Do any of these situations resonate with you?
- I’m so busy keeping up the website that I don’t have time to work on promoting the site.
- I keep missing payments and I’ve lost a few customers because I’ve misplaced the information I need to complete transactions.
- I’m losing customers here and there because of a problem with my website but I’m so busy servicing the other customers that I never have time to fix it.
- I can see so many more opportunities to sell and expand, but I don’t have time to do the work to bring in the new line or position myself in the new market.
- I’m behind on paying in VAT or submitting governmental forms and I’m getting worried that soon I’ll be in trouble.
If so, it may be time for you to look at the way you are running your business, especially if you are the CEO-marketer-bookkeeper-pick and packer-shipper-computer support staff-cleaning crew rolled into one.
Many entrepreneurs start out as sole proprietors, that is, individuals who begin a business that is solely owned by them, claimed on their personal income tax. It’s an excellent way to start a business because there are no startup costs for forming a corporation, no corporate taxes to pay and straightforward accounting and tax reporting practices. (The major drawbacks in sole proprietorship are the inability to be protected from liability, i.e., your personal assets are at risk and the reduced likelihood of receiving any kind of outside funding). As business builds, the sole proprietor can determine when it makes sense to change corporate form, add additional staff, take on outside investment.
If you are currently operating your business by yourself and you are beginning to experience the sorts of problems described earlier in this article, it’s time to consider when the timing will be right to add new talent to the organisation.
Here are some questions to think about:
1. How is the business being hurt by my solo status?
Take a good look at your situation. Remember that most entrepreneurs work far more than 40 hours a week. Can you manage with some added commitment? If you just need to add a few more hours and you can do it without getting a divorce or having a nervous breakdown, it’s usually worth it to stay solo a bit longer.
On the other hand, if you are losing business, making your customers angry or getting in trouble with required reporting, you need a solution.
2. What will it take to turn things around?
Many entrepreneurs mistakenly believe that to get some help, they have to hire a full time employee and catapult themselves into a much more complicated business; they don’t recognise the option and value of bringing on help in small increments.
You may need a four hour a week personal assistant who can get your desk organised, pay the bills and send out the invoices. Or, you may need to outsource your webwork to a specialty group so you can concentrate on the core aspects of your business (Upwork is one such service which allows you to easily find companies or individuals to outsource work to, with the ability to read feedback comments of providers).
Of course, each of these solutions creates a cost. Will the benefit outweigh the cost? Go ahead and do a real analysis. Quantify the expense and compare it to the alternative, i.e., the status quo. If getting the invoices out and paying the bills on time increases cash flow and eliminates late charges, the answer might be very easy. If, however, the math is not so straightforward, think about how you would use the time that is freed up. Would you market your business more aggressively or take some downtime to spend with family?
Only you can weigh the value of those choices for your business.
3. Which part of your work should you hand off?
It makes sense to hand off jobs that you are not good at so they take you more time than they would take someone better trained or skilled, jobs that you don’t like so they don’t get done such as keeping the books in order or jobs that keep you from running the most important aspects of your business, e.g., VAT paperwork is certabily important to keep in order but unless someone with your savvy is selecting and marketing the products, there’s no VAT to worry about.
One of the biggest mistakes people make when bringing on additional help is to hand over both the job and the responsibility for oversight. For example, it’s perfectly reasonable to bring in assistance to write copy for your on-line products if that’s something you don’t particularly enjoy or have skills for. However, even though you are no longer doing the job, you must still be responsible for managing the quality and timeliness of the work.
Making the decision to add resources to your business does make management more complicated, but if delegation or oursourcing frees you to do a better job managing, you will see the results in a stronger bottom line.
Listen to Demand Trends
You may be familiar with the fact that product sourcing is essentially split into four main categories:
Sourcing products that you already know sell well. This type of products are very easy to identify, by simply observing what the majority of your prospective competitors are selling*. You will be competing on price, and service. Offering add-ons like exceptional customer service, after sale support and product guides (publish the latter free online and use them to drive traffic to your site or auctions shop) are just some of the extra services you can offer to attract repeat sales in a price sensitive market. *Another indicator of high demand is supply shortage: when the supply of a product cannot meet its demand it is often indicative of a high demand product, however bear in mind that supply shortages can also indicate a new demand trend, as we will observe in point 4) below.
Identify a niche market. For example, a large fellow who just couldn’t find shoes to fit decided to open a business selling large size shoes – bingo! Just as he suspected, he wasn’t the only person who had that problem. Often niche markets are developed out of a personal passion or need, only to find that many other people share the same necessity.
Branding. Probably the highest risk option, often requires high marketing budgets and differing levels of R&D depending on how much innovation is a key factor in your market. Branding is growing in popularity, thanks to today’s easy access to manufacturers. Branding can help, in highly competitive markets like auction sites, make your product offering unique, non-comparable, and therefore more likely to fare higher margins and higher conversions.
Predicting and anticipating market trends. This is the topic we will be covering in this article.
Everyone needs to economize on fuel costs
Okay then, what’s happening around you right now? What is everyone talking about? The high cost of energy and the threat that energy costs will continue to spiral more out of control. People will be looking for ways to save on energy costs. They will be altering their own practices, e.g., setting the thermostat to a cooler setting in the winter and the air conditioner to a warmer setting in the summer, as well as purchasing energy saving devices such as energy saving bulbs, programmed thermostats that automatically set temperatures at the best temperature depending upon the circumstances, etc. This is an enormous market need that will spawn thousands of new products to help people and businesses lower their energy costs.
Energy saving products
There are already many energy saving products in the marketplace that can be promoted. For example:
- Spiral fluorescent light bulbs that use less energy and last many times longer
- Light switch and wall outlet sealers to plug possible leak spots that let cold air into a house
- Caulk and foam sealant
- Water heater blankets
- Weather stripping
- Foam pipe insulation
- Flow reduction faucet attachments
- Flush attachments that reduce water use for toilets
- LED Christmas lights
- Exterior shade screens
- Solar-driven products
- Air deflectors to direct heat and cooling
This is a short list in a burgeoning industry.
Products to support an energy savings lifestyle
Now let’s look at the next level of energy savings. More people will be weather stripping their houses and changing their light bulbs. Those same people and maybe others will also be looking for other ways to change their lifestyles as well. For example, leisure industry analysts are reporting decreases of 4-25% in people traveling for vacation, using rental properties and eating out. Many, many people are substituting expensive trips with stay-at-home vacations, camping trips and other less expensive, closer-to-home options. Are you getting the message, here? Yes, this means there should be a spike in all things related to economising on vacations. For example:
- Camping equipment
- Outdoor furniture
- Outdoor games – croquet, badminton and so on
- Insect removal supplies
- Bicycles and other sports equipment
- Board games, puzzles
You can easily make a huge list.
You can become involved in selling products in this marketplace in many ways.
- Open a new area of sales and focus on this market
- Add some lines of energy saving equipment that complement your current business, e.g., regulated flow watering systems for your gardening business
- Become an affiliate marketer for other people’s products
- Improve on products already in the marketplace and manufacture your own, original products. (Note: you don’t have to be an engineer to make an improvement. For example, weather stripping is typically grey or brown. Why not make weather-stripping that complements current home design colors so that energy efficiency is not only practical but stylish?)
- Discover and introduce innovations that are already available in other countries but not well known in your country.
- Dust off old favorites and introduce them in a fresh way, such as the game of horseshoes as a better way to improve eye-hand coordination than video games
As you can see, many very common products can be repositioned to sell as energy saving (or money saving) devices.
Your search might begin by identifying possible energy saving products for your current business arena. You can Google ‘gardening and energy saving products’ to get an idea of the kinds of options available for that niche. Once you have a good sense for the products you are looking for, return to GAUK to find your trustworthy, well-priced wholesale sources. You can either search the supplier offerings directly by using a keyword search or you can post a trade lead, describing what you are looking for and asking suppliers to respond with product options.
For leisure products, go back to the list and think of what people need to enjoy their backyards, to go camping, to become involved in an inexpensive sport. Follow the same product location procedure, using GAUK enormous directory of suppliers.
Go for it!
The high cost of energy is a problem for all of us. But, within every problem there are opportunities for those who are creative and entrepreneurial. And, even better, the energy-saving and ‘simpler life’ products you sell will improve everyone’s life and that’s a benefit that it’s hard to put a price on.
Buying in Bulk – Look Before You Leap
People who re-sell online are always looking for a bargain.
They go to yard sales, peruse trade portal listings, look for manufacturer closeouts, to identify products that can be purchased in volume at a low price and sold for a profit. Unfortunately, one of the problems with bulk purchasing is that the allure of the low price can cause even the most sensible entrepreneur to set aside common sense principles of good business buying.
Know your trading partner
Unfortunately, there are a lot of scams in the surplus and liquidation business. It’s not that hard to put up a respectable looking website and make lots of offers that won’t be honoured after money changes hands. How do you figure out who you can safely work with? You can read our article on evaluating suppliers which provides tips on ferreting out the scam artists (such as checking to see if a vendor bank account is a business account or a personal account). Even better, you can stick with vendors you find through the gauk Wholesale verified suppliers directory.
Understand the merchandise
You need to understand exactly what you are buying. Why is there bulk availability of this product? Is the manufacturer going out of business or is this a reject batch from an ongoing concern? Does the product meet any applicable standards, e.g., electrical safety, child safety and so on? How many of these items are you purchasing? If there are 40 cases, how many items to the case? Is the pallet of product all the same, e.g., are there name brand items on the top and knockoffs on the bottom?
Understand the cost of purchasing the product
How much will it cost for you to move the product to your storage facility? Will you need to spend additional time working with the product to assemble, package or otherwise manipulate the item or items? Will the product require any unusual handling or shipping materials? Each of these factors will add cost that needs to be factored into the price.
Confirm the market
This is a huge question. It’s very exciting to come across several pallets of x merchandise at a fraction of the price and yes, it happens all the time as an importer abandons inventory at the warehouse or a shipment is the wrong color for the original purchaser but will work for you, etc. If the price is low enough, you may well be able to accommodate any special handling the merchandise requires. But, is there a market that will purchase this product? Will they purchase at the price you are offering?
Develop a marketing plan
Okay, you know the costs, you know the markup, there is a market that will buy the product at that price. Do you know how you are going to find and sell to that market? In other words, do you have a marketing plan that will move the inventory in a timeframe that makes tying up the money in the inventory worthwhile? If you are going to need to develop a whole new customer base for this product, you may want to re-think buying the product in bulk. That’s the time to so some trial selling, not burden your business with a lot of product.
So is the bottom line that you should never take advantage of a bulk buying deal? Absolutely not! The key is to follow the sensible rules of trading:
- Check out the supplier to be sure it’s reputable;
- Be sure you know what the ‘bulk’ contains. Get assurances in writing.
- Calculate all costs of handling and be sure you can sell at a profit.
- Look for deals within your area of business so that you already have a built in customer base who will purchase these items.
It’s always satisfying to score a coup by buying low and selling at a bigger profit than usual. Keep your eyes open and your business hat on while you search for those deals.