Do you think it is a success?

[burakbey]

I am 24 year old entrepreneur in Istanbul / Turkey and I have started my own business on second half of 2010 with a 1000 USD which my dad gave to register a ltd company.

My business is about exporting (not selling to local market) dried fruits (mostly organic certified), nuts and juice concentrates from Turkey.

I do not have any warehouses or packaging facility or something. I just purchase bulk dried fruits and export them under my company labeled boxes. I use my dad's office, mostly working at coffee shops or anywhere I can use my laptop.

Also, I do not have any employees so I am the CEO, sales person, purchaser, assistant and all.

What I do is similar to business / commodity brokers, but the only (and big) difference is I do not work on a commission. My suppliers do not know my clients as my clients do not know my suppliers. My clients pay advance before shipment and I pay to suppliers while ordering.

Besides that, I did not get any loan / credit until now. Maybe it could be helpful to scale but I just could not take risk incase of a failure.

My company currently export Turkish organic dried fruits to 12 countries (mainly US and Western Europe) and I am just about hit 300K USD annual turnover this year with approximately %20 gross profit.

I just want to hear honest comments to see where I stand, what should I do to grow etc. Because I don't have any people around me to get advise etc. as many of my friends are still student or unemployed and family just can't be objective.

And working without any partner or employee can be physically and mentally overwhelming as there are no person to help, support, share good and bad times around me.

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[theag]

To me this sounds like a big success in the making, with a great start, so congrats on coming so far!

Your profit margin seems quite low, can you increase your prices or do anything else to improve them? Or are this margins normal in your industry (I'm not familiar with the industry)?

What about adding other products that the same customers want to import from turkey?

How did you get your existing customers? What kinds of marketing do you do? Can you handle more customers while still working alone?

Maybe a good way from here on is to create a brand around your products (not just label the packaging) and get local distribution partners in the US and different countries in Europe to take it to the next level?

 

[burakbey]

Thanks theag, for your comments and good words

Profit margin is normal and even lower generally. Market normals are; low profit margin and huge turnovers (i.e big players make over ten million usd turnover with a %5-7 profit margin) but I am doing my best to avoid it by eliminating some products from my range.

Adding some other products are a good idea but not easy on this industry. Because you know, we have some dried fruits like raisins, figs, apricots, hazelnuts etc. and if you want to increase your range on dried fruits, it should from farmers level

But other food industry related products (such as fruit bars, finished products) are always on my mind, but not sure if I can find a strength to make all together, if it is early for me to add more products to range before proving myself on the market with main products.

Main marketing activities are online. Little bit of Google Adwords but mostly getting leads from company website or B2B sites such as Alibaba or LinkedIn. Trying to keep website updated frequently and writing a short blog (did I tell you that I am also a webmaster and marketing manager of company? )

Also exhibited at one of the biggest trade shows in Paris last month. It was a first time thing which cost me around $10K but I think it will worth it (will be sure after 1 year by calculating conversion rate)

My current clients are wholesalers, factories who us my products as ingredients or retail companies who repack dried fruits under their brand and selling to chain markets or retail shops.

Of course I am very small comparing to other companies on the Turkish market right now, while many of their clients purchasing container load quantities, I ship 1-2 pallets mostly.

And this is all about prices, as what I sell is parity products. I mean, my dried apricots and other companies dried apricots do not have any uniqueness (assuming quality standards are same). So it is like a commodity market.

This is why labeled retail products, having my own brand is my current goal and dream on a mid term to differentiate my company. Problem is, it needs more capital and needs changing my marketing activities.

So as you said, it would be really necessary to find distributors who will agree to sell my own branded products.

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[theag]

Thanks for providing more details! To me it sounds like you are on the right track. There are a few members here that also have a physicial products business, I'm sure they'll chime in here and give you some more responses and probably better advice than I could!

 

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[Pete799p]

Congrats on your success I would consider this a huge win. You are making some solid cash and you have a very scalable business. Just keep up the momentum. Keep trying to land new accounts and possibly expand to different countries. As long as your current products are selling well and @ 20% which I believe is rather high for food then your focus should be on continueing to sell. As you volume increase you can start thinking about how to integrate either backwards or fowards depending on your strengths and the potential advantages.

 

[burakbey]

Thanks for providing more details! To me it sounds like you are on the right track. There are a few members here that also have a physicial products business, I'm sure they'll chime in here and give you some more responses and probably better advice than I could!

Thank you, hope more will come

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[burakbey]

Congrats on your success I would consider this a huge win. You are making some solid cash and you have a very scalable business. Just keep up the momentum. Keep trying to land new accounts and possibly expand to different countries. As long as your current products are selling well and @ 20% which I believe is rather high for food then your focus should be on continueing to sell. As you volume increase you can start thinking about how to integrate either backwards or fowards depending on your strengths and the potential advantages.

Thank you, seeing professional comments here is really motivating for me and also show I am on the right track.

I am trying to get new customers and trying to focus on getting many small importers who are ready to pay higher amounts (but cheaper than their local wholesalers/importers) rather than big purchasers who seek for deep prices which gives big risk, low margins but high total profit.

It seems like the only way right now to keep profit margin on this level.


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[andyredsox]

You have done a great job so far.

Sounds like a scalable business, so you might want to use that to your advantage.

Can you try to increase your volume -not necessarily the price, to increase profit margin a bit? and consider asking for good deals from your suppliers as you increase the volume?

 

[1PercentStreet]

20% margin is fantastic on a business like this. Congrats!! Keep up the great work, look to expand to more countries and brand yourself as much as possible.

 

[burakbey]

You have done a great job so far.

Sounds like a scalable business, so you might want to use that to your advantage.

Can you try to increase your volume -not necessarily the price, to increase profit margin a bit? and consider asking for good deals from your suppliers as you increase the volume?

Thank you!

Yes, I am trying to scale it but also have a fear inside. I should make stocks to increase quantity (turnover) and it is very related on financials you have and purchase you make from farmers / processors at the beginning of the fruits crop.

There is a need of $500K investment approximately to triple up sales but I did not use bank loan and it scares me a bit

So I stock few products and trade other ones. When you trade, profit margin gets very low as prices on the market increase (supply is limited and demand is mostly stable).

I am aware that it's hard to achieve things without taking risk but anyway, this is a big money for me

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[burakbey]

20% margin is fantastic on a business like this. Congrats!! Keep up the great work, look to expand to more countries and brand yourself as much as possible.

Thank you 1PercentStreet good to hear your kind words

Will exhibit at more trade shows I guess to diversify countries my company currently export.


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[Nemolein]

bump