Important decision for my business

Discussion in 'Growing and Managing a Business' started by smashrc, Jun 21, 2011.

  1. smashrc

    smashrc
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    I have been running an online business for 7 years. Started at home, now have 15 employees and distribute many brands name.You can say my business is a buying and selling business. And the profit of doing buy and sell is very limited, just like 10%. So, I'm kind of hopeless to expend my business for only doing buy and sell.
    Started this year, I have been working with many manufactures on producing my own brand of products. By doing this I can sell my product with a few 100 % of profit. I think this is the only way to go if I want to expend the business. Now comes a big decision to make. Which selling method should I go?

    1. The usual way. manufacture sell to distributors then to retailers
    Good:
    Less trouble on handling end user
    Easier to promote
    Know more people in the same sector


    Bad:
    Less profit


    2. Using my online store to sell direct to end user.
    Good:
    Boost up the sales of my web for other products
    More profit

    Bad
    More trouble on handling end user
    Leak of promotion
     
  2. Fergal

    Fergal
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    smashrc well done on growing your business to the size it is today, that really is a great achievement, congratulations.

    The way you decide to sell your own product range will be at least partly dependent on the resources you have available to you. You say that selling through your own website will be more profitable but will result in more resource being allocated to customer service. If you have that resource or can provide it, it would seem to be well worth your while to sell in this way, especially as you already have the website up and running and generating sales. If you are already providing customer support for the other products you sell, it should not be difficult to start providing it for your own product.

    Is there any reason why you can't use both methods, in order to maximise your sales, i.e. sell through resellers (distributors & retailers) and through your own online store?
     
  3. sigma

    sigma
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    Why dint you go for both? I can see now those manufacturer are going both way, they sell to distributor and also end user. The price or saying margin is low per unit if you sell to distributor but the total profit per transaction is high. For the end user, per unit price can be higher.

    You are having advantage since you already have some customer and familiar with the buy and sell business. You can try go both way. If you found one of them are not worth, then only you might consider to stick on only one of them
     
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  4. Axelcary

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    online store, you can even sell electonic good, if you deliver free shipping you will get more orders in online.
     
  5. mvh

    mvh
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    I agree with sigma, distribute the products through retail and the online store at the same retail price.
    You profit margin will be less via the retail channel, but you will have a bigger market presence.

    If you are still hesitant about what route to take, maybe pilot the product via the website (since the existing infrastructure is already in place (staff/customer base etc)) and then use the track record to demonstrate to retailers the success of the products.
     
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