The Wholesale Forums

[Anthony]

Posted by willhof

At least ten people join Thewholesaleforums everyday - many of them complete novices looking to earn a 'few bob'. Of those ten people, around half will want to deal in Branded Electronics (Nintendo Wiis, Playstations, Ipods and Iphones etc.)

Many people (myself included) have asked themselves why - Why would you want to in Ipods, Games Consoles etc. when the market is so saturated ? The answer is surprisingly simple: Branded Electronics are the products that everyone wants. Few modern children entertain themselves by reading or playing board games. The vast majority spend their time watching T.V or playing their games consoles. Most children will have at least one console - many will have more.

The Nintendo Wii was by the far the most popular Christmas present for children under 16. One in five children received an Nintendo Wii. Wii's sold up for up to £3000 on Ebay. This was more than 16x the RRP of £179.99. Ebay records all keywords entered into its search box. These are categorised and the most popular make their way into Ebay Pulse. Ebay Pulse records the Top Ten keywords entered into Ebay's searchbox. For the best part of a year the Nintendo Wii has been at the top of Ebay Pulse. (http://pulse.ebay.co.uk/. Notice the top 6 searches are games consoles/Ipods.)

You may now be thinking: 'Wow, if Branded Electronics are that popular, I can easily make a living out of them.' This is a popular misconception. New sellers will struggle to make anything more than 5% on branded electronics; Many will make much less. Few wholesalers will make a living through exclusively selling branded electronics. Even major supermarkets only make around 15-20% on Consoles/Ipods and many of them will be buying them in the thousands.

A warning: 95% of Chinese Scammers will be offering branded electronics. China has no authorised games console wholesalers - all Chinese 'suppliers' offering consoles, Iphones and branded mobile phones will be scammers who will not send you any goods you purchase.

If you were to approach a wholesaler and ask for a quote for ten Nintendo Wii's, you would probably receive an Invoice for £1800 - which is around the RRP. You may then choose to sell them on Ebay. If you are lucky, they may sell for £185.00 each. This is a profit of £50 for an output of £1800. You have made around 2.5%.

Instead, you could spend your £1800 on the wide variety of gadgets, CCTV equipment and other highly profitable products sold on the forum and by other wholesalers. A real life example would be the Satellite Navigation systems currently being sold by Greedyboy (Dean). If you were to buy the price would be around £410 (or £82 each) including delivery and taxes. These systems sell for £109 + delivery on Amazon and sell for similar prices on Ebay. You could easily make a £25 on each of these systems. That's a £125 profit on a purchase of £410; believe me, this is pretty darn good.

My advice to new sellers is simple. Find a niche market - preferably a niche market which you are knowledgable about. It also helps to stick to products where your mark-ups are 15% or more. The above rule applies especially when selling products with a market value of £100 or less. You need to think outside the box; creative ideas can make you a lot of money!

My last and most important piece of advice is to stay well away from branded electronics.

[Anthony]

Posted by Pete.

After years on the web visiting forum after forum and reading tales of woe from people who had spent thousands of dollars for shopping carts and designer websites, only to have them produce little or no sales I decided to do what I could to help out these newbies to online retailing.

I had never given much thought to going into the web hosting business. It certainly wasn't something that was in my business plan. But the opportunity came up and I acted more by emotion than by strategic planning. I was involved with a group of people selling products from a particular dropshipper. The dropshipper also offered "e-commerce websites" in the range of $ 2000. (Plus healthy update fees.)

These were moms and pops and grandmas investing their savings and seeing them go down the drain. The products were good, I was selling tens of thousands of dollars worth of the products. It wasn't that the goods would not sell, it was that the people were basically told they could throw money out and sit back and reel in the profits from the net. (Bet you never heard that before.)

So, I got hooked up with a hosting provider as a "reseller". This particular server company offered "lifetime hosting" and "unlimited bandwidth" at very reasonable prices. So, I signed on. I started telling my forum mates that they could buy a good sized server space for $ 120 and own it forever. I even set up terms for those who wanted to pay as they go. Then I offered to build them shopping cart sites for from $ 25 to $ 100, depending on how much work I did and how much they did.

I had a couple of dozen sign up in short order. I was building sites for a month or more. Rolling right along. BUT, they weren't selling anything. Over a year later they are still not selling anything. Some will not average a sale a month. I still feel sorry for them. Many of the ones on the payment plan have just quit paying. Others pay each month, but hardly make any sales. They are still thinking about "put up a website and they will come."

They were trying both wholesale and retail type sites, some have a site for each. Don't get me wrong, a few have done well. And some are at least picking up some pocket change.

The same is true on this forum. Many members here have had me set them up with hosting. Some start selling within a few days. Others make the monthly payment of less than $ 6 and leave after a month, or two or three. Easily 25% give up within three or four months. I don't feel near as badly in these cases, because the initial investment is so low. But, even then I regret that they expect to "own a website" and have money coming in.

It just doesn't work that way. It's not the site, it's not the type of cart, it's not PayPal or anything else along those lines. It usually comes down to expecting the place to run itself. An online store requires time and devotion, just as any brick and mortar small business does. There are new items to add, promotions to run, prices to change. And where most fail - advertising to be done.

I didn't start this article to discuss search engine optimization, pay-per-click advertising or other ways to promote an online store. There are a number of ways to do it, but the bottom line is they must be done. Not just throwing money at it, either. Testing, shifting, trial and error all play a part. Of course, much of this can take some money. A lot more than paying $ 5.99 per month. And it can take a lot of time. Charting results, moving things around, re-wording text, spotlighting different products.

Of course, product and pricing do play a part. In the case of the first group I mentioned I had myself as a control. I knew I could sell the identical products from my websites and have a good income. So, I knew it was not the products themselves. And since the people with the sites are selling everywhere from full suggested retail to one-half off, it's not prices. They just are not getting Qualified Prospects to their online stores.

With forum members here, I can't say how their prices compare, they are selling a variety of products, so there is no real comparison. But I do know some are happy with the results coming from their shopping cart sites, while others are just languishing with just a couple of items added, with no promotional activity, just waiting for the world to find them. These last will soon cancel their hosting and move on to something else that doesn't work, either. (I wonder why?)

Why am I writing this? Why tell you that a quarter or more of the folks from this forum who have had me set up a cart for them have given up?

I'll tell you why! So many more of you don't do the same thing!

I love helping people get started in business. When I had my auto parts business for 20 years I had six of my employees leave to open their own businesses in competition to me. In the same towns. Trying to steal my customers. (I'd give them the ones who did not pay their bills or bounced checks.) Most of them I even helped out. So, simply helping people get started in their own business is high on my list of reasons.

But taking money for nothing is not something I'm comfortable doing. I'm sorry when someone pays me for several months hosting and their site looks the same as the day it was installed. It bothers me that they spend a few days adding inventory and feel that they have done all they can do and wait for the money to come rolling in.

Stop and think about owning a real shop. You've got to put up a sign, you've got to display your goods, you've got to have an attractive front window, you've got to sweep the floors, clean the glass. You must also shift your goods around, run specials on what's not moving, rearrange to suit the seasons and more. And hopefully, carry some money to the bank.

Well, it's the same with an online store. It's not "set it and forget it."

If you're not willing to make a commitment to really work at your online shop as you would a brick and mortar shop, don't bother trying. Whether you get a cart from me, some of the others here on the forum, Yahoo, whoever, if you are not planning on spending some steady, serious time working on that cart, you are just wasting your money from the start.

There definitely is some wealth to be made on the Internet, but it isn't coming to those sitting at the kitchen table in their underwear reading the daily paper. Or those with a "real job" who think adding some inventory to a cart one time and forgetting about it is going to let them quit that day job anytime soon.

[Anthony]

Posted by Sashas Jewels

In the modern age of technology we live in, it is being established that you can run a successful advertising and marketing campaign for your business using one of the many social networking websites.

What is a social networking site and how does the advertising campaign work?

Two examples of social networking sites are “Myspace” and “Facebook”

These social networking sites were innovative ideas and originally designed so that anyone could have their own little piece of the internet where they could post pictures, write blogs and keep in touch with family and friends.

Many companies are now using these sites to create company profiles advertising their good’s, they add “friends” at random in the hope of building up a network of potential clientele.

I personally have used both Myspace and Facebook to generate sales leads and can speak of the success in marketing your products in this way.

Take a look at these two links on Myspace to get an idea of the types of profiles that businesses are creating:-

http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendid=776 57554
http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile&friendID=141 867073

Notice the amount of “friends” they have, these are not genuine friends but acquaintances they have added at random that present a possible business alliance.

Not only can you design a jazzy profile on Myspace with slideshows and pictures of products to promote them but you can write blogs and post bulletins, which creates a “real time” update to your potential customers. A bulletin is simply a message that gets sent to all of your "friends" which is on a bulletin board on their personal profile dashboard.

Some html knowledge to use Myspace is a bonus when building a profile but it’s not a necessity.

Facebook is a little more complex to use and as a general rule you have to be a member to view profiles, groups and pages.

Firstly a profile is created and then you can create groups and pages to market your products. I’ve posted a link below to a user that has created a group however you will need to be a member to view this one.

http://www.facebook.com/group.php?gid=8608172181

The facebook user then adds friends to their profile and sends an invite to join the group. From there they can post bulletins, there is a discussion board and they can bulk email updates to members.

A page is similar to that of a group however “friends” are asked to become a fan, below is an example of a page created.

http://www.facebook.com/pages/Epiphone-Guitars-30-Buy-at-Wholesale-prices/30037680056?ref=s

These are just two examples of the many social networking sites out there at the moment, others include, bebo, WAYN and Friendster, in fact there are over 350 social networking sites on the world wide web.

Remember it doesn’t have to be a physical product you are trying to promote, it can be a wholesale list or a service such as web design, have a browse of the “friends” on the links above to see more profiles and you will see that it’s simply an open opportunity to have another piece of the web to promote whatever it is that you sell.

Thank you

[Anthony]

Posted by geosamm

When you consider setting up your own domain it may be helpful to consider the following.

Try to select a domain name that stands out but is easy to remember, if possible try to keep some connection between the name and the products or services you offer. (Although this is not essential).

Try to avoid off the shelf template style content, everyone uses them and they are frankly boring. Yes they are the cheapest option and the easiest to find but consider how will yours stand out hidden within the millions of others.

Keep the colouring as simple and pleasing to the eye as possible. Bright and garish colours offend the eye and visitors soon switch them off.

Always give a full and complete description of the products.

Give the visitors a clear product photo, cluttered backgrounds look messy and unprofessional and often create the impression of shoddiness.

Make the home page attractive and interesting, that's the visitors first impression of you and your business.

Be sure the site flows through instead of the stop start return to homepage type that makes the shopper travel backwards to go forward.

Make sure all the buttons and links work before you post it.

Make sure it will open in all browsers and on all operating systems.

Give all the information to the shopper. Imagine you were a visitor and ask yourself the questions they will ask and answer them before they need to.

Check your spelling and get someone to proof read the content.

Get the site translated and offer access in different languages.

Have clear policies for returns damages etc etc.

Try to avoid customers having to leave your site, for any reason.

If you include sound, select something that is acceptable to all and give the option to switch it off, nothing worse than being forced to listen to Cher when your a Hendrix fan.

Remember you are not building the site for you based on what you like.
Make everything as easy and accessible as possible.

Make it enjoyable and entertaining to visit your site and encourage your visitors to be a part of it.

The above is not meant to be an exhaustive list of do's and don'ts just an over simplistic view of what people forget to remember.

[greedyboy]

DEALING WITH THE CHINESE

There is a popular misconception that a majority of Chinese sellers are scammers. I am going to try and expel this myth with my experience and my little knowledge. I do not claim to be an expert on international trade but I can share my experiences and hope some of this information will of help to someone out there!

THE GOOD OLD DAYS

This makes me sound old! I am probably not much older or younger than most users here. Now in these good old days there was no internet as such, that came a few years later. You would do all your business by phone, a fax machine and a (borrowed in my case) Global Sources publication which back then really was a bible. Some people really do not know how lucky they are now, you have everything at the end of your broadband connection!

With a little bit of courage I started importing at a young age from my bedroom in my parent house. My very first product was a mobile phone battery. Not an ordinary one though. It was a NiCad battery (all batteries were NiCad 12 years ago). NiCad batteries suffered from ‘Memory Effect’ whereby the more you charged them the less charge they held between charging cycles.

This battery I found had a built-in discharger! But not only that, it also had a ‘test button’ which when pressed would light up a series of LED’s which would let you know how much charge was remaining. The standby was also increased as they were rated at 1800mah instead of the usual 800 – 1200 mah.

To cut a long story short. I blagged 30 batteries from a Taiwanese factory (MOQ 1000pcs per model) launched them into the UK and sold them retail/wholesale (as I was in that business at the time). I got quite a lot of exposure thanks to my marketing abilities and they even were awarded ‘What Cellphone Award of Excellence’ (a mobile magazine at the time).

I went on to import and sell many of these and ultimately handed the product over to a big distributor, but to my peril I only earned 10% of what I should have due to my own fault and little knowlwdge of distruting agreements. However they went bust in a big way about 7 years ago (people in the mobile industry will know who there were) so that was a small consolation.

Updated: A quick search and I'm amazed I found a copy of the actual published review from 1996!

WHY TAIWAN AND NOT CHINA?

It was not uncommon at that time as anything technology/electrical/computer related was produced in Taiwan as the Chinese were famous for poor quality elecronics (to my knowledge plastic and textile products was their speciality at that time).

To get round this and to increase credability many Chinese factories manufactured electronics, shiped the components to Taiwan and assembled them in a third party factory just so they could put ‘Made in Taiwan on them! You still will find much higher quality electronics in Taiwan to this day, but China will offer a similar product cheaper. You make the choice!

CHINESE BUSINESS MEN/WOMEN

They are not all scammers. You build a working relationship with one and you have a friend for life. I personally have visited factories and the owner or senior manager would put me up in his own house with his family. They are offended if you stay in a hotel. Now tell me they are scammers? If you could smoke on flights I would visit China more regular .

Fortunately I am now in a position where I have people in China who can audit new suppliers by visiting factories and send me back a report a few days later. Only last Saturday (26 May) I had an audit arranged on a new factory and will publish some the actual photographs taken (for confidential reasons I can not post the actual report).

HOW IT WORKS

As my experince tends to be involved around consumer electronics my experience is that you have 4 types of supplier in China. The factory, the trader, the broker and the scammer. Obviously you are best to deal with a factory. The higher up the food chain the better your chances of lasting. Tip: the higher the MOQ (1000pcs is not uncommon) usually the better quality the item produced.

FACTORIES: Factories (or could be classed a s a manufacturer) produce the final product and normally have a strict MOQ of 100/500/1000pcs of each item.

Although they are a factory/manufacturer they do not necessary produce all the components. It is very common they at least they will produce the main circuit boards using a SMT Machine (Surface Mount Technology). Even the main electronics could have been designed by someone else and they just replicate it (sometimes under licensce and sometimes not!).

They have rows upon rows of production lines where humans assemble every part until you have the finished packaged product. Much the same way cars are manufactured. Usually, cases and other plastic parts will be bought in from a case manufacturer. Stickers will be purchased from a printer. The packaging will be bought from another printer and so on. The bigger the factory, the more components they produce in-house.

You will have noticed this with generic MP3 players for exmple. They tend to look all the same because the factories have all purchased the casing from another factory that just produces plastic components. To make a simple plastic MP3 player casing can cost £20,000 or more just in development and tooling (essentially the mould to make the cases from) design and CAD costs and that is before you have actually produces a single platic case or component!

So to keep costs down, the factories buy cases and other plastic components in from another factory for a few cents each. A saving upwards of US$250,000 on injection moulding machines, staff, design tools and tooling costs.

TRADERS: Tend to deal in much lower MOQ 100pcs is common and tends to be more flexable. They will either purchase 1000pcs from the factory and then break them up into smaller MOQ. This is not a bad thing as they will physically house their stock. Be aware that a lot of traders pretend to be a factory and will display photos of a production line and certificates on their website etc.

BROKERS: Will not hold any stock and will purchase as per your order, sometimes gambling using your money. The same applies, they may pretend to be a factory also.

SCAMMERS: Goodbye money! Yes there are scammers in China. Do you realise when you T/T US $1800 to a person you have never met before that is the equivalent to a YEARS SALARY to the average Chinese factory worker!?!? Can you imagine someone T/Ting you £20K? It amounts to the same thing! Becareful, no one is safe. I admit I have lost a few dollars over the years, but to-date they have only been a small amount 'gamble money' as I had a feeling something was not right. Gut feeling accounts for a lot in suppliers, buying and selling.

THINK OUTSIDE OF THE BOX - USE CHINA TO YOUR ADVANTAGE

At the time of my first international experience I had a much older friend who owned a massive mail order computer business. He had been importing for years. One of his greatest achievements in my opinion was a mouse. What he did was pure genius.

He went to a Chinese manufacturer, bought a basic 50p mouse, put his logo/brand on it, bundled it with some OEM paint programs, put it in a very well designed and attractive packaging all for around £3.00. They were sold into distributors and ultimately could be bought in Dixons, Argos or any other high street retailer for £34.99. To me personally, that is what importing from China is about, not looking for branded electronics and trying to squeeze 10% margin!!!!

Tip 1: If you wish to sell electronics directly to retailers they expect to work on a 40% margin.

Tip 2: If you wish to sell directly to big retailers/high street you will have to sell to a distributor who supplies the big retailers. They expect to work on a 20% margin.

Tip 3: When working out Retail prices remember they will include VAT @ 17.5% so work backwards when establishing your lowest selling price.

PICTURES FROM A REAL FACTORY

As mentioned earlier in this article, I recently had our China based agents perform a Factory Audit on potential manufacturer in Shenzhen. This is a typical 'larger' style factory which would have a MOQ of 1000+ pcs of each item and mass produce electrical items and of a high standard. So much so, well known brand name products you would find in the high street would be manufactured here on an OEM basis.

I hope these photographs give you an idea of what and where your products are made:

Links to the other photographs:
Reception and Showroom

Production Line(s)

SMT Machine Room (Surface Mount Technology)

RoHS Tesing Machine

Vibration Testing Machine


Salt Spray Testing Machine

Age Test Room & Age Test Room 2

Also a big thank you to Anthony for hosting these pics!

[cbeebies]

Finding the right supplier in China is a key ingredient of successful buying from China.

Whether you meet your supplier from the trade show, find its contact from magazine, or searched its information from B2B platform, working with different suppliers makes the difference between success and failure.

Fraud, quality problem, false certification, un-punctual delivery, communication barrier, intellect piracy … Chinese suppliers are known by many bad reputations, but China still holds the “World Factory” name of USD969 billion export in 2007, increased 28% than the year before. Actually, buying from China is challenging. You may get big profit from importing and selling goods from China, or you may lose all your money. But unless you learn to manage and control the risk, it can keep you from trading successfully.

As a Chinese woman who has been working in international trade and sourcing field for 11 years, I’m going to share with you some tips from my perspective:

1. Know the product. Become familiar with the product you’re going to buy from China. The material, specification, packing, testing method, H.S. No. and relevant import compliance regulations beforehand. You are the expert of your buying product, not someone else. Never go for the brand name products. Most people get scammed because of trying to buy brand name products from China to make quick bucks, but end of receiving fakes or nothing.

2. Know the manufacturing place. If possible, get some knowledge of the Chinese manufacturing place. Some places are known for something. Like Yiwu, the largest small commodities market in China, even in the world; Shenzhen, City of Electronic Products in China; Yongkang, City of Hardwares in China; Anpin, World Wire Mesh County; Cengzhou, World Tie City; Xiamen, City of Marble/Granite/Stones in China; Haiyan, City of Fastener in China; Yunhe, City of Wooden Toys in China; Shangyu, City of Umbrella in China; Shishi, City of Jacket in China; Liuyang, City of Fireworks in China; Lecong, City of Furniture in China... It's easier to find a right supplier when you know the correct direction.

3. Basic checking on your potential suppliers. Every Chinese company has a registered No. Get your Chinese supplier’s name in Chinese, go to the website of local Industrial & Commercial Bureau to find the basic company information if you read Chinese, or get the credit report from an unbiased service company. Google its name and contacts on internet will help you sort out the scammers. Pick up the phone, call the supplier’s office line instead of mobile phone, and see if the contact is valid. Then, send out your inquiries.


4. Due Diligence. Contact the potential suppliers and visit them if possible, either by yourself or ask an independent 3rd agent like us to help. Certification, MOQ, packing, price, communication ability, response time, payment term, lead time, references, etc. Is your supplier a trading company or factory? Do they export by themselves or through an import/export company? Make a judgment from combining the quality system, price, lead time, R & D abilities, management, technology and capability. Don’t fall for “the bigger, the stronger, is the better”; instead, choosing equal size and scale is well matched. This is especially true for the start-up companies to work with some not so big but with great potential suppliers. You need to calculate your landed cost and work with the supplier who undertakes to facilitate quality management system instead of just FOB price. Also, when your company grows, the old suppliers may not meet your requirements anymore, and you need to bravely choose another supplier.

5. Sample evaluation. You need to order samples from different potential suppliers. Be prepared to pay for the sample fees if the supplier asked. Asking a Chinese agent to help you collect all the samples and send you together can help you save a lot of freight cost. After received the samples, evaluate it either by yourself or through an official test lab.

6. Place an order Place a trial order with your selected supplier through a written purchase order. In the purchase order, be sure to include a detailed description of the products, trade terms, payment method, quality standard, a list of all necessary shipping documents, and penalty on delayed shipment. If you're trying to land a shipment for less than USD3000 directly from a Chinese factory, you're probably not at a volume that is worth importing and are better off working through wholesalers in your country.

7. Use a secure payment method L/C, PayPal, T/T 30% in advance as deposit; wire the 70% balance once received a copy of B/L. Never send out money by west union or MoneyGram to someone you know nothing. Or, your money has gone.

8. Pre-shipment inspection When the goods are ready, check on site either by yourself or appoint an independent 3rd party to check for you. Make sure that your supplier knows your checking criteria in advance. This will avoid a conflict of quality and reduce the chance of receiving defective or non-conforming products.

9. Shipping advice. To guarantee the goods will arrive on time, ask your Chinese supplier to send you the shipping advice including all the shipping documents like a copy of B/L, ETD, ETA info, invoice, packing list, etc. immediately once the goods left China port. You can trace the shipment by yourself or ask your freight forwarder or customs broker to take care of the transportation and customs clearance. Asking a detailed breakdown list of all the costs and regulations for importing the goods into county will help you get ready for the hidden costs of customs and shipping.

10. Gain experience. Experience builds business sensitivity, which is a key to be success. Many people find that they can spot a scam more quickly and locate a right supplier more easily after each time they imported from China.

Buying from China is more complicated than you purchasing domestically. But don’t get intimidated. Get out of your comfort zone, go visit China. Talking with your Chinese supplier face to face, visiting the factory facility will help you foster a mutual, long term business relationship. And work with dedicated Chinese partner will make your business of buying from China much easier!