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Starting a £1 Shop Online ??

Discussion in 'E-Commerce and Online Selling' started by adam2007, Nov 16, 2007.

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  1. cunning plan

    cunning plan

    Joined:
    Mar 29, 2006
    Messages:
    75
    I said ONLINE pound store you bunch of nit pickers..
























    Sorry.. Couldnt resist.. :D
  2. poundcoin

    poundcoin

    Joined:
    Oct 27, 2006
    Messages:
    9
    Don't want to inflame this thread again too much but often I get asked about start up costs of a pound shop or discount store.The following rough figures are for a bricks and mortar retail shop ,not an online store.

    I have run a retail high street store for a number of years and find that most of my sales come from regular repeat sales...week after week the same lines keep selling.
    Unfortunately these lines are not available at anything like the margins quoted earlier.Some branded toiletry lines we work on as little as 18% profit.
    This means that on a £1 line we may only make 15p profit.
    I admit that on some "job" lines you can make higher margins and also if you can take containers direct from China you could make huge margins but it is very hit and miss.Those great margins can soon be diminished by those bad lines that don't sell at any price.Continuity could be a problem.


    IF YOU WERE TO USE THIS EXAMPLE AND ASSUMING YOU
    WORKED ON A LOW PROFIT MARGIN OF 25% (AND NEEDED A MINIMUM OF £15000 TO LIVE ON) AND EMPLOYED A COUPLE OF PART TIMERS.
    YOUR TOTAL YEARLY COSTS:

    rent £12000
    rates £5000
    drawings £15000
    wages £10000
    electric £1500
    tel £600
    insurance £1000
    motor £2000
    bank charges £1500
    repairs £1400
    ------------
    total costs = £50,000

    THEREFORE YOU WOULD NEED TO TAKE:
    50000 (total yearly costs)
    DIVIDED BY 25 (percent
    profit)
    MULTIPLIED BY 100

    = £200,000
    PLUS VAT @17.5%
    =£235000 PER YEAR.
    (£4519 inc vat per week).

    £750 per day over 6 days

    This is assuming you are using cash to start up....if
    you have to borrow money and have to pay back a loan
    this will need to be added in to your costs....meaning
    you will have to take more to cover the repayments.

    If I can find something I wrote once with regard to setting up an online £1 shop I will post it....but basically to make a reasonable living you would have to be continually wrapping and posting goods all day long !
  3. poundcoin

    poundcoin

    Joined:
    Oct 27, 2006
    Messages:
    9
    Found the piece I previously wrote to someone who had the idea of an online £1 store :


    .............The internet is right for some items and not others.

    Maybe if you spent £1000s on a good shopping site and
    £1000s more promoting it ,it may pay off....but it
    would be a huge gamble.

    The problem is that the margins are too tight and it
    it is difficult to find items that are good value and
    yet light-weight for posting......the most popular
    items that we retail in our high street store for £1
    would probably cost more in postage than the item
    itself and this tends to put people off.

    However as a business plan , just work the maths
    out....assuming no premises and you just wanted to pay
    yourself a minimum living wage of say £15000 per year at an
    average 25% margin you would need to sell:

    225 items per day (including vat)....(assuming a 6 day
    week....)

    assuming an 8 hour day that is approx 30 items an
    hour....

    If you paid someone else to help , this would go up to
    60 items an hour....

    with all this activity you need storage , so now we
    are up to :

    120 items per hour .........2 items every minute !

    I don't know if you could physically do it as well as
    reordering and receiving stock and dealing with the
    administration.

    For instance over the last 2 days I have received 4
    emails and replied 4 times to a lady who ended up
    buying 1 x tube of Moisturiser Cream at a total
    delivered cost of £1.50 !!!!....................

    ...............Sorry if I sound pessimistic and I know there are
    people that do well on the internet...but they are
    usually selling more expensive and more profitable
    items.
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