Good luck, man! Ebay and CL are your friend here.
Vigilante's thread http://www.thefastlaneforum.com/fast...-deposits.html has been resonating with me for a few months. I've been poking around on Alibaba and DHGate for a while getting a sense of what can be found there to resell here. The answer is: a lot.
Today I pulled the trigger on my first purchase. It's a very small order to test the product and compare it to offerings on Amazon.
I started by looking thru the Bargain Buys section on Alibaba. That section is divided into 13 categories. I culled the listings according to "Might I buy that" and "Is there a big margin". One product really stood out to me, so I researched it on Amazon. Turns out that product gets dismal reviews, but I found a completely different product that achieves the same results, and got stellar reviews. I fed that back in to Alibaba and found tons of suppliers that sell it.
I spent some time researching different suppliers. Many offer data showing where the bulk of their orders go. One supplier indicated that Eastern Europe, Asia, and East Asia get 90% of that product, while the US gets only 10%. This tells me there's big demand for it worldwide, but it hasn't hit big here yet.
I wasn't comfortable plunking down big money for a large minimum order, but I wanted more than a single sample. There's a subset of Alibaba called AliExpress featuring manufacturers willing to offer smaller minimums for higher prices. I found a company there with great reviews that will ship a minimum order of 1 lot and free shipping.
This gets me 20 pieces. On Amazon they sell from $6 to $17 depending which exact product and seller you select. The margins are there.
If the product I get is a cheap imitation that doesn't live up to the hype I'm not out any real money or time. If it does live up to it, I then figure out how to position myself on Amazon. I have no branding in place and I'm not sure what type of packaging these will arrive in. I may have to come up with cheap packaging (ha ha). If sales are good, then I'll really start shopping out this order to get a better deal on the front end.
I'm really excited to see where this heads.
Good luck, man! Ebay and CL are your friend here.
Thanks for the advice! eBay actually has even fewer on offer - I suspect I won't have any trouble selling these.
This is one of those things I could see dozens of street fair vendors selling 2 for $25.
If you need a barcode (to create a new listing on Amazon you need your own UPC code) you can buy them here.
UPC-Cheap-Barcode - Inexpensive UPC UUC Barcodes and Free Graphics for Amazon eBay etc UCC
If you start just on eBay to test it out, you won't need a barcode yet.
Can't wait to follow your story.
Thanks Vigilante. I recall this gem from your other thread, and if I need to put some effort into packaging then I will certainly use it. So many ways to skin a cat!
My 20 year old daughter is on her first parallel experience. She's now an importer, having received her first shipment last week. I am somewhat helping her along (had professional photography done of her samples, etc...) but she spent the last 2 summers working for us and learning the ropes. She will be walking many of the same miles you are over the next few months!
What you are working on wasn't even possible 6-7 years ago, and the technology you can deploy to market your products to a national (or international) audience mean you have more scale possibilities today than at any time in history. From a business development standpoint, you can now do in a week what it literally might have taken years to accomplish previously, if it was even possible.
Let me know if there is anything that I can do to help point you in the right direction down the road. I am all about action takers like you.
KEEP ONLINE SALES exclusive to you. For example, do not sell anyone else who wants to put your product on eBay. Don't create your own competition. You control the online market. But... I love your idea for physical distribution, and if you can sell in bulk (heck, even if it's 20 pieces at a time that you make $5 per unit on) to people that are restricted from selling online, you will be well on the way to a Fastlane business model.
My wife loves going to street fairs. We hit at least three a year. A year or two ago I remember seeing every fifth vendor selling lightweight mesh lumbar support frames for about $25. Everyone was selling them. This year, not so much. I guess they ran their course.
What I'm on to should be perfect for street fair sales. It's small enough to easily carry in a bag or a purse, it's very easy to demonstrate, and upon demonstration the buyer immediately sees the benefit.
Vigilante, if you could PM me some contact information I'd like to discuss this with you offline.
Following up on the street vendor route, I've been Googling around but haven't found much information about street fair vendors. Lots of information for someone wanting to start a hot dog stand, but not a lot telling me where to advertise my stuff to the product merchants.
I will certainly bring some product to the next street fair and talk to vendors there who look well positioned to sell it. I'm guessing they'd be reluctant to tell me where they buy their product for resale, but would probably be open to me telling them how they can make more money selling my product too.
Aside from that approach, I need some brainstorming to figure out how to get in front of these vendors on a bigger scale. Any ideas?
Is there a way to view more bargain buys besides what is displayed on the homepage?? So you found this product simply through browsing the listings and seeing if any were of American value rather than finding a need first then filling it?
Nevermind, found the bargain bars section simply by clicking an item on the homepage.
There are many ways to identify a need. In this case I browsed the offerings looking for something that I would need. It's not hard to do. I found one where I said "Hmm - I'd buy that if it worked well". That's where Amazon's review system really works for you. You get instant feedback on a product that's already out there. I found the product was junk, but took a look at what people viewing that product also viewed. That's where I discovered a product that gets great reviews but not a lot of people selling it.
Vigilantes advice of sitting at the computer with a beer exploring this stuff is spot on. It's a barrier to entry only because people think its hard and don't try. Give it a try.
It sounds very interesting and I wish you the best of luck. I can't wait for some updates! Speed++
"Fortune favors the brave." - Virgil
I also checked their bargain items, there are some items which sell on amazon for almost triple the price. Most of them good reviews. Will need to email suppliers and see if they can send me samples before order hundreds!
Expect in most cases to pay WAY more for the samples than you will pay when you buy in bulk. It's the way the factories filter out the fake importers from the real ones. Some times, you can get the factory to agree to ship free samples if you pay for freight. Some times, you can get the factory to deduct the cost of samples from your first shipment. And some times, if you really want the samples, you just have to suck it up and pay exorbitant prices. Know that the samples are NOT a good deal in most cases, but worthwhile to see what you are getting before you commit to a bigger shipment.
When starting out, you also can almost always to get the factory to send you a small quantity (like 100-200 units of something) if you call it a "test" order. A factory may have a minimum purchase requirement of 1k units or more, but you can usually negotiate around this simply by indicating you want to test the item first to see how it will do in the United States.
If a company insists on a HUGE order, they are probably NOT the factory. They're probably a middle man, masquerading as a factory. It's only worth their while in huge increments, because they are adding a markup to what they buy the products for. It's a good filter of players vs. posers on their side. Think about it... if they are the factory, and they happen to have a few hundred units sitting around, they would be glad to send you a test order. If they are a middle man, they have zero units sitting around. They typically have LONG LEAD TIMES, require ridiculous terms like payment 30 days in advance of shipment, and huge minimums.
You will get a feel for this over time. I would estimate that at least HALF the companies on Alibaba or DH Gate are not manufacturers. The closer you get to the source, obviously the more credible and predictable and cheap they will be.
Good luck. Keep going.
So next step. Always have something in development. We have 1 new item arriving this week, and another next week. One of the products is good enough that we will create a free standing web site for it, in addition to adding it to our existing distribution channels and web site(s).
We have a third new item in production with an ETA of three weeks, and a fourth item finishing development with one of our manufacturers.
Why? Because now that we have a system, we can plug more and more items into the system. We know that not every item is going to be a home run. Probably HALF the stuff we try doesn't generate a strong enough customer response for us to reorder it. That's why when ever possible, we start small. We know that not everything will sell like we want it to.
We also know that we're nowhere near maximizing our potential. Nobody can stop us. Nobody can tell us we hit a ceiling. There's always more factories, more products, and more deals. There's always unfulfilled demand for something... somewhere... in the United States. New items, new ideas, new categories, new suppliers, new customers.
If we have failed in anything, it's the slow speed by which we are expanding. It's been deliberate in attempt to mitigate losses, which is extremely important when we are using cash to multiply itself by rapid turnover of products. But, from a process standpoint, our expansion has been too slow. We should have more new products testing at all times than we do. As you guys are finding out, it doesn't cost that much to get into the game and let the customers vote with their checkbooks.
Ideally, we will turn the inventory 12 times per year. However... we're turning slower than that... turning about 6 times per year. Still good, but room for improvement. I want smaller shipments, hitting more frequently. Product sitting in a warehouse doesn't do us much good. Once you understand your rate of sale, then the game becomes to manage the turnover to stay in stock, but not overstocked. I would define overstocked for our purposes as more than a 60 day supply on hand of any individual item. I want to flow it in, flow it through, get it into a customers hands, turn it back into cash, and turn the cash back into inventory again.
From a seasonality standpoint...
November is 2x an average month's sales....
and December is 2x November.
That's just the normal seasonality curve for consumer goods in any industry, at any retailer.
Somewhere in the neighborhood of 1/3 of our total shipments to end users will happen between Thanksgiving and Christmas. So, we need to be aware of that, prepared for that, and ready to fill that demand.
In simple math, if we sell 100 of an item in October, we expect to sell 200 of that same item in November, and 400 of that item in December. Retailers literally spend January - October preparing for November/December.
BLACK FRIDAY. The day after Thanksgiving. They day the retailers wait all year for. They day the craziness starts, and the day that the retailers shift from operating in the RED to operating in the BLACK.
Let us know how this venture goes!!
Thanks south for the thoughtful and thorough responses.
Once I confirm the product is the real deal and worth pursuing I'll dig deeper into finding the actual manufacturer. I hope to establish a mutually beneficial relationship with them.
It's funny how the price I pay for the first order is almost immaterial. It will become much more important as I ramp up the volume. I'll be negotiating down to the final penny I suspect.
I wonder if my product will experience a surge in holiday sales. Being a summertime item, I wouldn't expect it. Is there a way for me to track historical sales figures on amazon?
I've got several ideas to improve the product. I think there's opportunity to make these appealing to kids with the right decoration. It could go crazy if I can get endorsement from professional baseball to allow team colors and logos. Just a few ideas that have me awake at night!
I'm putting some thought into how to brand this and what ancillary products I can add to the brand.
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