Testing The Market

[Womz]

Good day all Carbonites

I want to become a reseller and my target market at first would be the Carbonites. I first want to get some feedback from as many people as possible.
Would you be interested in purchasing from an unknown and new reseller if the price is good?
I realise that many Carbonites are willing to purchase used goods to save money, and would be willing to buy new goods at lower than retail prices.

My plan is to sell for as little profit as possible to get increased sales as I do realise that consumers will rather buy from an established reseller if the price would be the same.
If my price is for some reason higher than a competitor's then I will try and beat that price if you provide me with a quote from the competitor.
I will be buying from a wholesaler at cost price and with a small profit margin that equals to cheaper prices for you as a consumer.
I am considering to offer free shipping above a certain order price. This will be dependent on how many sales I have in a given time period.
I will also be offering custom computer builds. A website is also under construction, but I need to see a interest as it costs time and money to start a business.

I would appreciate any feedback

 

[yourang]

i will from whoever if you provide POP and warranty and do overnight shipping, (not with fastway couriers please).

 

[Womz]

I will provide POP and of course the warranty is dependent on the product, but I will handle warranty claims. The wholesaler will ship to my clients directly to save costs of shipping twice.

 

[PHalanKS]

Is this like the esquire thing or some other dropshipping place?

To be honest, to me it doesn't really sound like you have enough to differentiate your business from every other reseller out there (not in the carbonite sense, just anyone who buys IT goods from a wholesaler and then resells them for 10% profit).

 

[Womz]

Is this like the esquire thing or some other dropshipping place?

To be honest, to me it doesn't really sound like you have enough to differentiate your business from every other reseller out there (not in the carbonite sense, just anyone who buys IT goods from a wholesaler and then resells them for 10% profit).

No this is not that esquire thing, but I know what you're talking about. To be honest at this moment in time my purpose is not to differentiate myself too much as I am still a student and I am doing this as for extra income and as a practise to see how to run a business, thus I do not have to have a profit margin of 10%, because it is not my only source of income. I'm looking more at a profit margin of 4%. I may try and add more value, but at the moment I'm testing to see if lower prices than competitors is enough incentive to purchase from me. I do appreciate your feedback though and will try to differenciate myself a bit more

 

[JollyJamma]

I would say you need to check your business structure gent. It's hard enough for the IT industry to make a profit even at 10% and you need to deal in 1000's of units to make a 4% margin profitable.
I know for a fact that some of the larger suppliers sometimes have a margin of 1% yet they sell 5000 units to the government, for instance.

You can end up putting in a huge amount of time and effort for little reward-I would say if you can do it profitably then go for it but it'll be hard.

 

[Womz]

I would say you need to check your business structure gent. It's hard enough for the IT industry to make a profit even at 10% and you need to deal in 1000's of units to make a 4% margin profitable.
I know for a fact that some of the larger suppliers sometimes have a margin of 1% yet they sell 5000 units to the government, for instance.

You can end up putting in a huge amount of time and effort for little reward-I would say if you can do it profitably then go for it but it'll be hard.

LOL when you're in varsity any income is good income. I did make calculations and I will be profitable. What would you guys want to see as added value? It's quite difficult to think of ways to add more value, that won't let me make a loss

 

[SilvRav]

Even at 4% profit, wholesalers will sell at a higher price to you, then lets say, esquire etc. you really need to buy in quantity (and I am talking 500-5000units) at once to get a good price.

Lets say, buyer A buys 500 units, and you buy as you get orders, so you buy 1, A will get it at R10 and you at R11, so even with buyer A adding 10%, he already makes a profit where you have to sell at cost to just sell. this doesnt included your shipping or anything.

To make a good business you also need to register a company, as you cant register as an individual with the big wholesalers, and you will need to regsiter on carbonite as a reseller...buy buy profit of 4%.

you need to think about this properly and not just about buying a product, adding 4% and wolla! you have extra income...its not that easy.

 

[Oj0]

People here register as resellers more to help the community than to make money. I was talking to a dealer here, I won't mention the name, and he was going to make R200 on a R8k deal. That's 2.5%. If you're looking at 4% markup you're already R120 more than him, and he has the advantage of being well known around here; he goes back to the Planet Mars days as far as I know. Said dealer can confirm if he wishes.

TL;DR if you're in it to make money here you're gonna be disappointed. Sorry dude.

 

[Oj0]

I'm on my phone, so sorry for the double post. If you move R10k per month you're looking at a profit of about R250 minus your reseller subscription of R80. That means you're looking at walking away with R170, out of which you have to take out admin and petrol. Margins here are so low that an etailer is selling for below his cost price due to doing a lot of ordering and therefore getting better cost prices. Is that R170 minus your costs worth the headache of dealing with returns? And that's assuming you can manage to sell R10k worth of goods per month. Are you going to take the financial hit when faulty goods get returned?

Prophecy took a 30% hit of an item I bought from them due to courier costs of getting the faulty item back to them and the new item to me. Henk, the owner of Prophecy can confirm that. It was a kit of RAM, 2x 1 GB Corsair DDR3-1866 about a year and a half ago. That kind of service means I'll continue to support them in the future. You wouldn't be the first person to disappear when faulties start coming in, I'm not saying you will but people don't enjoy offering after sales support when it hurts their pocket.

 

[Womz]

I'm on my phone, so sorry for the double post. If you move R10k per month you're looking at a profit of about R250 minus your reseller subscription of R80. That means you're looking at walking away with R170, out of which you have to take out admin and petrol. Margins here are so low that an etailer is selling for below his cost price due to doing a lot of ordering and therefore getting better cost prices. Is that R170 minus your costs worth the headache of dealing with returns? And that's assuming you can manage to sell R10k worth of goods per month. Are you going to take the financial hit when faulty goods get returned?

Prophecy took a 30% hit of an item I bought from them due to courier costs of getting the faulty item back to them and the new item to me. Henk, the owner of Prophecy can confirm that. It was a kit of RAM, 2x 1 GB Corsair DDR3-1866 about a year and a half ago. That kind of service means I'll continue to support them in the future. You wouldn't be the first person to disappear when faulties start coming in, I'm not saying you will but people don't enjoy offering after sales support when it hurts their pocket.

Prophecy is the only etailer I know of that pays for shipping when returns are made all the others that I buy from do not pay for the shipping and normally the manufacturer takes the hit with replacing faulty products I know of one that only offers service for faulty products up to 6 months after sale, and these are well established etailers. I returned a faulty mouse just last week to prophecy and the supplier replaced it, not that I'm saying that I would never need to take a financial hit. LOL but people obviously misunderstood me. My intentions are not to make a massive profit. It's more about the experience to me and like you said helping people out.

 

[themank]

As a student, time is what you have and the effort is up to you. As much as the odds are against you if your heart is in it, give it a go.

 

[chowzen]

Allow me, a super awesome genius, with looks to kill a wombat...to help you.
The IT industry does NOT make money from sales. It is merely there to introduce new clients and build a client base - so that - The IT industry makes its money in services rendered.
Aftersales, Support, VAS, Ad-Hoc Services and Ad-On Services.
The only way a retail only shop can make it - is if they are well established, good reputation, e-tailer, ordered from supplier with supplier stock ( not stock in-store ), very small margins and expenses and get their stock/prices at KIT3 or similar prices ( they get it cheaper, as they order in bulk ).
You are going to waste your time, energy and it will cost you in the end. I am sorry to burst your bubble, but IT man says #echo Helloworld.exe
I would suggest, build a website, print some stickers, render a service and have sales as the hook. This is how most of us do it.
PM the resellers on here - they are not making dosh. They are rendering a carbonite service per se. To which we are all very appreciative !! Thanks guys !!

But, humans are human, and you are probably going to read the above and still think you can make it, and all that - you know, every fish knows their bowls water and all that.
So - if you need help, shout - this community is always helpful.
I know my help is not what you want to hear, but it is the truth. #canIgetAwitness??

 

[SilvRav]

I think we all pretty much said the same above, but chow is right, we are a tigh knit community and more willing to help.

Even my courier services margins for carb is low and sometimes, more then I would like I take knocks as life happens, but I promised a service and I will honour that commitment.

Therefore you do continue, do realise you need a buffer of funds to fall back on and you can't then really use your profit...

 

[JollyJamma]

The IT industry does NOT make money from sales. It is merely there to introduce new clients and build a client base - so that - The IT industry makes its money in services rendered.
Aftersales, Support, VAS, Ad-Hoc Services and Ad-On Services.

This^

You can make R350 min on call out work and charge a callout fee of R100. However you need to manage your time and clients properly. You need to make it very clear about the terms and conditions. You will get a call at 3am before your exams, you will be expected to perform 110% above average and you will get shouted at for details the client has left out.

This entire thread is why I no longer want to be apart of that side of the IT industry. The margins are too low and the clients are too demanding for the money they spend. I would rather take my Bcom informatics and go do something totally different, like lion training.

 

[Anonymouse]

Allow me, Captain Awesome, son of Lord Amazing school you where I can. My take on this matter is different to the crowd.

Whilst I agree your margins would be peanuts, I very much think your target market does not exploit your full potential. First thing, register a business with CIPC and SARS.

The next thing you do is get yourself a job at the IT Help Center (of your college or varsity). I was lucky in that I worked at Maties I was able to access a potential client base was +/-28 000 students. Students seek help at the center, the work we were not authorized to do - I took on in my private capacity. Work here during your free time and you are bound to pick up clients. You do everything (Support) to sales. You will need to keep certain stock on hand - things like flash drives. Hopefully you'll manage to grow some sort of brand / identity and business may start to smile on you. I was able to nett between R2k - R10k per week doing this (2008 - 2009). Some days are good whilst others were bad. My margin was 7-10% (Lowered it on heftier sales.) This was luckily still AWESOME pricing within the Boland region.

The community on here is smart. Peeps do intense research before buying stuff and half the time - they KNOW what the proper pricing is. You will sell yourself short and possibly kill yourself trying to "earn a living" with sales purely on here. You would literally be competing with Prophecy which has a full on sales process requiring minimal intervention from the team (real time eCommerce solution). Drop me a PM if you need pointers.

I still don't know why I left this to work fulltime. I made more $$$ as a student! Bleh.

 

[Dragon]

LOL but people obviously misunderstood me. My intentions are not to make a massive profit. It's more about the experience to me and like you said helping people out.

Hope you get some good experience from this and i know we will benefit from those good prices.