Competing with bedroom traders and eBay
Discussion
I considered starting my own business (performance car parts) once, which I know is a tough market to get into. When I was looking it looked like it would be very, very hard to get off the ground as these days you can get anything you want from eBay from people who make a few pence here and a few pence there.
As a business with rates to pay (rent etc) I couldn't see how I could make this work as it would be very difficult to compete with people who are happy to make so little on every item, and that as a business would it be really worth selling something and making such a small amount on it. These sellers have very few over heads which is probably why they can afford to operate this way, but I would have wanted to do it properly with premises etc.
Has anyone else done the maths on a company where product supply to the general public (not business) and decided it wasn't financially justifiable?
As a business with rates to pay (rent etc) I couldn't see how I could make this work as it would be very difficult to compete with people who are happy to make so little on every item, and that as a business would it be really worth selling something and making such a small amount on it. These sellers have very few over heads which is probably why they can afford to operate this way, but I would have wanted to do it properly with premises etc.
Has anyone else done the maths on a company where product supply to the general public (not business) and decided it wasn't financially justifiable?
Hoofy said:
No point competing with "race to the bottom" businesses. They're doing it for pocket money either as college kids or to supplement their benefits (come on, this is PH, you have to have a dig at them).
If you want to do it as a serious business, sell quality products, offer great customer service and VFM, charge a decent amount. Look on Amazon at electronics eg power packs - you will get the piss cheap stuff (£1.50 etc) but they will have loads of 1 stars with complaints, then you have the the same power storage costing £10 but largely 5 star reviews.
Same goes for any business, really. One part of my business is fitness sessions and I could charge just £1 to fill the classes but it won't cover my costs. So I'd rather have fewer people but these people are serious about my sessions and will come every week or call to say they can't make it if they're not well. These are quality customers who will pay up to £10 for a session plus they are likely to have private sessions and pay up to £50 an hour. In return, I make sure they get VFM in whatever way I can - you form a business relationship with them.
Of course, the Sports Direct model works, too. But you need to sell s
tloads of stock. That said, even SD doesn't reduce prices that much. You can't buy, for instance, £1 slip-on trainers in the shops but you probably could on ebay.
Oh of course, but the problem is is that most people want something for nothing, so they'll go to the lowest price they can find. I like to pay as little as possible, but I will often choose something more expensive according to quality of item.If you want to do it as a serious business, sell quality products, offer great customer service and VFM, charge a decent amount. Look on Amazon at electronics eg power packs - you will get the piss cheap stuff (£1.50 etc) but they will have loads of 1 stars with complaints, then you have the the same power storage costing £10 but largely 5 star reviews.
Same goes for any business, really. One part of my business is fitness sessions and I could charge just £1 to fill the classes but it won't cover my costs. So I'd rather have fewer people but these people are serious about my sessions and will come every week or call to say they can't make it if they're not well. These are quality customers who will pay up to £10 for a session plus they are likely to have private sessions and pay up to £50 an hour. In return, I make sure they get VFM in whatever way I can - you form a business relationship with them.
Of course, the Sports Direct model works, too. But you need to sell s
tloads of stock. That said, even SD doesn't reduce prices that much. You can't buy, for instance, £1 slip-on trainers in the shops but you probably could on ebay.I guess in a service offered business model like yours, it is very easy to offer VFM because you are your business in many ways. When selling suspension for instance, people will go the lowest price possible. That tends to be something who works from home in their bedroom making 40p on it. I have mixed thoughts on the eBay model tbh.
MagicalTrevor said:
Interestingly, my biggest issue when shopping on Amazon or ebay is actually finding higher quality items so I generally avoid those sellers you talk about
I agree, but you and me are more so in the minority I think.Hoofy said:
The business is largely irrelevant. Those people who want to pay 10p for something are not the customers you want. You want those who are willing to pay more but you have to prove you're selling something worthwhile - just like I have to do.
You provide a service. I would merely have been supplying parts that could be obtained from anywhere (ie Koni suspension) which people could sell cheaper on ebay. I guess this is my downfall, I could never think of anything of value to add over the product. Sure customer service, engaging the customer, offering advice, but thats all I could think of at the time.
I always thought it would be a struggle to even compete with the likes of DemonTweeks etc.
Look at Carisma Auto Design and how they have had to change their business. They now do Merc Sprinter conversions.
I always thought it would be a struggle to even compete with the likes of DemonTweeks etc.
Look at Carisma Auto Design and how they have had to change their business. They now do Merc Sprinter conversions.
Hoofy said:
TheAngryDog said:
I guess this is my downfall, I could never think of anything of value to add over the product. Sure customer service, engaging the customer, offering advice, but thats all I could think of at the time.
I always thought it would be a struggle to even compete with the likes of DemonTweeks etc.
Look at Carisma Auto Design and how they have had to change their business. They now do Merc Sprinter conversions.
-Buy a box of lollies (from ebay!) and give a free lolly with every order.I always thought it would be a struggle to even compete with the likes of DemonTweeks etc.
Look at Carisma Auto Design and how they have had to change their business. They now do Merc Sprinter conversions.
-If they're expensive products, see if you can get hold of some kind of motoring or motorsport magazine at a reduced rate and throw a magazine in.
-Pop a 10% discount voucher in with the delivery.
-If they're the right kind of customer, how about alloy dust caps? Should be piss cheap on ebay.
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