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MenuWhat kind of margins can I expect buying big quantities (100k/1M) in tech products directly from manufacturer?
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My best guess is that you'd get it close to wholesale price, which is anywhere between 30% and 50% off retail price in the electronics industry.
You'll need a sales tax license number to prove you're a business rather than an individual.
Pricing requirements will depend on the manufacturer. Some will have a "MAP Policy", which stands for Minimum Advertised Price, that dictates the price you advertise on your website. Note that "advertise" and "sell for" are not the same thing - that's why you see some sites that say "add to cart to see the price" - they're circumventing a MAP policy. Unless they make you sign a MAP Policy though, you should be free to advertise and sell at whatever price you want.
Margins can vary by manufacturer depending on whether they are first (eg. Samsung TV), second (eg. Toshiba TV), or third tier (eg. RCA TV).
In your negotiations with the manufacturer, I recommend that you discuss price protection to ensure that your margin rates remain neutral as the product becomes obsolete. Alternatively though, you may be able to negotiate lower costs if you choose not to be protected; however, you would want a robust exit strategy to ensure your margins are protected should your sales not materialize.
It depends on the Brand and Manufacture. If the Brand is desperate to liquidate the stock, then you can get bottom rock prices. You should do lot of analysis on the current selling price and your expected margin before negotiating the deal with the brand. Prices in electronics is always volatile. Even if you get a low price, you should have action plan to quickly clear the stock.
Related Questions
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Do you think this can be a successful business venture?
I have several years of experience in marketing and optimization in the eCommerce space for one of the largest online jewelry retailers in the U.S. I also have several year of experience working with online retailers that operate under a subscription models. In order to answer your question, you will need to consider the following: Will your subscription revenue generate enough income to maintain the operational strains of this business model and be profitable? If you do not know the answer to this, you need to work backwards to arrive at the monthly pricing for your subscription service. Some things to consider: 1. Cost associated with operational logistics like shipping and fulfillment (assuming customers have to receive and ship the jewelry back to you) 2. Carrying costs associated with holding on to inventory on consignment. (assuming you will not own the jewelry outright) This may come with other contingencies like having to carry insurance and the operational aspects that will help you handle recovery of lost / unreturned inventory, etc. 3. Costs associated with building a transactional platform that is built for the monthly activity you will have with a subscriptions service. If you take Macy's for example, most customers place online orders 4 times per year or so. In your case, the nature of your model requires a different platform as you will be taking recurring payments, arranging returns, maintaining credit card / payment information, etc. In short, its a different animal that your startup eCommerce type platform. If you'd like to get more details or insights I'd be happy to hop on a call and chat.MP
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Why don't small business retailers have e-commerce stores on their websites? How do I show small business owners the benefits of e-commerce?
I live in Brooklyn, NY, which is a really fertile ground for small business retailers. My experience speaking with a lot of the shop owners is that they simply don't have the resources to maintain an online presence. Just keeping the brick and mortar operation running consumes most, if not all of their time, especially if the are also creating and producing their own products. For many that I do see take a shot at e-commerce retailing, they may get Shopify/Squarespace site set-up, then just run out of steam to keep it going. One innovative, in-between approach that I've seen one of my favorite shops take, is to actually focus on using a single social media channel, Instagram, and maintain an e-commerce function through it. (See @peopleof2morrow on Instagram)CR
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Any tips on how to structure a first-time wholesale deal?
I would offer them a proposal to reveal their source to you in exchange for a small percentage or fixed amount of each unit ordered. You would also need to structure the offer in such a way as to guaranty that you would not compete with them or circumvent them, if they agree then you would need a legal contract drawn up between you and themVM
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I started an all natural dog cupcake business w/ my sis that gained popularity fast, but we don't know what the best business model is for us to grow?
Having 4 dogs and being a former sugar addict, I love the idea of dog cupcakes, kudos! My wife and I are currently solving a very similar issue with her t-shirt business. We don't have a freshness issue to deal with like you do, however we do have a scalability and growth issue that we are tackling. Understand, there isn't really anything that remarkable about dog cupcakes, it's cool concept but it would be very easy for someone to deconstruct and create their own recipe and brand. So you'll need to focus on how you sell your cupcakes. What value you offer your customers? Why your recipe is unique? Is there any portion of your product, formula or service that could be trademarked or patented? Do you have a memorable name, tagline and mascot? Are the health benefits to your product? I know that in some cases pet food can be highly regulated so you may not be able to make specific health claims. Next, I think you should look at a three pronged approach that is scalable: 1. Continue to develop your local market, treating it like a test kitchen. Work on new recipes, concepts, products, ideas and test them locally. Build a unique product line and a unique system for creating those products. 2. Develop a strong network of pet owners, pet shops, boutiques, organizations and so on. 3. Market your dog cupcake system and sell it as a turnkey package. This could be as simple or as fancy as you want to make it. The simple way would be to sell one time "starter package" with upgrades on a subscription model. This would include order forms, marketing plans, marketing materials, new product ideas, training videos, shopping lists, ingredients and so on. The expensive way would be to lawyer up and create an actual franchise but this can be very very expensive. I hope this was helpful and I'd be happy to work with you further on developing your business. Good luck and I look forward to buying Sadie, Charlie, Nixie and Sachi some tasty treats from you in the near future!SM
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How do I sell iPhone cases and make a profit out of them?
Selling any product including "iPhone cases" on websites with high competition like Ebay is surely not an easy mission. There are hundreds of sellers on Ebay and other websites who are already selling cases. If you need to get some sales, you need at least one of the following: 1. High reputation, reviews or feedbacks on the website that you are selling on. 2. The product that you are selling must be unique in some way or simply not found anywhere else. 3. If your products are featured at your own website, then that website of yours must be ranked properly online and marketed decently around social media networks. In your case, a possible approach would be to create your own website to sell your products on or work as an affiliate marketer for other big sellers in exchange for commissions. Depending on your budget, you need to draw the right plan around. If you have a good budget to invest in your business, then creating a website for yourself is a must. Otherwise, you need to rely on other websites and seek to provide unique or special products to get an edge around. Hope that helps!RZ
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