Backbreaker, I want to open a store.

[thederekeffect1]

After reading this thread, I was actually inspired to read the classifieds section of my newspaper. This guy was selling a brand new computer for $40. Hard drive, monitor and everything. I'm guessing there must be a problem with it ($40 for a brand new computer is unheard of, obviously). But I'm pretty sure the cost to get it fixed is far less then the profit you could earn for reselling it.

There were also three or four cars being sold at $400 or less. Once again, I'm pretty sure the cost to get it fixed is far less then the profit you could earn for reselling it. Hell, even if the car looks old, you could probably afford a brand new paintjob and still make a profit off of it.

Then there's all the misc. products that are being sold at really low prices just because someone wants to get rid of them. Some guy was selling his entire basketball card collection (over 1,000 cards) for $15 and he noted that there were a few MJ, Kevin Garnett, Larry Bird and Kobe Bryant cards included in the collection. I could get $15 for the Michael Jordan card alone. None the less adding Larry Bird, KG and Kobe into the mix.

... Hmm... Is there a law about buying and reselling pets? Or is that just a moral thing? Heh. Oh, come on... Who wouldn't want to take advantage of all the pets that are being given away for free to a good home?

 

[LowPlainsDrifter]

After reading this thread, I was actually inspired to read the classifieds section of my newspaper. This guy was selling a brand new computer for $40. Hard drive, monitor and everything. I'm guessing there must be a problem with it ($40 for a brand new computer is unheard of, obviously). But I'm pretty sure the cost to get it fixed is far less then the profit you could earn for reselling it.

This computer likely:

1. Isn't brand new (a couple of my clients have been sold crummy used pcs with the claim they are new or nearly new)
2. Is brand new but not working or stripped of all internal parts
3. Is brand new and working, but "fell off a truck."

 

[backbreaker]

i actually have a brand spakin computer I am trying to get rid of for pretty much 100 dollars. I don't need the money, and I built it for a friend, who changed his mind after I built it.. but it's a nice PC, the only thing about it is that I never configured the jumpers and it doesn't have a disk drive and no software, but the processor alone is worth 100 dollars

stuff like that is the kinda stuff you need to look for. All you need to do is add a disk drive and you can flip it and sell it for at least 300

 

[Rovalier]

i actually have a brand spakin computer I am trying to get rid of for pretty much 100 dollars. I don't need the money, and I built it for a friend, who changed his mind after I built it.. but it's a nice PC, the only thing about it is that I never configured the jumpers and it doesn't have a disk drive and no software, but the processor alone is worth 100 dollars

stuff like that is the kinda stuff you need to look for. All you need to do is add a disk drive and you can flip it and sell it for at least 300

Speaking of parts, where do you usually you order you stuff? Do you get it directly from the manufacturer like ASUS or Abit (OEMs) or do you get off a half decent place like newegg.com?

I am thinking of constructing and selling some computers as a side thing to make some cash. Not a full fledge business granted.

 

[backbreaker]

well, when I had my company, it depended.. we pretty much got all of our hardware from ingrmmicro (i think I spelt it right) with the execption of cases and hard drives, which we got both in bulk overseas.

We got the software from a different vendor... all in all we saved a ****load of money, but you have to order in bulk and establish credit and be a real company. We used to get freebies all the time from pc part companies, which was cool. When we put our ad in computer shopper mag, they sent us a copy of every issue they have ever had.. it was a big ad.

Now, i'm like **** it, i Just go to Newegg like everyone else. I actually still have some crap that I had laying around from my pc company days that i never got rid off, that's pretty much what I used to build this pc, and why I am trying to get rid of it.

Word of advice.. if you are going to do it, don't do it online to start out with. Reason being, it's soo freakin cutthroat, because the only thing everyone competes on is price, which means you are going to loose money more than likely selling pc's.

Offline isn't as bad. If you can build laptops, you also have a better chance starting out online, as not everyonek nows where to get laptop parts from and the market isn't as big, and everyone loves laptops

 

[backbreaker]

actually, the BEST way to probably start out, is probably liquidation.com, but you have to buy in bulk, but it's easy to sign up with. Alot of their salvage stuff works, A LOT.. like if someone brought back a pc, because the video card didn't work, the entire PC is salvaged, because they can't used a used processor in a new pc.

 

[SELF-MASTERY]

Breaker, thanks for the liquidation.com link. The car section has my attention!

 

[Centaurion]

I have to admit, backbreaker, I really doubted you in the beginning, but the more I read your business posts the more I realize that you seem to know your sh!t. Please accept my apologies.


When it comes to opening up a store, be extremely careful on how you select and monitor your employes. One of the major expences of running a store (besides wages) is employes stealing sh!t.

When I was running my own female retail outlet, one key employee stole something close to US$60-80k over a couple of years. This was one guy that I trusted completly. I only found out about that when I sold that business to attend college.

btw I plan to start up an internet business pretty soon, nice tips all around.

 

[Rovalier]

well, when I had my company, it depended.. we pretty much got all of our hardware from ingrmmicro (i think I spelt it right) with the execption of cases and hard drives, which we got both in bulk overseas.

We got the software from a different vendor... all in all we saved a ****load of money, but you have to order in bulk and establish credit and be a real company. We used to get freebies all the time from pc part companies, which was cool. When we put our ad in computer shopper mag, they sent us a copy of every issue they have ever had.. it was a big ad.

Now, i'm like **** it, i Just go to Newegg like everyone else. I actually still have some crap that I had laying around from my pc company days that i never got rid off, that's pretty much what I used to build this pc, and why I am trying to get rid of it.

Word of advice.. if you are going to do it, don't do it online to start out with. Reason being, it's soo freakin cutthroat, because the only thing everyone competes on is price, which means you are going to loose money more than likely selling pc's.

Offline isn't as bad. If you can build laptops, you also have a better chance starting out online, as not everyonek nows where to get laptop parts from and the market isn't as big, and everyone loves laptops

I wanted to get my feet wet with desktops locally. As for laptops, do you know where to get laptop parts? If your not comfortable posting it here can you PM me it please thanks

 

[gmillar]

Bump, this is a great thread.

 

[chickenlegs03]

this is indeed a great thread full of excellent advice.

I personally don't have any experience with opening a store or starting a full-fledged business quite yet, though I do have a few business plans with lots of holes in them, lol.

If you have ideas, or would like to learn ways to channel your creativity, I would definitely suggest reading "Innovation and Entrepreneurship," by Peter Drucker. A good friend who is a very successful businessman, and has started several highly profitable businesses recommended it to me. I have found it very very useful.

 

[backbreaker]

lol, man in all honestly, I would probably doubt me as well, but trust me, there aren't too many people out there that know more about the PC business than I do, even though I have been out of it for about a year.

I probably know more about the business part of pc's then the pc's themselves, and I am a true techie.

anyway, one of the smartest things we did when we got our first building, and I admit, this wasn't my idea, in fact I was very against it, but my partner was persistant enough to convince me, is fingerprinted door locks on the inventory room.

One person tried to steal a couple of processors from us.. fired the next day. Not a problem at all after that.

So it costed money in the front end, but on the back end (theft) it saved a ****load.

laptop parts? man, I don't give a damn anymore, I'm not in the business.

For you, the best place is probably again, liquidation.com

Now, laptops are a little different then desktops. You really only have like 4 parts. The base (actual unit with monitor), processor, memory, hard drive.

The last three of thoose you can get super cheap on liquidation.com if you buy in bulk.

Now, the base is going to get you.. and even if you could skimp out on it, you wouldn't want to, because it's the freakin base. I am not one that buys salvaged base units to resale.. for myself maybe but for resale no.

So the base units you are going to have to find a real vendor for, Ingram micro or contact ECS or ASUS (the best in my opinion).. WE used the **** out of the Asus D-1 laptop, I can still tell you the sepcs off the top of my head and it's 2 years old.


However, you can build a laptop way quicker than a desktop and sell it for more

the best way to learn about how to run a business is to ACTUALLY RUN A BUSINESS.

This is the reason I didn't go to college.. I was presented with the opprotunity to go to UofA (Arkansas) a nd go to business school, grad school, come out of 100k or so in loans.. well not that much because I had a scholly.. and then have to learn how to run a "REAL" business anyway and on the way, collect debt, maybe a kid or two, etc.

Or< I could get out while I was young and actually learn how to run a business.

I consider my first two years of my company business school. By 2004, I could tell you more about my industry then people who were twice my age.

It just didn't make sense for me to go to school.

Now, I love to read, and I always was a self taught type of person.. I have tons of books on running compaines, how to do specefic things, like accounting, and how to do taxes, etc, but just "business running for dummies " books, I learned from the school of hard knocks.

I can tell you so much about venture capital and angel investing, not because I went to school for it, but because we tried to secure funding for our company for about half a year.. we could have got it later, but by then we had money of our own, which in the turn, it turned out better for me, becuase if I would have gotten the startup cash, my share of the company wouldn't be where it was, and I would probably still be working at a job I was burned out on a year ago.

 

[backbreaker]

i wanted to clear something up..

Now, once you get bigger and sell "new PC's", you can't be using liquidation.com for salvaged parts for new pc's, then you would have to start finding vendors.

but as long as you are around town, do your thing

 

[Rovalier]

That almost goes without saying.

You have any special way in acquiring capital, particularly money prior to starting up the company? I take it is old fashion save up cash from a job to spend on your company at that time right?

Anyways I really appreciate the scores of info you are providing.

 

[backbreaker]

pretty much saved it up. I can go into detail if you would like

 

[gmillar]

Detail is always good. I think I might condense all the information in this thread into a mini-ebook, and post it up here.

One question. I'm considering a two-year program at BCIT (British Columbia, Canada) after I grad. It would most likely be paid for, I'm not sure how much I'd have to pay, if I'd have to support myself while taking it. Do you think this is a worthwhile thing to do? Or should I jump right into it?

 

[newbie81]

Backbreaker -> You have started your business on eBay, which tools did you use/do you recommend for people starting an eBay business?


I'm talking about tools that facilitate:
-Keeping trace of payements, orders, shippements, waiting for payements,...
-Managing your e-mails
-Keeping records of handled orders (in case clients fills complaint)
-....

The standard eBay selling manager sux imo, same with outlook.


-peace.

 

[Rovalier]

I can go into detail if you would like

Yes if you can, this should be interesting.

 

[chickenlegs03]

I recently (just today) thought of an idea for an online store (after reading an article about a vitamin). Currently, I work as a webdesigner for an online shoe store. We sell tons of different brands of high fashion shoes...mostly expensive brands you've never heard of. I mention this because I do have a feel for how it is like to manage and operate an online store and do marketing for it.

First of all, I can see why a company would want more retailers...it would be less margins on products sold buy retailers, but still more money. Although, I can't necessarily see why customers would purchase from a secondary retailer especially if the price is the same?

My strategy...or pretty much my whole idea, is to market it differently. Most vitamin shops just show the item and the price...don't really spice it up.

Organic and health conscious is a big fad right now, and getting bigger. I would sell the same product for much more, with better marketing, add free shipping, a coupon to an affiliate, and gather more 'niche' customers.

It's like the reason people choose starbucks coffee over other places...the coffee really doesn't taste different and you can get better taste for cheaper...but it's the feel and style of the place...those sorts of things are hot right now. No wonder McDonald's started it's own cafe.

Anyhow, my core emphasis would be on the marketing and look/feel of my product...not actual quality, which would be equivalent to that of competitors. Many times marketing is more important than product. Look at Geico...you can sometimes save more using Statefarm or Allstate...but Geico people call more simply because of incredible advertising...not necessarily a better insurance company.

Now to my questions:

(the one in bold, above)

2. Inventory: is it more effective to not have inventory at all? For example, Amazon.com does this with certain products. I bought a bluetooth headset through them, but I received it from some other site. Amazon charged me, but just ordered me one from some other supplier. Middle man sort of. I could do this with my vitamin shop idea. However, what if I start to sell more than the supplier? Will my higher sales clog their business? Would they even allow it, and should I rely on them? Trying to answer those questions myself I realize inventory can have its benefits.

I know you pay tax for inventory. But, before starting an "online store" are there formal files/paperwork? In other words, how would they know I even have inventory if I'm not a formal business? I know I should get a merchant account with paypal for example, but should I seriously also file for a corporation or consider it?

3. Lastly, say I find a distributor and buy from them and sell. How can I be sure that my customers will keep ordering from me, and not go directly to my distributor or to the primary company the second time around?

This is assuming I make money of a margin from pricing my item higher. If we both have the same price, then I would probably make money by being paid a portion from the gross margin made by the primary supplier. I guess there are rules on pricing and it probably depends on the suppliers.

For example...why should I buy my Nike sneaker from Footlocker and not directly from Nike.com? I'm talking aside from promotions and offers...just cut and dry, how could I keep customers coming back?

I guess these questions, in part are for myself, but I'm just wondering in general if you know how other retailers succeed with this online?

thanks

 

[Rovalier]

bump