Forums: Discussions for entrepreneurs and small business.

Hello everyone, I`m 16 years old and I love business. I was wondering what everyone here thinks about my personal shopper idea;

The concept of the business is that  I would shop places like eBay and Craigslist for my customers. I would find listings that are 20% or more off retail. At first I would focus on electronics, as that is more my expertise. I am pretty good at finding great deals and thats why I think I could be successful.

Anyone interested in my services would contact me via email and describe what they are looking for. I would then confirm and begin looking. The customer would then pay me for any listings I found that matched their criteria. I am thinking that $5 sounds like a fair price. What does everyone think? Could it work? Thanks for your help!

One problem would be that the 20% savings you`d provide for the items, would then be swallowed up by your service charge.

The advantage would be for people who don`t know what it is they`re trying to buy. However, those people wouldn`t be shopping online in the first place.

What I`d suggest would maybe be to combine the two concepts. Your primary line of business would be "consulting," and offering people help in selecting what it is they`d like to buy. Your secondary line would be that YOU would go find it for them if they don`t want to be bothered. That`d get you the income from education, and also provide the customer with a convenience factor. :-)

Thanks for your help,

Do you think a service charge that is a percentage of the final price is more appealing? That way, they would still save money, even if they didn`t spend as much. I like your idea about consulting. It was something I was going to provide for free, but I think it makes sense to make that the main feature.

What do you think are the best ways to go about advertising a business like this?

Again, I really appreciate the help. I`m trying to learn as much as I can.

You`ve likely heard about a "business plan," right? People get all nervous about something that`s supposed to be totally formal, major deal, and so forth. It`s not. It`s like a "to do" list that`s more complicated than just a few items. But it *starts* with a 5-10 item little list on a napkin, half the time. :-)

Your question about a commission versus flat-fee service charge would be part of your financial section of this plan. It`s often why people combine a business plan in both something like Word and Excel---writing tool and spreadsheet. That way you can create scenarios.

Suppose I`m in the market for a really nice home stereo receiver/amplifier. Back when I was young, they were called receivers, amps, or "heads." Now they`re probably home-theater central control transmogrifiers. I dunno. I haven`t been shopping...that`s why I`m "confused."

I come to you and tell you I want something that I can plug in my CD player, VCR (because I have legacy tapes), a DVD player, a cassette deck, and if I want, an old analog phonograph player (legacy vinyl LPs). I also want it to get AM/FM, handle a subwoofer and Dolby, and if I could somehow get XFM and Internet radio, that`d be cool too.

Think of all the information you`d have to collect. Then think of the written report you`d have to do. That`s worth money, because it takes time! How much time? You could work out about how much time it`d take you to run the research and do the report for each of the broad categories of items. For example, audio, video, speakers, car, digital disk, etc.

When you have some averages, then you`d figure out how much is it worth per hour for you to do this. A spreadsheet would be a great place to track the line items, for time and totals, and for money. Then you could decide if you want to do it on a contract basis, per-hour basis, or percentage of final price basis.

Now let`s say you think a Denon something would be perfect for me, and it`ll be around $900. Your service commission would be, say, 20%, or $180. First of all, would you feel that was fair, given all the research? Then there`s your report where you explain the pros and cons compared to maybe five other brands. Taken together, would $180 do it? Suppose I just say..."Nah...that`s okay, I`ll just wait." What happens to your money then?

We have a number of community members who provide home entertainment consulting services. Some are high-end, others more moderate. If you look at this as a consulting business, then your contract fee would be a separate issue from the items you purchase and install. (That`s another aspect---installation and wiring).

Your business "model" is an existing type of business that you can use that`s sorta-kinda like what you have in mind. You can then examine how the model works, and get ideas for how your own would work. I`d suggest that for a home entertainment consulting business, you could use an Interior Designer model.

The point of a business plan is to create on paper a virtual world in which your company is open for business. You use your imagination to get as many real details as possible. Would this be based in a store? How much room would you need? What would be the monthly lease, utility bill, water bill, HVAC bill, and phone? How many employees would you need? And so forth.

If the business plan seems overwhelming, remember that it`s just YOUR plan. You can work at it, on and off, when you`re feeling confident and inspired. You can ask specific types of questions, focusing only on, say, monthly utility bills. Then you can talk to business owners in the area you have in mind, and get a sense of how much *your* utility bills would run.

See how this works? "Business" isn`t some scarey mystery. :-) It`s when someone has something and someone else wants that thing and is willing to give money in exchange. Then you keep an eye on the money and the thing until both people are satisfied they`ve done a deal.

Thank you for all the help, I really appreciate it.

I`m thinking I wont do something so big, in terms of price and amount of research. I was looking to target my local community. I think that if I make my main service finding really good deals on places like eBay and Craigslist I avoid the problem of not being paid. This is because we would`ve already agreed that I would be paid if I found listings matching their criteria. And then most of the items I would find would be over $100 and at 20% thats $80 + $5 and thats still a savings of $15. With more expensive items the value would be greater.

As a student I have some time constraints and so the less the workload the better.  I will definitely take everything you said and apply it to my idea. Thanks so much for your help, and any more thoughts/opinions/suggestions would be great.

Alright, so this is definitely a buyer`s helper kind of thing. You`d still want to develop a business plan, as to how you would do it, how much time per project, who would be your market, and so forth. Since you`re a student, I would encourage you to take (or audit) some sort of basic business class, where you`ll learn more about such things as business planning. You also may want to read some books on the subject.

To the topic at hand, though: who would be your market and how can you reach them?

It`s been my experience that people who are in to electronics, also are in to a lot of research. So most people looking for home electronics will do their own shopping and research. That leaves "some" people, right? Who are those people?

Who do you envision would come to your Web site, for instance, with money to spend and no time to shop? Why would they want you to do that shopping for them? I`m not criticizing the idea, I`m asking the questions to help you develop the basic shell or outline of an initial plan, see?

How would you capture what it is they want you to find for them? Would it be a form? What would you put on that form? How would you capture their price range? Suppose they`re shopping for an iPod, have casually looked, but would like to find the best possible deal: Why wouldn`t they just use Google Shopping? How would you present your service as "competing" with, and being different from Google Shopping?

Suppose you decide to make this a physical business, not Web based. Would you then set up an appointment to meet with and interview your potential customers? What age group, and what sort of financial life do you see as the people who would need or want a shopper like yourself?

Again, I think the idea might have some strong merit, but I`m asking questions that will draw out the strengths and weaknesses, to see whether it`s worthwile going deeper into the idea. :-) Okay?

I think that the main draw of my service would be that I could look closely and spot deals that an automated program like Google Shopping cannot. I believe I can save my customers more money than Google Shopping can, and if I can show that I think my business could do well. Also, I would be able to provide 3-5 specific listings to the costumer, instead of overwhelming lists of information.

My target audience would be parents shopping for their kids, as well as seniors. In my experience many parents don`t have the time to look beyond retail stores, and that is where I could save them money as well as getting them the best product. Many seniors aren`t technically savvy, however some of them are interested in having mp3 players or a new computer.

So far, I have thought about putting flyer`s up in my neighborhood to gain some sort of idea in terms of how popular it could be, and who is interested. Maybe some sort of "first 100 free" offer in order to start some word of mouth advertisement. I am in the process of creating my business plan, as well as a form for my customers. The idea is that all they would do is fill out a quick and easy form, and then a few days later they would be presented with options that are below retail.

I think that when I have website, for I don`t think I`ll have one in the beginning, it will be simple but will also offer incentives in the forms of prizes and free of charge services to returning customers.

Hmm...I`ve been pondering this, and the more you explain it, the more I think you may have a really strong idea.

I used to sell home electronics for Penney`s, and repeatedly saw exactly the kind of thing you`re discussing. Now, with the explosion of technology and competing formats, it`s almost impossible for someone to "surprise" their kids with an item the kid actually likes.

If you build this around your age, I think you might be on to something really strong. The approach would be that you know what kids your age "wish" they had for gifts. Then you`d back it up with a set of credentials demonstrating your expertise in the specific areas of games, music players, and so forth. You would keep your ear to the ground for new fads, trends, and up-and-coming "cool" items.

The next thing would be to build a solid portfolio of testimonials. As often as you have a job, you`d try hard to get a letter or email of recommendation from your customers. The more the better.

Focus on older people with kids---grandparents would be fine, too. The sales pitch would be that they could get a shopping list from their kids, but "where`s the fun in that?" And yet, the stress and anxiety of getting "the wrong thing" is what drives the shopping list. Hence, utter lack of surprise, which is a large component of a gift-giving experience.

If you can pull this together along the lines of "return the fun of a gift nobody wants to return," then I think it`d be an excellent idea. Your pricing would work, in the above outline, and you could likely even start hiring some help around the holiday seasons. You would be the controlling "bond," so that nobody but you would handle actual money.

That`d be the hardest part of it all...getting paid. People likely wouldn`t give you the money to make the purchase, except in some cases. So you`d be giving them a recommendation, and you`d have to bill them at the time of the "report." You could offer a satisfaction guarantee that if the recipient returns the gift because they don`t like it, you might do something....I dunno...return your fee?

I think your right, in that the money part/guarantee would be the hardest to pull off. However, I think I could solve that problem by offering a full refund if the gift ended up being returned, and maybe my service free of charge? I still have to think about it, and I`m in the process of writing a business plan. Do you think that I could possibly be paid before I started working? That would guarantee that I got my money, however, I could refund if the gift ended up being returned. And yet, it could look like scam. What do you think about advertising? I`m fairly new to starting and running businesses, so any help on that front would be great. Thanks.

One common formula would be to draw up a simple contract, with half your fee as a retainer, the other half due upon delivery of your report. In fact, you might offer as your satisfaction guarantee, that in the event the item is returned, you might return half your fee. There are a number of different models for this, and they all tend to fall into the "consulting" arena. Take a look at how interior decorators set up their contracts and fee schedules---or another one, "home stagers."

Here`s a topic that got into the whole concept of home staging, and you may find it helpful.