Sometimes not knowing is good
November 30th, 2007 by KenricI read and try to understand each and every comment. However, I do understand that if I wait and wait until I find a product or idea that fits in the text book criteria, I would be waiting forever. I know that my margins can be bigger, but if I never started due to that fact, I would be where I am today.
Sometimes it’s better to not know what you’re getting into. Because if you know all the pitfalls and potential problems, you may scare yourself from jumping in. There are countless real estate investors that became investors when left with an empty home. I’m sure many would say to themselves if they knew how much trouble renting a home was, they would have never done it.
I don’t know how many times on “The Big Break” on CNBC did the business person say “I had no idea what I was doing.” The one that comes to mind is the guy who started his own line of men’s skin care just because he didn’t like any of the ones he tried. Sometimes it takes someone who doesn’t know the “proper” method to come in and invent a new method.
Here’s an example of what happened yesterday. I got 4 identical orders for a product that is on backorder from my dropshipper. I needed to fill them ASAP so I started looking at competitors sites to see if anyone had them in stock. I found one on Ebay for a great price! I called the guy and asked if he had more. He told me he was the main supplier but he was waiting for them to come in from his manufacturer. Great, I found the top of the food chain, or so I thought. A few calls later and I was talking to the guy who actually makes the product. Now you can’t get better inventory information than that. He told me he was making these as fast as he can and that the next shipment was going out next week. However, he also has an exclusive agreement to sell to the guy on Ebay so I would have to buy from him.
So the Ebay guy is the top of the supply chain for this product. I know that if he doesn’t have inventory, nobody does. On top of all that, he dropships and his price is $20 cheaper than my dropshipper!
The reason I’m writing this is that I was warned that I shouldn’t rely on one dropshipper. I totally understand that reasoning. However, I felt that having one was enough to start with. I learn as I go. I would have never found this Ebay guy if I wasn’t searching everywhere for this one product. Who knows, another shortage may lead me to another supplier. My point is that sometimes you have to just do it. Start with the minimum and expand and grow.
Posted in Ebiz | 11 Comments »
Stumble it!
Are these items being made in China or another country? (Not many products are made in the USA anymore.) Assuming it is being made outside of the USA, did you actually speak to the factory or to the importer or exporter? Or did you speak to someone in the US who claimed to be the manufacturer?
Depending on your answer, I may tell you what happened to me when I purchased 1500 of something… once. It was a good/expensive learning experience on more than one level.
I’m glad you learned what a keystone price is. I usually multiply the price I am going to have to pay by 2.5 or 3, and if it makes sense, I’ll buy it. (I stock my own items, no dropshipper.) Without good margins, it makes it hard to run “real sales” and make a decent profit overall.
By ubu50 on Nov 30, 2007
This particular product is made here. I believe its made in California although I’m not 100% sure. I was speaking to the person who’s company made the product. The product is called the XYZ widget made by ABC. I was talking to ABC. The XYZ guy was the Ebay guy.
It’s very possible that the ABC company has workers in China making the product for them. Actually I am looking into doing just that.
I would love to hear you story about your 1500 item order.
By Kenric on Nov 30, 2007
Yes, please enlighten us. I find reading these posts very interesting. They apply to me, as I’m somewhat of an online investor. I freelance, so I don’t have the number of things to worry about as you do, but I do enjoy your blog.
By ninja.s on Nov 30, 2007
Keep up the good work buddy! I love ready about the E-Business stuff. Something I don’t have the time, know-how, or balls to get into myself.
One question for ya: your return policy. Do you have one and have you figured it into your cost.
Rootin’ for ya!
RealOG
By RealOG on Nov 30, 2007
Hey OG, I do have a return policy. 100% satisfaction guarantee. However, it can’t be used. I’ll work with my customers on making them happy.
By Kenric on Nov 30, 2007
I’m confused. Is XYZ the brand name? Or is it ABC? Or is this something like “Irish Spring Soap” made by “Dial Corporation”? When you got your sample, did you notice if it said “Made in China” or “Assembled in the USA”? It should have had a country of origin on it.
By ubu50 on Nov 30, 2007
XYZ and ABC are both brand names.
ABC actually makes products.
XYZ is another company that contracted ABC to make a specific product then is rebranded as XYZ.
My products don’t have any packaging on them. They arrive plain with just a packing slip from my company.
By Kenric on Nov 30, 2007
I agree that sometimes you are better off not knowing. There is a fine line between doing your due diligence and just jumping in and going for it. There is also the case of “paralysis by analysis”. If we wait till we think we know everything, the moment of opportunity will have passed. As long as you don’t make any devastating mistakes, learning as you go is fine.
By Allen Young on Nov 30, 2007
Ignorance is bliss. If you go into a new venture just focused on what the negative could be, you’re just going to see the negatives. You have to take a risk if you want to gain anything, and learning along the way is the best part. If you knew everything going in, then what would be the fun of it all?
By PHP eBook on Dec 1, 2007
Did you not search Ebay for all your items in the first place? It seems like perhaps that’s a good idea for competitive research.
I agree with you though, better to do something – even if you make mistakes than to do something. That is how you learn.
By Lazy Man and Money on Jan 9, 2008
Yes, I searched Ebay prior. Ebay will always have lower prices than online stores on items every once in a while. I don’t consider Ebay as competition. If I did, I wouldn’t be able to find anything to sell. This particular item is not always available on Ebay. It just happened to show up on my search that day.
By Kenric on Jan 9, 2008