Where's the logic please....

[silvermusic]

. . . . .Back to the thread title.

There is no logic in selling on eBay with margins that don't give you a profit to survive.

You cannot use eBay with a product as a loss leader as they will only buy that one product off you.

A supermarket can attract customers with loss leaders, as they often do, knowing full well that they will be sufficient other items to make their margins.

Absolutely agree with that 100%. You'd make more money paying staff to do nothing than sending stock out at a loss. Too many fall into the trap of thinking they can use loss leaders on eBay to make money through other methods, up-selling, cross-selling, getting them to buy from their own web site, etc. It doesn't work, it hasn't worked for many years, maybe ten or more years ago it did, but those days are long gone. eBay buyers are price whores and expert in finding the best deal on the product, they care about little else and have zero loyalty, not that many customers anywhere do nowadays.

 

[MOIC]

I'd close now and be done with it. Preserve what you have left and to be honest, if you don't have £20k to put into new machinery then the business must be pretty much living hand to mouth or running at a loss already. Put it down for everyone's sake.

I hate defeatism but you have refused to modernise for seemingly decades and have gone from the forefront of innovation to the back of the class. The tipping point has been reached and momentum will carry you overboard whatever is done. The only decision left is how much can you save ?

What you can build from the ashes is another thing. You identify the need for more balance in the cost base and without this, you are doomed in any industry.

The soft side of the business, the people, cannot all be blind to the situation. Get their redundancy over with and start planning an exit strategy. Whilst you continue to battle onwards, all you are really doing is eroding what little you have left, both financially and in terms of resolve.

A sad day but it is time for hard decisions.

Agree totally with above.

There is no other decision to make ( if the OP has highlighted the situation correctly)

It's far better to be in control of your destiny and make the important decisions while you are able to do it.

 

[Davek0974]

As it happens, I do agree with that resolution, I did some months back when things got bad, but as a manager, I do not carry the sort of clout to push the issue. Even my meagre business sense was telling me that it was time to end it, or branch out into a completely different direction so there was two income streams, I did try.

Knowing my brother, I can see totally where his reasoning is coming from though, looking after the staff has always rated very highly and until now it's worked very well. Personally speaking, I am sticking until the door closes and will do whatever I can to help.

Ultimately he and his wife will have to make the final decision alone, I can only throw suggestions on the table and this thread has given me a few, thanks.

 

[MOIC]

It may be beneficial to show your brother and his wife some of the comments on this thread.

Most posters offer advice based on experience and of (perhaps) being in a similar situation.

Obviously, every business has a unique set of circumstances, but ultimately being in denial of a situation does not help the owners cause and definitely does not help those of the staff.

Best of luck with how it goes.

They should not shoot the messenger!

 

[Davek0974]

Thanks, yes I will, at the earliest opportunity.

There is some good stuff here, as always.

 

[mrsdoc]

Dave
I've done wedding stationery and wondering if there could be a gap in the market for an envelopments type business on this side of the Atlantic. www.envelopments.com
I'm a member of a wedding stationery forum, US based, and they all seem to be able to buy cardstock, envelopes, pocketfolds etc in a range of colours, sizes, designs. Obviously there would be an investment but wondering if this could be something to set you apart? If you can't go cheaper then maybe go premium?

 

[Fencer]

Hi Dave
You have my sympathy, tough position to be in and it can grind you down. I know nothing about the industry so probably my comments are irrelevant but for what it's worth I buy cards to correspond with favourite customers and friends and pay fairly serious money for good quality cards I know they'll really enjoy - Papyrus type. I also pay roughly £7 each for fold-out or swinging cards for my children or for anyone they'll be giving cards to and if I could find something similar that they could play with and colour in themselves I would pay more, it's worth it for the pleasure of physical objects over computer games. I'm sure I'm not the only one who who'll go to all that effort (25 mile drive to shop plus cost of purchases) for what is basically a card toy, it's just a thought. Good luck.

 

[MOIC]

Thanks, yes I will, at the earliest opportunity.

There is some good stuff here, as always.

Did you arrange the meeting?

If so, how did it go?

 

[Lucan Unlordly]

We set out to undercut the market, increasing volume sales and number of customers which gave us greater purchasing power. Not only could we negotiate better prices from our suppliers we were also front of the queue to bulk buy discontinued lines. Now we undercut the market by pennies not pounds, hold stock and have a premium priced range for those that want it. Most importantly we have loyal customers.

I'm not saying it was quick or easy or particularly profitable at first but sometimes you have to cut your way into the market.