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How would you run a business like this? Would it potentially suceed?

AERo

Well-known member
Joined
Dec 17, 2007
Messages
148
Ok, say you can get a moderate quantity of
items, such as LCD TVs (42inch to 19inch), MP3 players/media players
(1GB~4GB), GPS navigation systems, bluetooth speakers,
digital photo frames, etc. ; directly from a manufacturer.

Upside, the sale price of the items would be much lower than any of
the competitors, since there is no supplier in the middle taking some
margin of the costs. :biggrin:

Downside; one can't really provide a in-store warranty since there is
no "store" per say; so the customer will have the warranty from
the manufacturer. And also, the shipping costs. :sad:
(It would most likely start off as an @home office)


Well, this isn't a fictional thing, fyi.

I can, literally get around 100 pieces of each item
I've listed at the top (TVs to picture frames) at
base cost (the manufacturer's price).

These items aren't 3rd rate out of the factory oems.
They'll be retail items with manufacturer warranty,
and a service/RMA warehouse located in the GTA, Ontario.

Hence I would be shaving off about >10% of the margin
that retailers charge on products.
(Remember, places like Bestbuy, theSource, etc. have
margins that actually surmount up to 35%! :shok:)

For example: *AT THE BARE MINIMUM OF MARGINAL COSTS
A TV that costs $200 to build, will be sold
at $220 to supplier from the manufacturer with a 10% margin.
The supplier then put on a 10% margin on that then sells
it to the retailer; thus at $242.
The retailer put on another 10% margin to increase the
conclusive sales price to $266.20
*At the bare minimum of costs, I would be able to shave off
10% off the regular retail price.


In conclusion, I was wondering if anyone had any
experiences with starting up a business or any useful
input I can consider for my future endeavour, if I
chose so to pursue it.


How would you start up/run a business like this?

Any input? :help:



Just for specifics, majority of the items are retail, South Korean and
contain Samsung or LG parts, so the quality ranges from Great to Good. :up:
 

AERo

Well-known member
Joined
Dec 17, 2007
Messages
148
BTW, just incase one mistakens this for some kind of
f***ed up advertisement or pyramid scheme of somekind.

I AM NOT OFFERING SERVICES OR SALES OF ANY KIND!

I AM LOOKING FOR INPUT AND COMMENTS THAT WILL
HELP MY FUTURE ENDEAVOURS, IF I CHOOSE SO TO
PURSUE THEM.



If it does look f***ed up since it is my first post on this
forums, let me apologize.

I usually log on to forums such as xtremesystems, hardocp
and video card forum as topaimz.
You might see a post on xtremesystems as same as this one.

However, being a Canadian, I think getting help from
fellow Canadians would help me out more so then on a
forum with a international stage.
 

Babrbarossa

Well-known member
Joined
Dec 2, 2006
Messages
3,729
Location
New Brunswick
Website
www.unbf.ca
On the big selling items, the markup at places like NCIX is not very big- they also get volume discounts so they can undercut the smaller vendor who isn't buying CPUs in the 1000's- you might be well off to open an ebay store or something if you think your prices are good, but the computer hardware biz is not an easy one.
 

AERo

Well-known member
Joined
Dec 17, 2007
Messages
148
Thank you for the input Mr. Babrbarossa.

Nevertheless, as listed on the post, my stock of items
will lean more towards the consumer electronics department
(TVs, navigation systems, mp3/media players, picture frames, etc.)

Computer retail industry is a cut throat world, and I know you
won't survive unless you have "connections". :haha:


Only thing I don't want to take the "ebay" route for is
the fact that ebay increases commision every couple
months (especially on high priced items...)
 

Babrbarossa

Well-known member
Joined
Dec 2, 2006
Messages
3,729
Location
New Brunswick
Website
www.unbf.ca
Well it sounds like you know more than the 'online vending 101' kind of advice that you would get around here, and I doubt that anyone who might happen by with a real understanding of internet retail is going to take the time to write "A Guide to Successful Online Retail" for you.... but good luck.
 

enaberif

Well-known member
Joined
Dec 9, 2006
Messages
11,391
Location
Calgahree, AB
While I work in a small computer store and get prices below that of most places its difficult for even us to be competitive with stores like ncix. When we are selling DDR2 memory at $69 for a gb and ncix is $20 its tough, but what you have to take into account is the "bulk" factore.

While we may only have 5 or 6, ncix will have 20000 and can sell it cheaper and this sort of mindset is what customers don't understand.
 

BALISTX

Well-known member
Joined
Feb 12, 2007
Messages
2,042
Location
Ottawa, ON
The little stores go though a supplier, where as NCIX because they order in such large volumes get it right from the manufacturer. Other places that get it right from the manufacturer would include, BestBuy/Futureshop, TigerDirect, New Egg, Buy.com, Canada Computers, PC Cyber (Here in Ottawa).

Regarding electronics, I've heard from a friend of mine that use to be a store manager at a Futureshop location here in Ottawa, that the markup is quite higher, like around 50%-100%. The employee discount at Futureshop is 10% above cost price and when he bought a 42" Plasma TV that was $1800, it only cost him around $1150.00 after taxes.
 

AERo

Well-known member
Joined
Dec 17, 2007
Messages
148
Regarding electronics, I've heard from a friend of mine that use to be a store manager at a Futureshop location here in Ottawa, that the markup is quite higher, like around 50%-100%. The employee discount at Futureshop is 10% above cost price and when he bought a 42" Plasma TV that was $1800, it only cost him around $1150.00 after taxes.
I'm saying I can decrease that markup SIGNIFICANTLY because I can get 100 or more
42" LCD TV pieces directly from the manufacturer.
And theses TVs have Samsung and LG panels, so I know they are at the least average
to at the most, great quality.

I just wish I can come up with an ingenius plan to sell these...


BTW, anyone think I can sell 19~42" LCD TVs just within the GTA area and be
well off enough?
 

Shadowmeph

Well-known member
Joined
Oct 3, 2007
Messages
4,073
Downside; one can't really provide a in-store warranty since there is
no "store" per say; so the customer will have the warranty from
the manufacturer. And also, the shipping costs.

(It would most likely start off as an @home office)
this alone is a non seller I doubt that anyone would buy something like a 42"" LCD with out a warranty of some kind no matter how much money is taken off I know I wouldn't unless it was a excellent deal.
the only real way that could work is if you were to sell in Mall Parking lots out of your car I used to see guys years ago in Surrey place Mall selling electronics out of the back of there cars and if a person wanted something that was to large to fit in the car they would give them the place where to meet them ( like there home or office) and the customer would drive there to pick up the item. but I am not sure if people are still doing this anymore since I don't live in the Surrey B,C Area
 
Last edited:

Krixxer

Active member
Joined
Dec 12, 2007
Messages
42
Location
mississauga
If you want to start a retail business I would suggest against electronics. There are far more profitable ways of investing your hard earned money.

look at it this way . . .

tiger direct had Q6600's for ~290 2-3 weeks ago
NCIX went down to ~270 I ordered one but before my order was processed tiger went down to ~260. I canceled my order with NCIX and picked one up on my way home the next day.
 

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