We are busy, just not as busy as we would like to be. The interpretation of that is we are paying the bills but not making much money.
Over the last 2 years we have been bumping the idea of starting a web based tool surplus business. Buying in bulk, breaking it down and selling it off via a web storefront or an online auction service such as ebay, probably both.
I have the room. I have the son that is a computer guy and can set it all up. I have the time since we are not booming. I have the capacity to start it from an infrastructure standpoint ie: offices, storage, computers, phone system, trucks, secretary etc.
And the numbers seem to work on the surface. There are competitors but not as much as there is in remodeling. I feel good about it. So what’s not to love? Since we are anylizing business’ here as of late I thought I would ask for some ideas on this one before it flops lol.
I can buy bulk, name brand tools (battery drills, saws, hand tools, etc) for about 20% on the retail dollar shipped. Sometimes less. With some figured in for warranty and some for failed units, and handling costs I figure a raw number of 10-15% for that area overall should work.
So my numbers that I am using are 35% of retail to get it here and on the inventory. If we can sell at an average of 55% of retail we should be able to make money. I think that 60% may be reachable. As you can see I am a round number guy so all my figures are in even 5’s.
What do you think? If it works and it grows then the cost for product goes down as you can buy at a better price switching from pallets to truck loads and your dealer base increases. DanT
Replies
Well........
if you are gonna give us all "BReaktime Bargains"---then i am all for it, LOL
Best wishes, stephen
FWIW, I've had very good results, selling off a few things on Ebay which are in good to excellent condition. I wouldn't hesitate to try something like what you're contemplating if I had everything lined up as you describe.
It's pretty clear from checking out certain large volume Ebay sellers that they're working out of a small space with minimal help. It looks to me like it's all about taking care to represent the product accurately and ship promptly.
One word of caution; I've learned from personal experience and from others that no package is safe from abuse in transit. Bubble wrap is essential. It can be purchased inexpensively on-line in big rolls, about 4'X2'.
Good point on the packaging. We were looking at buying a skid of tools and giving it a try. If it pans out we will probably invest in a peanut dispenser as it is much faster than bubble wrap.
One thing we just learned is we get software that will link up with quick books and do inventory, shipping labels, client info, (so we too can send the dreaded spam lol) invoice, all in one neat lap top. Amazing what can be done. Thanks for the input. DanT
If it pans out we will probably invest in a peanut dispenser as it is much faster than bubble wrap.
I don't know anyone who likes to receive stuff packed in foam peanuts.
I did a store front remodel a couple years ago which included designing and building a shipping area. The owner had ordered the large rolls of bubble wrap I described. I made an overhead rack for them out of 2" PVC pipe. It works almost as easily as a toilet paper dispenser, with the same kind of tear off perforations.
That software package sounds great. The business owner I did the remodel for paid a lot of money for something very similar to what you describe and had quite a hard time with it for a while.
Some of the problems had to do with credit card business. That's something I'd look into, early on, how to offer secure payment options which are fast and easy for both you and the customer.
BTW, there's an unseen business side to search engines. If you want your web site to pop up on the first page, even at the top of the list, when a potential client inputs certain words which define his search criteria, you gotta pay BIG BUCKS, every month.
As I understand it, it's like a bidding process, every month. You pay according to the key words you want to include, the region you want to cover and the position on the list you're willing to accept.
Edited 7/17/2008 10:15 am by Hudson Valley Carpenter
"you gotta pay BIG BUCKS, every month. As I understand it, it's like a bidding process, every month. You pay according to the key words you want to include, the region you want to cover and the position on the list you're willing to accept. "And that has pretty much ruined the search engines from my point of view. Anyone know a good one that doesn't cater to the top dollar advertisers? Bob's next test date: 12/10/07
mamma.com
I can not say for sure that they don't cater to top dollar advertisers as you request, but it is a smaller search engine that I use almost exclusively with excellent results, and I would rather feed mamma than google.
so is your business model close to say the TOOL CRIB arm of Amazon or are you thinking of even being one of those providers that might appear under umbrella of Amazon
(realize TOOL CRIB as we knew of it may have disappeared in abyss of casualties due to web based businesses )sounds ambitious & I'd be on sidelines w/ thoughts more like davidmeiland
considering your other very active involvement w/ construction I would focus on a smaller kind of niche market like SS nails, fasteners
- and as that prospered, gave you the experience grow into more product
just thinking aloud and something on near horizon is the internet has maintained huge advantage not having to charge tax except where they maintain store frontage & many have foregone shipping charges over say $ 99 / an affordable concession as their physical costs can be so minimal compared to refined curb appeal spaceanyway the tax holiday is about to expire & shipping is / will be only climbing perhaps eliminating your advantage over the local orange & blue storesmy saying I'd be on sidelines reflects my more cynic nature which would negate my chance of enjoying the spoils
all the best to your endeavor
No, not really the tool crib deal. Salvage, recondtioned and overstock tools is the idea. So the line up will change constantly.
I have the advantage of having my son along who will run this venture. I lose one of my better field guys but gain a person I trust to run another company.
Risk, sure. Reward? Hope so! DanT
I don't think Google caters to paid advertising. When you do a Google search, the first hit is the one that is most often clicked on, AFAIK. There are ads on the right side and sometimes on the top (below the search bar but above the first ten hits) but I don't think those paid ads ever make it to the main content unless a lot of people click on them.We have a Google Adwords account, but I cannot do anything to get our website at number one.But, I could be wrong.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I see your point. It will really come down to what works best and is priced best. Probably the other way around lol. DanT
http://blogs.guardian.co.uk/ethicalliving/2007/08/popcorn_blog.html
Just get a whole bunch of hot air poppers and use popcorn.
Tell clients to just throw it out the window!!!!
Do you also have the capacity to handle the accessories?
That is where the profit is in power tools.
The router bits, not the router
The saw blades, not the saw
The MM blades, not the multimaster
the tool itself is a loss leader.
At least that is what I've been told.
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
You nailed it.
The ink not the printer, and soon to be the fuel and not the car.
Sorry for the delay all. I hadn't checked this thread in a couple of days as I thought it might be dead!
The idea is to buy surplus and reconditioned tools. I assume that some accesories will come with the deal. We have already discussed the idea of a new tool line as some folks may come to the site and not see what they want in terms of surplus etc. but need it so they order new instead. That conversation came from noticing that a lot of places had both lines. DanT
During the past few months my son has sold a lot of music equipment on ebay
Guitars he paid $300 for a couple of years ago, he sold for $400 or even more.
He said if he placed an ad locally he wouldn't have sold anything.
There's something fun about buying on Ebay
It's a pain packaging this stuff and shipping it.
Dan, don't forget that you will be dealing with credit card chargebacks, claims of defective items, and all the other attendant whining that goes with retailing. Are you going to let people call your secretary to say that the chuck key that came with the drill has a a little burr on it and they want another one?
We had thought of that and made allowances in our numbers to be the "great service" company vs the poor b#stard that gets panned here lol. And I am sure it is no different than dealing with the public in the remodeling business. DanT
my oldest daughter has been making a living on ebay for about 4 years,until her twins get off to school.past year or two she has been doing toys,before that found a place to buy lot's of purse's [she knew she might have a problem when the truck pulled up and asked if she had a forklift] . she's done pretty well,but that said you can't imagine the time it can take to list,answer questions,send invoice's ,pack and send.
it's so hard to find something that not everybody else is selling,her big home run she bought a bunch of 1976 ray ban sunglass'es new,paid a 1.00 ,some brought almost a 100.00. but her success was from the fact that was nobody else had them.so while you concentrate on tools,if you run across a deal on tennis shoes,buy em. thats the advantage to this,you may be a tool seller but if a great deal pops up you can have it on ebay and have people looking at it that day,versus in a store you sell tools,tennis shoes would rot .
get ready for some pretty cranky people,some pretty dishonest people,and some that are happy to do bussiness with you,just like a storefront.
get some inventory and give it a shot,what have you got to lose? worse case is you have to sell at a loss here on bt :].
let us know what your selling,we'll at least run the bids up!!!! larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Good information! During our early discussions we talked about names for the company and I said that I wanted it generic. I told my son if we find a deal on a thousand Barbie dolls I want to buy it and sell that. Tools are just a base that we know. Not one we are married to.
I appreciate the point of finding areas of low competition as well as the time to answer questions. I figured the dishonest (I worked in a prison so I think everyone is corupt lol) and people who liked you. Thanks again! DanT
If you need a good (and free) store front, check out http://www.zencart.com. I'm pretty sure there are addons available for linking it up with quickbooks, and plenty of payment gateways, like PayPal, 2CheckOut and many others. Your son should be able to set it up with no problem. Also, their support forums are very active and many knowledgeable users that are glad to help out.
Great! I will have him check it out. DanT