC with a list of every supplier that I need to get in touch with so I'll start working my way through that this week.

I'll definetly post a link up once the site is done

 

[oldeagleeye]

Just one final thought OP. Don't mention anything to do with Ebay in your discussions with suppliers. They will altomatically assume that you are going to devalue the brand by going the huge discounts route.

Likewise make it clear that any on-line presence with be up-market and not discounting to the detriment of the suppliers retail shops. You can later get around that by offering special promotions that offer the customer added value perhaps a freebie from the same company meaning your order will be bigger.

Regards Rob

 

[gweb]

Just one final thought OP. Don't mention anything to do with Ebay in your discussions with suppliers. They will altomatically assume that you are going to devalue the brand by going the huge discounts route.

Likewise make it clear that any on-line presence with be up-market and not discounting to the detriment of the suppliers retail shops. You can later get around that by offering special promotions that offer the customer added value perhaps a freebie from the same company meaning your order will be bigger.

Regards Rob

I'd not thought of this and it makes complete sense. Great advice and I will take heed, rest assured. I will use eBay as a backup but you're right; I can see how suppliers might think ill of the whole operation if I were to mention it. Thanks for this.

 

[quikshop]

Some great replies to the OPs original ask but don't get too hung up about approaching suppliers.

I'm helping a friend set up an Ecommerce business in the cricket market. Its his first time selling online and with just a simple, polite and clear enquiry to all major cricket manufacturers he's had provisional acceptances from several large players including Adidas.

As long as you come across as confident and enthusiastic in your own venture most* suppliers will be more than happy to help you.

*There are still some suppliers in major markets who deem online-only retail as the devils own business... if you have a proper business premises then it increases the likelihood of more suppliers playing ball.

 

[gweb]

As promised, I have my online store up and running and below is a link; I have only a fraction of the stock that I plan for as I'm now talking with some of the bigger suppliers... however, what's amazing is that, despite having not 'officially' launched - by Google alone, there's been quite a few sales. I'm happy with how it's going and I've yet to really 'lift-off' yet. There's quite a few 'coming soon' pages while i await more stock / lines.

Thanks again for all of the tips in here, I took on board everything.

Link: Grid Kings

 

[TheDude]

Nice site .....

 

[oldeagleeye]

I must admit Gweb that is a great site far more professional than I expected and i particularly like the transparency on returns right up at the top not hidden away. Great graphics and transparency that shouts out professional and a safe company to trust with your money with.

Full marks then for the graphics and the transition from an Ebay wannabe entrepreneur to the MD of a fully fledged E-com Business.

Rob

 

[gweb]

I must admit Gweb that is a great site far more professional than I expected and i particularly like the transparency on returns right up at the top not hidden away. Great graphics and transparency that shouts out professional and a safe company to trust with your money with.

Full marks then for the graphics and the transition from an Ebay wannabe entrepreneur to the MD of a fully fledged E-com Business.

Rob

Thank you for the vote of confidence! I had some headaches such as getting the SSL to load with no errors and the like but I feel like I can concentrate on getting more stuff in now...

Thanks again for the tips and I'll continue to absorb ideas and comments on these forums. It's already been a great help.

 

[gweb]

Hi all,

Rather than start a whole new thread, I thought I'd continue in this one.

I have now secured deals, with regard, getting stock in from some of the major manufacturers / brands in my field (it took some time!) but the cogs are now in motion - I now have to think about stock levels and; what if I buy in stuff that simply doesn't sell. I will give you an example, an obscure size of helmet; I am unsure whether to buy one in or get a few. With stock that does not look like it will be selling, what are the common practices? Is it usual to strike a deal with a supplier stating that, within reason, returning goods unsold within a certain time frame (example: when next season's goods are released) can be considered? Or is it the case, that simply, whatever I buy in; I must sell - in which case, as a buyer, I should be careful when considering what quantities to buy in of each and every product.

Thank you again for any help.

 

[TotallySport]

what evidence do you have it won't sell? This boils down to experience, and the more you get the better you will be at it.

 

[gweb]

what evidence do you have it won't sell? This boils down to experience, and the more you get the better you will be at it.

You're right, experience is the key but as I plan on stocking a whole new set of products - I am unaware, for example, of how in demand certain sizes are of specific products - so I debate whether it's worth buying in something so I can at least say that I have it ... or possibly forgoing anything I deem as 'off the beaten track' with regard size / colour options etc etc. Maybe this is the safest route to begin with. I just wondered whether there were any common practices with regard return of stock to suppliers.

 

[TotallySport]

i have always found the alot of the time the things I buy thinking they won't sell do ok, mainly becuase no one else has them, odd sizes can be hard to find so can go well, its all about testing the water safely, and building up product knowledge in order to maximise the turn over. If your ordering for the first time, keep orders small and cover a number of areas, then you can building with a good knowledge, and keep building.

 

[TotallySport]

oh, returning stock to suppliers because you messed up, is generally a massive not a change, or it will cost you more to send it back that it would to sell it, simply reduce the price and sell it, and move on never to buy it again.

 

[gweb]

oh, returning stock to suppliers because you messed up, is generally a massive not a change, or it will cost you more to send it back that it would to sell it, simply reduce the price and sell it, and move on never to buy it again.

Fair enough, I have taken this onboard. Thank you.

 

[oldeagleeye]

Suppliers rarely accept returns apart from faulty goods. That is why retailers have sales during the year to get rid of old stock.

If your carrying a wide range of stock I would stick to the most popular sizes. XL & XXL sizes usually come at a premium so even on ordering in you could use this for special delivery without the customers having to wait an undue time.

Rob