ForumsAdvertising, Sales and Marketing

Hello David,

Yes we are trying to market our products everywhere with no cost or limited cost.

My wife use quickbook for our business, so we keep track when she has the time. I use Excel to track our stock and statistics, we more than double our gross revenue since last year, because I am working hard to be visible on internet and spend money on advertising when it is possible.

The two first years all our benefits went back in our business for products and advertising. Now we've got an idea of what the people are looking for, but choosing new products are always a big risk for us, as we don't know if they will be popular or not.

LOL nightmare product management that's very true.

Drop shipping could be interesting, but not all our vendors do that, and once again margin is 10% which will not cover our e-commerce functioning cost.

I will not say net profit, but something between gross revenues and net profit (what you've got left after you paid products and functioning cost)

10% - is the your complete margin or is that your adjusted profit margin after expenses?

As for as "being" profitable i believe its all down to managing cost of sale vs profit for each sale. If you can create a balance of that which leaves you revenue/earnings then you are successfull.

For example i can sell fewer tvs working with select vendors but make more money than trying to sell a bunch of tvs at lower costs.

Sell 1 Toshiba HDTV = 200.00 profit (usually costs 100 bucks in advertising)
Sell 10 Toshiba HDTV = 250.00 profit (more sales = lower cost)
Sell 10 "Floored" Toshiba HDTVs then my profit is 350.00. "Flooring" is basically net30-120 where a company busy the asset and you sell it and pay the difference to the flooring company within the alotted period. Toshiba sponsors flooring and sometimes throws in 2500.00 advertising incentives so that covers my 100.00 per tv cost and then some.

So i guess my answer is it varies and work with your vendors, distributors, wholesalers and core products to do arrangements that allow you to sell the most. Take advantage of flooring opportunities, mass purchase discounts and closeouts to offer the same to your customers.

10% if you drop ship isn't bad. Look on the flipside - How much do you save by drop shipping? I find that some of my items after i "pick, pack & ship" that drop shipping looks cheap.

How much are you getting boxes for? How much is your shipping pickup costing you? how much does your label machine run? how much toner are you using on labels? how much does bubble wrap/packing paper cost you? How much are you paying employees to ship a product?

I'd rather pay 3-5.00 per dropshipment on 10% margin than to manage the supply chain myself. Holding inventory is nice for core products and fast shipping items but if i sell accessories up the wazoo that take up lots of room or have complex package requirements due to size, shape or form then i'm actually saving money hirring (drop shippers) with the volume to do it. Some items the box ALONE costs me 5 bucks

advantages on both sides of the fence.. i'd say the biggest risk is being liable for drop shippers issues but on the inverse of that sometimes they have less error rates than a new/startup or small business. For example 1000 packages out of a fulfillment center may be a .003 error percent while an internal shipping process may be a 3% (3 errors vs 30)

Drop shipping is great for high price tags, so 10% on $1,700 Plasma TV is not the same with 10% on a lip balm stick at $2.95 lol.

Seriously drop shipping involve a total confidence between the vendor and the retailer.

Bigger stores than us don't deal with orders less than $30. Even if that cost us a little I think, someone can test us, or it could be a kid with not a lot money, that's why in our store we accept small orders.To be honest with you there is no big or small customers for me, there is a customer and we provide the same service, except giving away free shipping or free products for higher orders but I think it is normal to do that.

We try to reduce the cost of packaging but we don't have a lot of choice. We don't pay employees, but we are working 7 days a week, because we want our customers to have their orders as soon as possible, that's the plus to buy to our store and to have our stock.

I think both are good, own stock or drop shipping depends on the field we are working.