Te first "money maker" was a great success, and I decided to do it again, a little later. However, as I was no longer a boarder I did not have the large desperate target market, and I was having to compete with the high street availability. This was uch more difficult. I decided instead to try and diversify.
Then I managed to obtain a major break in my product sourcing, as there was a large wholesaler on an industrial park is located not to far from where I live. I needed an account to buy from there regularly; but I managed to buy a fair amount of stuff without a full account, I used a guest account instead.
The wholesale prices meant that even if I added VAT onto the prices (which I had to because I wasn't VAT registered) were a fair bit cheaper than buying them retail and selling them on. Because of this I actually managed to find some unique product that were not available in any other local shops, but I had an idea might be quite popular.
I took advice on my first purchases from a couple of friends, meaning that I got a good variety that should please most confectionery palettes; however I saw a good deal on an own brand energy drinks, which meant that I could make more than 13 pence per can, even if I sold them at the retail price of 35 pence! I thought this deal is too good to miss, so I bought quite a lot, approximately 200-250 cans. They looked like this:
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| Energy Drinks I bought |
I also bought some other sugary treats, including Haribo bags:
Despite the competition that I had from the high street I still managed to turn over a large amount, and I made a about a hundred quid in cash! I do still have the account records, and could reveal exactly how much I made, but I would have to type it all up, then calculate it. Quite frankly it would just take to long.
I also found out that the massive amount of energy drinks that I purchased was a large mistake. I focused too much on the price that I could get them for, and not the demand for them. I actually found that there is an equal need to look at the product as well as the market, or you will get lumbered with stock that is not worth anything.
Well, that's not totally true. It is only worth noting to you, because you cannot sell it to gain the profit you want.
So I had all these energy drinks, so I tried to get rid of them through a special offer. One for 35p or two for 60p I got rid of a lot more of them because of this, but I was still left with 100 or so which was what took most of my profit. In other words the profit I made, was a load of cans and a bit of cash.
I also applied this to the other sugary treat to encourage mass buying so that I would sell more, even if it was at a slightly reduced profit margin. So from this I learned about marketing and pricing strategies at their most basic, and managed to apply them to the enterprise that I had started and successful run.
So, at the end of it all, what is there it to learn? Well, if I had known about the wholesaler from the start I could have made a lot more money, so it pays to look and shop around.
I also learned that giving "offers" or "deals" that encourage the purchase of multiple units are an excellent way to get your stock selling and creating capital, rather than leaving it stuck in your inventory.
Well, until next week . . .
Thanks for reading!
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