I've got to fire my brother.

[Paul David]

So it's been more than 3 months since I wrote this post and it's time to update on the current situation.

Firstly my brother is still working for me but being paid by my Father. He's back doing the packing which he previously wasn't happy doing but has actually got his head down and got on with the job.

I've also got some excel macros developed by someone in Eastern Europe which cost me less than $200 but these spreadsheets have saved me that much time I would no longer require the employee I let go in September anyway.

One of the macros developed was in relation to monitoring our dead and slow moving stock items and now on a monthly basis I take action on this.

I've sent around 600 FBA listings to Amazon UK and these have now started to sell.

I was dreading my yearly visit to the accountants in December as I knew they would highlight the poor trading year I'd had and this proved to be the case. I was told (and I already knew) I could not afford another year like before and I needed to increase profits asap.

For the first time ever I'm in a position where I can actually concentrate all of my time on taking action in things which directly drive profit to the bottom line but herein lies the next obstacle I need to get over.

Cashflow.

I'm still experiencing issues of better selling products running out of stock because I don't have enough cash to replenish them quick enough. Our suppliers in Far East won't offer credit and due to the poor financials on our last yearly accounts no bank is going to lend me anymore money.

I also need to send our product lines to other Amazon sites in Europe and USA but I can't afford to buy the stock.

I'm no longer losing money anymore but I'm not really making it either if I factored my brothers salary into it. Its just covering outgoings. It's an improvement on 3 months ago and progress has been made but I'm now at another crossroads.

I can't afford to discontinue current selling lines to find more lucrative items. I don't have the cash to ensure current lines don't sell out (even though i can produce a report in two minutes telling me exactly how many I need to order) because I don't have enough cash and I don't have enough cash to buy the new products for other channels which will bring in more profits.

The only solution I can think of is to ask my Father to mortgage one of his properties and either invest into my business as a form of partner of salary or provide it in the form of a loan where I pay back the mortgage cost.

It's actually the last thing I wanted to do as I hate asking for help from anyone and I feel bad enough that he's already paying my brothers wages.

From a £150k investment I'd estimate to make approximately £35k a month. Easily enough to cover the cost of a mortgage and make a good profit.

If I don't get a cash injection I'm simply going to drift along probably increasing profits here and there but not by enough to be anywhere happy with. I'll have A basic lifestyle business which is one Amazon suspension away or delayed stock arrival away from going under.


Sent from my iPhone using Tapatalk

 

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[biophase]

How long are you selling out for? What's the time gap between you selling out and getting that product back in?

 

[Paul David]

How long are you selling out for? What's the time gap between you selling out and getting that product back in?

It varies depending on SKU and supplier but can be anywhere from 1 week to 6 weeks. Then when it comes back into stock it takes another 7-10 days for sales to start kicking back in.

We're currently running at around 14% of total value of stock with no sales in last 60 days which i'm reducing price on to discontinue. I have some excellent spreadsheets now which provide a complete oversight of Stock within minutes. I know exactly how many days since i last sold a particular SKU, it's value.

 

[biophase]

It varies depending on SKU and supplier but can be anywhere from 1 week to 6 weeks. Then when it comes back into stock it takes another 7-10 days for sales to start kicking back in.

We're currently running at around 14% of total value of stock with no sales in last 60 days which i'm reducing price on to discontinue. I have some excellent spreadsheets now which provide a complete oversight of Stock within minutes. I know exactly how many days since i last sold a particular SKU, it's value.

I would start working on the ones with 1 week of out of stock. Bridge the gap on those to keep sales coming. Use the new revenue generated from those sales in the 2 new weeks of being in stock to slowly purchase inventory for the next least timeframe of out of stock items.

Slowly chip away at it.

I would not ask your dad to get a mortgage. Sounds like you may just need a small loan to get the ball rolling.

 

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[OldFaithful]

If your business is bleeding cash, then something is seriously wrong. At least you do recognize that you're running out of capital, and that something has to change. That's a start.

I think you've still got too many expenses for your current revenue. Regardless of how much you care about your employees, I don't think you can afford all of them yet...

I'd prefer not to take on any partner, especially a family member. That can cause such strain on a relationship, I'd rather not damage such important relationships. Along the same vein, I prefer not to get a loan either. It will just allow you to gloss over the existing problems. Focus on the business fundamentals. Increase sales, decrease overhead. Become profitable again.

 

[Paul David]

I would start working on the ones with 1 week of out of stock. Bridge the gap on those to keep sales coming. Use the new revenue generated from those sales in the 2 new weeks of being in stock to slowly purchase inventory for the next least timeframe of out of stock items.

Slowly chip away at it.

I would not ask your dad to get a mortgage. Sounds like you may just need a small loan to get the ball rolling.

Thanks for your advice. I understand where you are coming from and i can chip away at it but it's going to take a lot of time - months if not a year whereby i'm not running out of stock. 30% of the business comes from Amazon UK, if during any time in the next 6-9 months I get a suspension (and i've been suspended before for reason completely out of my control) whilst i'm in this position i'm more than likely out of business.

At the moment I generate around £8000 a month profit (before building and staff expenses) and that's from holding around £40,000 worth of stock. If i had £150k worth of stock, stored at Amazon FBA across Europe and USA i would not need any extra staff, wouldn't need any more overheads and wouldn't need to take any more salary from business. I would be paying approximately £1000 a month mortgage repayment, and some more bank charges for international payments plus Amazon fees on additional sales but the rest will be all profit on the extra sales. I'd certainly make more than £1000 a month.

I wouldn't need to touch the extra profit and i could keep ploughing that back into the business for a couple of years whereby the bottom line improves and the business becomes self sufficient by generating it's own capital.
To get to that stage from the current position is going to be difficult.

 

[Jon L]

Thanks for your advice. I understand where you are coming from and i can chip away at it but it's going to take a lot of time - months if not a year whereby i'm not running out of stock. 30% of the business comes from Amazon UK, if during any time in the next 6-9 months I get a suspension (and i've been suspended before for reason completely out of my control) whilst i'm in this position i'm more than likely out of business.

At the moment I generate around £8000 a month profit (before building and staff expenses) and that's from holding around £40,000 worth of stock. If i had £150k worth of stock, stored at Amazon FBA across Europe and USA i would not need any extra staff, wouldn't need any more overheads and wouldn't need to take any more salary from business. I would be paying approximately £1000 a month mortgage repayment, and some more bank charges for international payments plus Amazon fees on additional sales but the rest will be all profit on the extra sales. I'd certainly make more than £1000 a month.

I wouldn't need to touch the extra profit and i could keep ploughing that back into the business for a couple of years whereby the bottom line improves and the business becomes self sufficient by generating it's own capital.
To get to that stage from the current position is going to be difficult.

This means that its time to get creative. Asking for help from outside sources is a good way to kill your creativity. I'm in a completely different industry, so i can't offer you any advice except to say that I was where you're at just a few months ago. Back up against the wall, I got creative and discovered two new revenue streams that I'd turned my nose up at before. Both are proving to be pretty lucrative.

You've listed a bunch of ways that you can be killed off. How about listing a bunch of ways you can turn this around? You're not likely to find that one killer idea that will save you, but 5% changes here and there can add up to a lot of money over time.

Here's a list to get you started:

1) Whatever Biophase said above. (I didn't understand it, but go start on that)
2) Raise money - you have $40k in inventory. Is all of that inventory producing for you? If not, liquidate the crap and focus on stuff that makes you money
3) What other $200 automation projects can you come up with that will replace another employee? Or - can save time so that same employee can be doing more valuable work? (These kinds of automation projects are what I do for a living. I charge much more than $200, but if you want to bounce ideas off me, shoot me a PM. I will brainstorm ideas with you for free)
4) Other side income you can create that will supplement things?

you said it might take you a year to turn things around. That's not a long time. You'll have a much stronger business at the end of that.

 

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[Paul David]

This means that its time to get creative. Asking for help from outside sources is a good way to kill your creativity. I'm in a completely different industry, so i can't offer you any advice except to say that I was where you're at just a few months ago. Back up against the wall, I got creative and discovered two new revenue streams that I'd turned my nose up at before. Both are proving to be pretty lucrative.

You've listed a bunch of ways that you can be killed off. How about listing a bunch of ways you can turn this around? You're not likely to find that one killer idea that will save you, but 5% changes here and there can add up to a lot of money over time.

Here's a list to get you started:

1) Whatever Biophase said above. (I didn't understand it, but go start on that)
2) Raise money - you have $40k in inventory. Is all of that inventory producing for you? If not, liquidate the crap and focus on stuff that makes you money
3) What other $200 automation projects can you come up with that will replace another employee? Or - can save time so that same employee can be doing more valuable work? (These kinds of automation projects are what I do for a living. I charge much more than $200, but if you want to bounce ideas off me, shoot me a PM. I will brainstorm ideas with you for free)
4) Other side income you can create that will supplement things?

you said it might take you a year to turn things around. That's not a long time. You'll have a much stronger business at the end of that.

Thanks for taking the time to reply. I've got lots of ideas or should i say products i know will be profitable to sell but as the vicious circle continues i need cash to buy them.

I am going to implement one thing this week, and thats to add a second Ebay store selling the same products at higher value. A lot of other sellers i know do this and it's a good way to generate extra income quickly. Plus i have a database of products which i can run one of my macros on and generate 30,000 listings in a matter of minutes.

Regarding your numbered points above:
1. Yes i'm already working on that - just a slow process unfortunately.
2. As above i'm working on this also - actively reducing non selling lines each month.
3. I've pretty much used up all the automation projects now, the other work that's left involves physically packing parcels, answering the phone and dealing with customer service enquiries. A macro spreadsheet won't speed any of this up. I am however looking at getting our products pre-barcoded on arrival which will save time when booking the stock in.
4. Like most physical product businesses it's cash intensive, i can't think of anything else other than diversify my product range across other platforms or source other new products which as explained is what i need the extra cash for. A lot of the creative things i've developed are spreadsheet/database solutions which enable me to segregate data quickly. For example i recently decoded a sellers 7000 listings on Ebay of TV remote Control's so i now know which TV requires what model of TV control. I've found the suppliers in China, and can buy and sell at a profit, if i had the cash to buy them.

I'll certainly take on board your points however and try and think of other ways to increase cash.

 

[stealth09]

All family business should be written in contract. All, no matter how small or large. That way you both agree to a set of rules and can go back to the original deal you agreed to if something arises. I know this isn't your issue right now, I thought I would just say it. Family is family, but business is business.

In your case deciding to fire your brother, you should sit him down, and explain to him the economics of the situation you are in. Explain to him how you are losing money and also losing productivity. Have him stand in your shoes and ask him what he thinks you should do? I wouldn't go in blind and fire him without having him see it from your perspective. It might work out in your benefit. Maybe he works for a very reduced wage...

Edit: Just seen your update. Good to hear that you can still keep your brother on. But like my first comment, have everything in writing.

 

[Paul David]

If your business is bleeding cash, then something is seriously wrong. At least you do recognize that you're running out of capital, and that something has to change. That's a start.

I think you've still got too many expenses for your current revenue. Regardless of how much you care about your employees, I don't think you can afford all of them yet...

I'd prefer not to take on any partner, especially a family member. That can cause such strain on a relationship, I'd rather not damage such important relationships. Along the same vein, I prefer not to get a loan either. It will just allow you to gloss over the existing problems. Focus on the business fundamentals. Increase sales, decrease overhead. Become profitable again.

It's not bleeding cash, it was but i've reduced overheads to the maximum and now it's just ticking along. Breaking even at best more than likely after tax. That's not a business however. It's a job with more hours and stress.

"Increase sales, decrease overhead. Become profitable again" That's the plan, but in a physical ecommerce business it generally requires cash to do.

 

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[Jon L]

I'm venturing into an area I know little about (though I did have an 800 order/month ebay business about 10 years ago), but just to continue brainstorming with you:


Thanks for taking the time to reply. I've got lots of ideas or should i say products i know will be profitable to sell but as the vicious circle continues i need cash to buy them.

Jon's comment: sure thing

I am going to implement one thing this week, and thats to add a second Ebay store selling the same products at higher value. A lot of other sellers i know do this and it's a good way to generate extra income quickly. Plus i have a database of products which i can run one of my macros on and generate 30,000 listings in a matter of minutes.

Jon's comment: sounds like a great idea

Regarding your numbered points above:
1. Yes i'm already working on that - just a slow process unfortunately.
2. As above i'm working on this also - actively reducing non selling lines each month.

Jon's comment: awesome. One idea: Liquidation.com I got nearly 10K out of my 'useless' inventory when I closed out my ebay business. This was after selling out of my money-making items. Its a way to get fast cash. Part of that inventory included a bunch of dog-hair infested area rugs. was about 40-60 pallets worth.

3. I've pretty much used up all the automation projects now, the other work that's left involves physically packing parcels, answering the phone and dealing with customer service enquiries. A macro spreadsheet won't speed any of this up. I am however looking at getting our products pre-barcoded on arrival which will save time when booking the stock in.

Jon's comment: how about physical things you can do to speed up packing? or??

4. Like most physical product businesses it's cash intensive, i can't think of anything else other than diversify my product range across other platforms or source other new products which as explained is what i need the extra cash for. A lot of the creative things i've developed are spreadsheet/database solutions which enable me to segregate data quickly. For example i recently decoded a sellers 7000 listings on Ebay of TV remote Control's so i now know which TV requires what model of TV control. I've found the suppliers in China, and can buy and sell at a profit, if i had the cash to buy them.

Jon's comment: this is the kind of thing that you can take to an investor: do a trial run and prove that you can make money, then structure an investment around a very specific list of inventory, selling channels, volume predictions based on your actual numbers, etc. Pay them back as you make sales and add X% of profit of just those items they financed. (or something along those lines). They wouldn't be investing in your company, but in the specific deal you put together covering just those items.

I'll certainly take on board your points however and try and think of other ways to increase cash.

 

[Paul David]

So i thought i'd provide an update as to where i am at the moment.

We've just come through the difficult Chinese New Year period. I knew i didn't have enough money to order enough stock to see us through the Chinese New Year when all factories shut down for basically 3-4 weeks. I did however manage to organise a short term overdraft extension from the bank and a short term loan from an online loan company. This enabled us to buy enough stock so we didn't run out. It would only work on the basis however that one of the suppliers would need to send out the goods and we'd only be able to pay them 7 days later.

I was also concerned that the suppliers wouldn't be able to finish our order before beginning their holiday and that would be put me in a difficult position not only because of the stock issue but because i'd borrowed money or extended the overdraft on a short term proviso so i need the goods to come in so i could put the money back.

I got confirmation from suppliers that all goods had been sent. Relief all around. Unfortunately disaster then struck. The final 6 boxes of our order (1500 pcs total) was stopped by UK customs over a safety concern. They conduced a random test and the plugs had failed. This is the 2nd time it's happened. I'd spoken at length to the supplier to resolve the issue beforehand so i can only assume they rushed out the order to make sure it arrived on time or completely ignored my instructions. Luckily or by a twist of fate i'd not paid the final $7000 owed on that order and value of goods seized was $4500. It could have been a lot worse.

So we have ended up running out of stock and it's left me a massive problem. 90% of our stock is sourced from this one supplier. I can't risk placing a new order with them in case the items fail the safety test again. So for the past 14 days i've been spending all my time looking for a new supplier/s. I've been staying up late and getting up at 5am so that i discuss the details with possible suppliers on Skype before they finish for the day in China.

I've managed to narrow it down to 3 suppliers now who can offer what we require. Some suppliers wouldn't accept a minimum order QTY of 1000pcs per sku which too much for some of our models. It's taken a lot of going back and forth with questions.

On a personal side my Wife finishes her high paid job in May and is still yet to find another one. My alarm has just gone off at 5am so i spent 10 mins whilst in bed answering a couple of skype messages from China. My wife woke up and said to me "that my business is taking over every aspect of our life". When i'm downstairs on the sofa i've got my laptop on and when i'm in bed i'm working on my phone at 5am. I was astounded. I told her in 3 months time we're going to be minimum 50% down on our monthly income unless she can find a job and i've been trying to sort out a massive issue with my business.

Absolutely great this entrepreneurship ship lark isn't it! We could be up shit creek in a few months and i'm getting told i'm working too much. My wife will probably say it's because there are no boundaries with work and life balance and maybe i should stay in my home office and work from there but she'd probably moan that i'm always in there and at least with the current way i get to see my children playing etc whilst still being able to work.

On a positive note i increased sales by 45% in January compared to December although i expect a dip in February due to the stock issue.

 

[Alex H]

So i thought i'd provide an update as to where i am the at moment.

We've just come through the difficult Chinese New Year period. I knew i didn't have enough money to order enough stock to see us through the Chinese New Year when all factories shut down for basically 3-4 weeks. I did however manage to organise a short term overdraft extension from the bank and a short term loan from an online loan company. This enabled us to buy enough stock so we didn't run out. It would only work on the basis however that one of the suppliers would need to send out the goods and we'd only be able to pay them 7 days later.

I was also concerned that the suppliers wouldn't be able to finish our order before beginning their holiday and that would be put me in a difficult position not only because of the stock issue but because i'd borrowed money or extended the overdraft on a short term proviso so i need the goods to come in so i could put the money back.

I got confirmation from suppliers that all goods had been sent. Relief all around. Unfortunately disaster then struck. The final 6 boxes of our order (1500 pcs total) was stopped by UK customs over a safety concern. They conduced a random test and the plugs had failed. This is the 2nd time it's happened. I'd spoken at length to the supplier to resolve the issue beforehand so i can only assume they rushed out the order to make sure it arrived on time or completely ignored my instructions. Luckily or by a twist of fate i'd not paid the final $7000 owed on that order and value of goods seized was $4500. It could have been a lot worse.

So we have ended up running out of stock and it's left me a massive problem. 90% of our stock is sourced from this one supplier. I can't risk placing a new order with them in case the items fail the safety test again. So for the past 14 days i've been spending all my time looking for a new supplier/s. I've been staying up late and getting up at 5am so that i discuss the details with possible suppliers on Skype before they finish for the day in China.

I've managed to narrow it down to 3 suppliers now who can offer what we require. Some suppliers wouldn't accept a minimum order QTY of 1000pcs per sku which too much for some of our models. It's taken a lot of going back and forth with questions.

On a personal side my Wife finishes her high paid job in May and is still yet to find another one. My alarm has just gone off at 5am so i spent 10 mins whilst in bed answering a couple of skype messages from China. My wife woke up and said to me "that my business is taking over every aspect of our life". When i'm downstairs on the sofa i've got my laptop on and when i'm in bed i'm working on my phone at 5am. I was astounded. I told her in 3 months time we're going to be minimum 50% down on our monthly income unless she can find a job and i've been trying to sort out a massive issue with my business.

Absolutely great this entrepreneurship ship lark isn't it! We could be up shit creek in a few months and i'm getting told i'm working too much. My wife will probably say it's because there are no boundaries with work and life balance and maybe i should stay in my home office and work from there but she'd probably moan that i'm always in there and at least with the current way i get to see my children playing etc whilst still being able to work.

On a positive note i increased sales by 45% in January compared to December although i expect a dip in February due to the stock issue.

Work life balance is very hard to manage. But you are doing the most important thing...keep communicating and let your family know why you are working so hard. Hopefully your family will be very supportive of you and your urge to provide for them.

For your business, sometimes you need to focus on your strengths and let others focus on your weakness. What I mean by this is, if you had a good partner in China (procurement, sourcing agent) who charges you a fee that is acceptable, all that time spent on dealing with factory/production/shipping/testing/qc you could be spending that time on selling/enhancing your sales channel, etc.. (this is all assuming your profit margins are not very tight).

I had a friend who liked to micromanage his business (sourcing out of china) and for many years they used this approach. They finally decided to find a good partner who handled their procurement and now they have more free time to focus on sales (they picked up new clients in the first 3 months), which more than made up the fee's they are paying the partner in China.

Not every story ends up like this but the moral of the story is , Sometimes making a little less is a good trade off to allow you to make more later. As a business owner, you need to know when its time to make a change because walking the same road over and over again, you encounter the same problems. Sometimes new problems are good to have.

 

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[Sadik]

I read most of your posts in the thread. My sincere advice to you is that you need an outsiders perspective into this. There are a lot of great people here in this forum who are into ecommerce. If I were you, I would really seek someone out who was willing to go over everything that you are doing and provide a different perspective. It seems you are getting too caught up in what you are doing and there might be obvious things escaping your attention.

Just my 2 cents. Wishing you the best!

- Sadik

 

[Paul David]

Work life balance is very hard to manage. But you are doing the most important thing...keep communicating and let your family know why you are working so hard. Hopefully your family will be very supportive of you and your urge to provide for them.

For your business, sometimes you need to focus on your strengths and let others focus on your weakness. What I mean by this is, if you had a good partner in China (procurement, sourcing agent) who charges you a fee that is acceptable, all that time spent on dealing with factory/production/shipping/testing/qc you could be spending that time on selling/enhancing your sales channel, etc.. (this is all assuming your profit margins are not very tight).

I had a friend who liked to micromanage his business (sourcing out of china) and for many years they used this approach. They finally decided to find a good partner who handled their procurement and now they have more free time to focus on sales (they picked up new clients in the first 3 months), which more than made up the fee's they are paying the partner in China.

Not every story ends up like this but the moral of the story is , Sometimes making a little less is a good trade off to allow you to make more later. As a business owner, you need to know when its time to make a change because walking the same road over and over again, you encounter the same problems. Sometimes new problems are good to have.

Thanks for your reply. Yes our profit margins can be tight unfortunately. I do however understand where you are coming from and when i've been working between 8pm-12 i've been spending that time writing out step by step guides for every task in my business. I've even been testing them on my 8 year old son. If he can follow the steps then anyone can!. Once i've finished them i'm going to outsource these smaller and less important recurring tasks to a VA in Philippines or somewhere.

 

[amp0193]

They conduced a random test and the plugs had failed. This is the 2nd time it's happened. I'd spoken at length to the supplier to resolve the issue beforehand so i can only assume they rushed out the order to make sure it arrived on time or completely ignored my instructions.

Hire an inspection service, to check on the goods in the factory floor and before you ship/pay for them. I don't have any services that I can personally recommend, but search around.

That might take care of your problem. At least in the short term, until you work out a new supplier.

 

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[Sanj Modha]

Tim Ferris says if the answer isn't a "Hell Yeah" then it's a "No". That's the quickest way to make any decision.

Does your brother:

1) add value to your business, increase the bottom line, help you generate more biz opportunities?
2) can you see your brother lasting another 10 years at the firm?

Just remember that if business was easy. We'd all be millionaires.

 

[G-Man]

Hire an inspection service, to check on the goods in the factory floor and before you ship/pay for them. I don't have any services that I can personally recommend, but search around.

That might take care of your problem. At least in the short term, until you work out a new supplier.

This x2.

I don't know the value of the goods, but when buying electronics from China, we always had them brought to a freight forwarder in LA that was under contract to the supplier then inspected and purchased ex-forwarder instead of exw china.

If it's a big company, they probably have their own site or a forwarder they do a ton of business with in LA, Vancouver, London or somewhere like that.

 

[Walter Hay]

Thanks for your reply. Yes our profit margins can be tight unfortunately.

You say that your profit margins can be tight. That, together with other clues, suggests to me that you are buying from wholesalers or other middle men in China.

If you have narrowed down the field to a few suppliers, you might care to PM their names to me and I will check them out for you, as I have done for many other Fastlane members. If you aren't buying direct from the manufacturers, chances are you are paying way too much.

Your product choice is up to you, but electronics and plain old electrical goods have inherent problems that could be making your life more difficult than it would be if you were selling less trouble prone products. If you want to, or must, continue in that product area, you certainly should have quality and compliance inspections done, either during production or prior to shipment.

There are a number of inspection services to choose from and I have provided a list here: Sharing my lifetime experience in export/import. Product sourcing specialist.

There is a lower cost Chinese inspection service that has worked well for a number of Fastlane members, but I think you need to pay for testing and that should be done by one of those I have listed, unless it is a certification issue.

The fact that HMRC have held up a second shipment suggests that it might not be a random event, but that your name and address have been flagged by them. Are you missing a certification that is required?

Walter

 

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[Paul David]

You say that your profit margins can be tight. That, together with other clues, suggests to me that you are buying from wholesalers or other middle men in China.

If you have narrowed down the field to a few suppliers, you might care to PM their names to me and I will check them out for you, as I have done for many other Fastlane members. If you aren't buying direct from the manufacturers, chances are you are paying way too much.

Your product choice is up to you, but electronics and plain old electrical goods have inherent problems that could be making your life more difficult than it would be if you were selling less trouble prone products. If you want to, or must, continue in that product area, you certainly should have quality and compliance inspections done, either during production or prior to shipment.

There are a number of inspection services to choose from and I have provided a list here: Sharing my lifetime experience in export/import. Product sourcing specialist.

There is a lower cost Chinese inspection service that has worked well for a number of Fastlane members, but I think you need to pay for testing and that should be done by one of those I have listed, unless it is a certification issue.

The fact that HMRC have held up a second shipment suggests that it might not be a random event, but that your name and address have been flagged by them. Are you missing a certification that is required?

Walter

Hi Walter

Yes the products failed an En 60950 safety test.

I also think you're correct in that because they failed once I've been flagged again by uk trading standards.

Now I know what test it is, I have sent off a couple of adapters from a new supplier to the same testing lab uk customs use for the same en 60950 test. I'm awaiting the results.

Regarding manufacturers, a lot I've contacted want a moq of 1000pcs per sku. Some of our skus might only sell 20pcs a month and I think our best selling one sells 400 a month. I have around 100 skus.

I will pm you the name of two or three manufacturers to check in who I've narrowed it down to and they are prepared to accept lesser quantity in the hope that orders will rise as times goes on.

Thanks for your help.

Paul


Sent from my iPhone using Tapatalk

 

[Paul David]

*UPDATE*

So it's nearly 2 months now since our last order was seized by customs. If i'm honest these last two months have been an absolute disaster but i've reached the F*ck it point now. Not in the context of whether my business dies or survives but i'm referring to the F*ck it i don't care what else get's thrown at me i'll keep coming back. I'll get back up, climb over the issue, learn from the experience and move forward.

After Walter Hay verified that the new suppliers in the far east i were dealing with were factories and not trading companies i placed an order for 30 days worth of stock from both, at the same time to test quality.

That was on February 14th. It's now 18th March and we've not received any stock.
Sales in January were £76,000. Sales in February £46,000. Exp March Sales £39,000. Not good at all. We've got zero stock on 80% of our product lines. The best sellers too. F*ck it. Bring it on.

One factory had the goods ready on 9th March. I arranged to ship them via a UK forwarder in order to prevent them going to same UK customs location i've had previous issues with, and also save cost. After 2 days of back and forth the UK shipper couldn't get the required paperwork from the factory, as the goods were arranged EXW instead of FOB. I then got my chinese forwarder to collect them instead.

I woke up this morning and checked my email to see if the tracking has updated with an expected delivery date. Lo and behold there is a shipping exception. I email my Chinese forwarder, the goods are on hold with customs for some reason. Great. F*ck it. Bring it on.

On Thursday i was doing my weekly P&L report and noticed our Ebay invoice was high in february compared to January when we had more sales. After further inspection i found that we had been charged £950.00 in picture fees for some Ebay Italy listings. £1.00 for each listing. I don't pay any listing fees and never have done. Spoke to Ebay and they blamed our listing software. I'm now trying to resolve this problem with our software company. The extra £950.00 came out of my bank on Friday. I will be expecting a credit for this from the software company. Couldn't have happened at a worse time. F*ck it. Bring it on.

The UK customs have agreed to release part of the last seized order but they are destroying 900pcs. They were supposed to arrive this week. We sent the paperwork back on last friday to release them and i had not heard anything by Wednesday so i emailed them to see what the hold up was. They still hadn't received the paperwork. I sent it back same day. F*ck it. Bring it on. I've now emailed the signed paperwork and hopefully these goods will be in next week.

On a positive note we've come up with a solution to prevent most stock lines running out in future and enabling us to buy more QTY of less SKU's which the factories like. This will be resolved on our next order. At the moment though until these two 30 day stock orders come in i can't even afford to pay the deposit on that next order.

The sales were making at moment are not even covering outgoings. I need at least one of these orders to arrive next week.

This is what real life as a entrepreneur is like at times. I'm that guy in the movies at the moment, the one who's on a boat in a storm that's getting battered by wave after wave. Well bring on the next F*cking wave. I'll ride it and continue on with my journey to calmer waters. Those of you that are already there, get me a beer ready.

 

[Paul David]

Time for another update and a lot has changed in the last 9 months. Maybe not financial wise but certainly direction of the business.

Firstly my brother is still employed by the business (for now), i added him back onto the payroll in October. Not because i could afford it but because my Father was unable to pay him any longer and i also need him until at least January 2018.

Anyway Since March this year i've:

• Resolved the supplier issue for power products
• Borrowed another 100k from Funding Circle
• Launched 100 new Power Product SKU's in each Amazon EU country (Spain, France, Germany, Italy)
• Launched 100 new Power product SKU's in Amazon USA
• Launched 2 new non power products SKU's in Amazon USA
• The 100 SKU's for Amazon EU FBA was a mistake, too many didn't sell so i've had to remove them and get them sent back to us.
• The 2 non power product SKU's in Amazon USA were a success.
• Discontinued 800 SKU's since October.

Long story short i've launched a new range of products (travel) for Amazon USA. Over the next 12 months i will discontinue all Power Adapter products. There's just too many models and not enough profit in them. I will make more profit with 8-10 new products than i will with 1000 power adapter products.

In January 2018 i will also be using a 3rd party fulfilment company in UK and close my warehouse. My brother and other employee will be let go.

 

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