Forums: Discussions for entrepreneurs and small business.

I would like to open an ebay store helping luxury retailers in my town sell their merchandise online. The idea is that this would be done on consignment (NOT DROP SHIPPING!). I'd take physical possession of the items.

 

I would sell on Ebay instead of Amazon because Ebay has a stronger user community which I believe is important when developing relationships with customers.

 

I would sell primarily customer returns, open box items, and items on clearance. 

 

I've looked into some of the costs involved and I estimate that I can get this started for around 3500.00

 

ebay store monthly costs - 50.00

ebay store build out (programming) 1000

Monthly marketing budget - 300.00

terapeak - 23.00

po box - 15

legal - 700

travel - 120.00

 

I would like a 35% commission, but after expenses, my net profit margin might be around 10 to 15%. To hit my goal of 4,000 a month in my pocket, I'd need to hit sales of 26,000 to 40,000 dollars. 

I don't see why they would refuse my services after all it's in their best interest.

 

thoughts?

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Nathan your end of the deal sounds pretty good. Now all you need to do is show the stores how their ROI is as good as the deal you will be getting.

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Small and home-based business websites that make you money!

Update:

 

Been a while sense I last posted and a lot has been going on. Since the past update I've been mainly writing the business plan and trying to think of cool domain names that weren't 20,000 dollars plus, were short, and had a good fit. I found one (secret for now til I buy the domain) that I will be buying this month and doing my trademarks through legal zoom.com

I also have my logo being worked on by 99designs.com. I like the money-back guarentee if your not happy with the results. 

I'm seeing an attorney today about the consignment contract. Legalzoom has one but I feel that it may need to be modified for my business needs.

I also found out that I can get 300,000 in liability coverage and 10,000 in merchandise damage coverage for 250 a year from statefarm. Bonding up to 100,000 is a flat 100.00 paid once.

Another important change is that I will no longer be focused on a niche. I'm going to be the amazon of the consignment world. I'll be selling everything from designer handbags, 18 wheelers big rigs, electronic , collectibles, college text books and more.

How will I be able to focus on so many products you ask? Well Ebay has something called the trading assistant program. Some of you may have herd of it, if not read this http://pages.ebay.com/tahub/index.html . 

Eventually I will license out my brand and team up with these trading assistants that are around the world to help me source products to sell. These guys will get 50% of my 35% fee. It may not sound like a lot but 50% of 35% of a 100,000 dollar sale is 17,500.00 . I'm not going to go into all the detail but thats basically the plan. 

In the beginning I'll start with local churches and non profits helping them raise money.  If I can get 500 items for a minimum value of $50 a piece thats 28,000. I hope to be able to sell 75% of my inventory each month which leaves me with 18,750. My fee from this would be close to 6,600.

If I do this right and my numbers are accurate, I should become cash flow positive rather quickly. 

 

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Logo got done a few days ago. I'm pretty proud of it, you can check it out here  http://www.flickr.com/photos/78211196@N05/7168842258/ 

 

Ordered my business cards from vista yesterday. They'll be here in a week or two.

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