Forums: Discussions for entrepreneurs and small business.

I was reading a story on a couple websites that were very successful by using there capital on developing there website and ad and marketing campaigns rather than purchasing product. Just curious how many members think this practice of purchasing product after your customers have purchased from your website is an acceptable way of doing business.

The product line is cell phone accessories. I would be taking orders via the internet without having product on supply. When the sale is final I would be using my customers money and purchasing the products from my supplier. I would not be letting my customers know my distribution methods but I would let my customers aware of my shipping policies.

This model is do-able but be aware of a few potential problems:

• You may not be able to take advantage of volume discounts if you constantly place back-to-back orders
• Will your image be harmed if suddenly a product you offer is no longer available from your supplier?
• As your business grows it can be more efficient to maintain at least some inventory

You are essentially a middleman as you have described the business in your post.  As long as you serve a particular niche well you will be fine. But if you are reselling product that can be found in multiple venues your chances of survival long term will be tough.

All the best,

Matt

• if a product is offered elsewhere - online or nearby (bricks and mortar store)
• if the pricing is competitive
• if they are willing to wait to receive the product

~Roland

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