The Hardest Part of Starting a Retail Business Is....

[CaelAidan]

... Finding merchandise at reasonable prices.

So, I did all the wonderful paperwork, federal and Virginia and county. Wonderful. Paperwork. (So much to read in legal jargon for tax things...) I've got my FEIN, my SCC ID, certificate for resale, set up all the taxes stuff, got the email, Facebook page, working on the website... If there was a T-shirt, I'd probably have it already. I know what I'm going to do, what I need to do to get there. I'm scouting retail locations, trade shows, prospecting online sales....

I just have one major, MAJOR, problem: I cannot seem to find reputable, reliable sources from which to procure merchandise. Google and I aren't friends right now. Wholesale, distributor, licensed goods... Everything I can think of to search just returns middlemen who offer no room for profit, or wholesale sites that sell items I would only consider if I ran a dollar store. What I'm doing requires licensed products, not dollar store knockoffs.

Yes, what I'm doing requires licensed items, not knockoffs.

Please let me know if you need more information. Thank you for your time in reading this, and any response is appreciated.

[Freelancier]

What kind of merchandise?

[Fulcrum]

That sounds about right for Google. I'll echo what Freelancier asked, what type of merchandise?

[turboguy]

Yes, what I'm doing requires licensed items, not knockoffs.



One of the things I have noticed is that when people as a question on a forum they are very vague about what they are doing. I am not sure if they are afraid someone will copy their great idea or if they are afraid people will tell them it won't work and they don't want to hear that. There are a lot of people willing to share a vast and diverse range of knowledge and experience on the forums but we don't have a lot of mind readers on this particular forum. I would guess that there is some kind of psychic forum somewhere. Please tell us more of what you plan to retail and perhaps we can help.

My only suggestion working from the vast darkness would be: are there trade shows for your industry? That might be a good source of suppliers. The only positive other thing I can share is that once you get started the suppliers will most likely be beating down your door and it the problem won't be finding suppliers.

[CaelAidan]

Oh, wow. So many responses so fast. Thank you!

So, I'm doing something my mom would call lame but my friend think is awesome... I'm making gift baskets that cater to nerds and geeks and fandoms. The idea was to revitalize the gift basket concept (soaps are so boring...) while providing pre-made or customizable gifts for those loved nerdy ones. (I couldn't find anything for my SO for his birthday or Christmas, and when I brought it up with other geeks, I found it was a common issue.) As for trade shows, there's things like Comic-con, which I've already looked into the local ones and even reached out to one about their rules in regards to vendors. I love the idea of partnering up with craftsmen to frame their cherished babies with other merchandise, but that would have to be the centerpiece of a basket, the ooh factor. So... Marvel, Disney, DC Comics, Harry Potter, pokemon, anime, etc. I'm looking to avoid cosplay items (they're generally big, bulky, and expensive), though I'm not opposed to small face paint makeup sets like they have at Halloween.

I apologize for not including more detail earlier. I vary between shy and outgoing, depending on my comfort levels, and not knowing what kind of feedback you'll get makes me shy. Plus I know that I'll nerd out. XD

Thank you again for your time, and your responses. They are appreciated.

[Freelancier]

So are the items you want for these baskets already existing in the world? If so, find one, look at the packaging, call the manufacturer who licensed the character, find out who their distributors are. My guess, though, is that you're too low-volume to be of interest to them, so they'll direct you to purchasing the items off Amazon or eBay.

[Harold Mansfield]

I'm curious..before you did all of this paperwork and all of the things to get a store set up, what was the plan? You had to have had some kind of idea first other than just "retail store". I'm assuming there was some specific product line you were interested in or something.

Why did you want to open this store? To sell what? What was the original idea?

[Brian Altenhofel]

Definitely second what Freelancier said about contacting the manufacturer of what you want to sell and asking them directly how to sell their product. Some will be willing to work directly, some will direct you to a distributor. You can also contact the rights holder to the product that you want to sell to find out who is currently officially licensed, especially since they are likely very conscious of their brand and may have certain guidelines and other resources regarding how you can legally use and promote their brand.

Don't expect room for high margins from a distributor if you're just starting out. Margins generally increase with volume. Many distributors use a tiered system where small orders may be only 15-20% below MSRP, 1000 units may be 25% below, 10K units 30%, and so on.

A typical approach for these "basket"-type of packages is one high value low margin centerpiece item and several low cost high margin fillers (at least from what I've seen). You could set a target margin figure per basket (either $ or %) at different price points and then tailor baskets to provide the most perceived value without violating your self-imposed margin and price point rules.

For example, let's say I want to sell these using the good/better/best model. I might want to retail at $29.95, $59.95, and $99.95, with 40% margins and perhaps 10, 15, and 20 items respectively (just spitballing here). They'd probably have 1 centerpiece each, with the better and best tiers having 1 and 2 mid-value supporters respectively, and the rest of the items being "filler" whose only real purpose is to get margins back where they need to be without compromising the perceived value. You could even vary the centerpieces and supporters with the fillers being the same. An advantage of going that route, too, is that you lower your overall barrier to entry. You can place bigger orders of low cost high margin filler items and tolerate the lack of margins from smaller orders of high value low margin items.

One of the reasons for having done the paperwork first before knowing suppliers or the economics is that some distributors in some areas won't talk to you unless you can produce a reseller's permit (or similar) from your state. Some of them also have non-disclosure agreements on pricing and they see it as easier (less paperwork) to bind the company once than to bind the individual first and then the company again later. There are a lot of people who go through their state's entire registration process without ever following through with actually starting the business because they had to have a registered business first to get the information necessary to determine if they really wanted to (or could) go into that business.

[Paul]

TRADE SHOWS

Forget about trying to find merchandise on line. Spend the money and time to attend the trade show for your type of merchandise. Manufacturers, importers, suppliers all in one place. You get to talk directly to them, see the goods, make deals right on the spot and more important start relationships.

[tallen]

If you know of another retailer who sells the products you want to carry, or other similar merchandise, you could always ask them who their suppliers are. Of course they are more likely to be responsive to your inquiry if you already have a relationship with them and you are not in their "competition zone" (however they define that). At one time, I started a bicycle repair business; through "networking" --as above-- I was able to get the contact information for a wholesale distributor of parts and supplies, and then open an account with them...

BTW, with respect to Trade Shows, you want shows that target BUSINESSES -- not necessarily consumer-oriented shows (although these might be a great source of information and inspiration). So you could ask other retailers what trade shows they attend (or at least know about), which they might be more willing to share than their suppliers. So just picking on comics, as an example sort of related to your area, maybe there is a "comic retailer's association," perhaps with an annual trade show? googles reveals: Home - Comics Professional Retailers Organization (http://www.comicspro.org/), WELCOME TO THE COMIC BOOK INDUSTRY ALLIANCE (CBIA) HOME PAGE (http://www.thecbia.com/index2.html), and THE MASTER LIST of comic book stores & trading card stores in the United States & Canada (http://www.the-master-list.com/)

[CaelAidan]

Wow, you guys are awesome at responding!

Freelancer - Awesome advice, thank you. I've been trying to avoid eBay and Amazon since I have concerns about sourcing and quality, but it's looking more and more like that's the route I'll have to go. Especially since some of the items I want access to only ship to storefronts, and I'm just not to that point. It's my five year goal. Start small, dream big.

Harold - As Brian says below, I couldn't even begin to price out what I wanted to do. Everybody required that dratted resale certificate. I can work with trade reference requests and whatnot, need be, but I can't feign paperwork I don't have just to look at prices. I did account for worst case scenario of having to buy things at Targét at Walmart if absolutely needed, but then there goes all profit.... I'm selling online and at trade shows until either I'm forced to leave my current day job (which is only likely to happen if I decide to have a family, as being around sawdust with no temperature control and lots of stress can't be good for a fetus) or decide that is profitable enough to open up a physical shop. I'm not one for jumping into decisions, getting "too old" for that nonsense. A degree in accounting with years of retail experience don't mean jack, but oddly enough I find insanity fun. I'm one of those people who needs a lot of the right kind of stress. I get bored if I'm not on my toes. I enjoy making gifts for people, either handmade or things like gift baskets. I am a mix of book worm and social butterfly that enjoys people and endless hours of painful research on topics others wouldn't bother with. It wasn't a question of, "Why do this?" so much as "Why not?" Am I doing it for the profits? No. I'll be genuinely happy if I can pay myself what I make at my current job or even less, and otherwise break even. I might be doing it for the smiles of happy customers, I might be doing it for the stress of unhappy customers and figuring out where the money is going to come from. I might be doing it because I can and I want to. I'm one of those lucky individuals who doesn't *need* a job, but wants to work. Might as well work for myself, since it's more about keeping busy than putting food on the table. My current job's paychecks go to video games, fast food, and now to this adventure. But thank you for making sure I wasn't just jumping into the middle of the ocean with no raft, I know plenty of folks do.

Brian - Thank. You. As I kind of said in response to Harold, I'm not expecting much net gain, I'm just happy to break even especially at the beginning. Also, the centerpiece idea... I've actually been thinking this one over for a while and have been contacting local craftsmen and Etsy vendors. If they have something I think will sell, I'm happy to use it as the centerpiece and even include their business card. The nerd in me already named the item category as Legendary Items. There's a cute nerdy local 3D printer who's actually quite on board with my idea, too. Alas, if only every item could be from Etsy or craftsmen, I'd never want for inventory.

Tallen - I am more inclined to partner with the local geek and nerd community to try and bolster their sales, as well. If somebody wants to buy at item I don't carry, I will be perfectly happy to put it into a gift basket. The one retail location I've looked at semi seriously (but won't touch because it's "cursed" - every business in that lot has failed for the last two decades, and it's been empty for three years now) is right next door to a GameStop. So, if somebody wanted to go buy a video game and try to build a basket around it, great. Heck, I'm not above working next door to some of our comic shops some day, and suggesting to customers that they can get XYZ item next door and I'll include it in their basket as no additional charge for the item. The geeky are surprisingly supportive of each other, thank God. We might beat you down in a game of Magic but we'll laugh with you and help you learn how to get better so next time you'll beat us. Pride in that community aside, you've got some great ideas there, too.

If any other responses have shown up... I apologize. I'm on my phone at my day job, and it takes a century to type my small books up on these keypads. I'll hit refresh again when I've submitted this, I promise I'm not ignoring you.

And, once again, thank you for your time and responses. You've all given me a new direction to look in, whereas I thought I was going to have to butt heads with the "wholesaler" middlemen or suck the teat of Amazon until it bleeds me dry. I'll be happy for a while researching trade shows. :D

[Fulcrum]

This business strikes me as a pure online sales and gaming convention type of business.

If you can swing it, you may be able to do something with some announcements that were made last week from Blizzard. They are releasing both a movie (based upon Warcraft) in June and a new expansion for the the same game.

Edit: Ain't nothin' wrong with sawdust.

[CaelAidan]

Fulcrum - I saw that trailer release. I am utterly *stoked* since it goes back to the old lore, not just the WoW filler lore. And, yes, I think that sticking to JUST gift baskets would make it online and conventions only. If/When I choose to move to brick and mortar, I'll have to consider expanding my horizons. Surprising lack of nerdy shops here, despite being Richmond... Handful of comic shops and shops that are PACKED for Friday Night Magic and other events. But the closest anime shop? DC. Closest anything-other-than-comics shop? DC. It'll be taken into consideration what I'd need to do to be more all-year-friendly if/when I do open a brick and mortar. I rarely do anything without thinking on it for a year or two.

Also, there's nothing wrong with sawdust until your asthma says "Stop breathing or you'll die." But, alas, I love my job. Awesome boss, great co-workers, and I get to say all the words Mom told me I could never say at work. Hehe. (I work for a small business that does counter-top fabrication. It's been an interesting and educational experience. Totally worth the cost of the inhalers.)

[Fulcrum]

I'm debating on breaking out my "Tanks. You're welcome." shirt for the movie.

Try to get in touch with forum member kimoonyx. He's in the retail game space and may be the best person here to give advice.

As to the sawdust issue, you get a free(ish) pass due to the asthma. A good respirator/mask will definitely help - the cheap surgical mask knockoffs don't do anything.

[Harold Mansfield]

So basically you just said to yourself "I want to open a retail store" and had no other thoughts, or business plan beyond that?
Usually people have an idea of what they want to sell and how they want to sell it, before they start doing paperwork to open a store.

Am I missing something here?

[CaelAidan]

Yes, Harold, you are. Re-read my posts. I need caffeine or I might be mean. Ciao.

[Harold Mansfield]

Yes, Harold, you are. Re-read my posts. I need caffeine or I might be mean. Ciao.
Do whatever you need to. I'm merely asking you for more information so that I may offer the help you're asking for.


... Finding merchandise at reasonable prices.

So, I did all the wonderful paperwork, federal and Virginia and county. Wonderful. Paperwork. (So much to read in legal jargon for tax things...) I've got my FEIN, my SCC ID, certificate for resale, set up all the taxes stuff, got the email, Facebook page, working on the website... If there was a T-shirt, I'd probably have it already. I know what I'm going to do, what I need to do to get there. I'm scouting retail locations, trade shows, prospecting online sales....

I just have one major, MAJOR, problem: I cannot seem to find reputable, reliable sources from which to procure merchandise. Google and I aren't friends right now. Wholesale, distributor, licensed goods... Everything I can think of to search just returns middlemen who offer no room for profit, or wholesale sites that sell items I would only consider if I ran a dollar store. What I'm doing requires licensed products, not dollar store knockoffs.

Yes, what I'm doing requires licensed items, not knockoffs.

Please let me know if you need more information. Thank you for your time in reading this, and any response is appreciated.

What is it that you're selling or want to sell? What kind of merchandise are you looking for? Are you selling T-shirts or car parts? I don't see anything in here that says what kind of products you are looking for, just that you are looking for something. It is possible that someone here has experience in whatever it is, if it was clear what it was.

Or are you just looking for something to sell and haven't figured out what yet?

[Freelancier]

What is it that you're selling or want to sell?

from the page before:


I'm making gift baskets that cater to nerds and geeks and fandoms. The idea was to revitalize the gift basket concept (soaps are so boring...) while providing pre-made or customizable gifts for those loved nerdy ones. (I couldn't find anything for my SO for his birthday or Christmas, and when I brought it up with other geeks, I found it was a common issue.) As for trade shows, there's things like Comic-con, which I've already looked into the local ones and even reached out to one about their rules in regards to vendors. I love the idea of partnering up with craftsmen to frame their cherished babies with other merchandise, but that would have to be the centerpiece of a basket, the ooh factor.

[Harold Mansfield]

from the page before:

Ah, I didn't see that at all till today. Thanks Freelancer.

Ok, then I have some feedback. No one is more discerning about their tech and collectibles than what you call "nerds" or geeks. They read the reviews, watch the shows, listen to the podcasts and engage in respective communities of what ever it is they are into.

My rule to my family and friends is to NEVER buy me anything tech or sci fi or gaming or anything else in that area for my birthday or holidays because they are going to get it wrong. People who aren't into it, cannot shop for people who are because it just makes for a lot of awkward moments when you pretend to like what they got, but know you wouldn't have gotten that model or color, or version, or wouldn't have gotten it at all.

So, going back to your vendor question. You can't approach it as a general "where do I get stuff" process. You have to be specific about what you want because getting it isn't all the same. You can't fill a geeks basket with a bunch of filler crap, or stuff they could get themselves for cheaper than what you paid for it, and the stuff that they'll actually want doesn't generally come in whole sale prices unless you're buying in bulk. And it's not all going to be at the same trade show or convention.

To do this right, you first have to be a nerd yourself or at least be tech and sci fi savvy. You can't fake it. Then you have to come up with some specifics of the kind of things that you want to offer, and that will lead you in the direction of how to get them or vendors and manufacturers that make original stuff.

I think expanding your reach as sort of a concierge service for hard to find items is one way to go. You can still do the basket thing as your core service, but instead of looking for wholesale items that you can stuff into a basket that the average geek, tech or sci fi enthusiast won't be happy with...why not put that one thing in it that they've been wanting?

So instead of selling baskets with non nondescript, impersonal stuff in it, now you're also offering people a service to find or get that item or items that their loved one actually wants.

For instance, buying me a basket with a bunch of Klingon stuff in it that I can get on Amazon isn't very impressive. Put an actual Klingon Bat'leth in it, and I'd be impressed. But no one in my life is going to know how to even look for it let alone buy something like that.

There's a Kickstarter for a hardware/app combination that lets you control multiple windows from 4 different inputs in one screen. If someone were to gift me the Kickstarter contribution to be the first one to get that device when it comes off the assembly line, THAT would be the kind of gift that a "nerd" wants.

This is how you need to think of your service. Custom. Not general. It's 2 fold. You have to make the giftee happy first because that makes the client...your customer happy. Merely shopping gift basket items is not going to make any geek I know happy and anyone who already makes gift baskets can do that and THAT'S why the gift basket industry is boring and people stick to soaps and crap.

JMO of course.

[Fulcrum]

Harold made some good points on what not to buy a nerd/geek.

Myself, I can't get past thinking that this is will only be a niche/novelty business at best. Now if the OP isn't opposed to some manufacturing then there may be more of a business here.

[Freelancier]

I can't get past thinking that this is will only be a niche/novelty business at best
With a lot of effort and not a lot of margin.

[Fulcrum]

With a lot of effort and not a lot of margin.

As proposed here, I agree. However, I do think that there might be something if the OP is willing to make collectible items and LARP props.

[CaelAidan]

Harold - I am offering custom services. The general stuff would be like glitter on a frame designed to make the picture pop more.

Fulcrum - Getting the rights to manufacture items in this field is probably harder than finding wholesale. They want to protect their brand and image, and I can respect that. Seriously. I'd hate for some nobody to take my artwork, if I were, say, Lucas Films, and butcher it. Which is why a lot of these companies are notorious for going after unauthorized manufacturers.

In other news, I've sold a basket and I'm not even open yet. I'm not really sure what to think of that. It's a small basket with Star Wars vs. Batman as the theme. I'm looking for a few more items on the Batman side, though I've run every item by her first. We're going with things I've found on super sales (thank God for the Christmas season...) and one item I conveniently had but she really wanted. NIB Joker-Batman Batman LootCrate exclusive. Also, heat based color changing Star Wars mug, R2D2 measuring cups. For filler, looking at the Star Wars guys that are like army men. Just need a few more Batman items. It's for her husband and son to share a gift. I think she's more stoked than I am. XD

[DYTW]

Harold - I am offering custom services. The general stuff would be like glitter on a frame designed to make the picture pop more.

Fulcrum - Getting the rights to manufacture items in this field is probably harder than finding wholesale. They want to protect their brand and image, and I can respect that. Seriously. I'd hate for some nobody to take my artwork, if I were, say, Lucas Films, and butcher it. Which is why a lot of these companies are notorious for going after unauthorized manufacturers.

In other news, I've sold a basket and I'm not even open yet. I'm not really sure what to think of that. It's a small basket with Star Wars vs. Batman as the theme. I'm looking for a few more items on the Batman side, though I've run every item by her first. We're going with things I've found on super sales (thank God for the Christmas season...) and one item I conveniently had but she really wanted. NIB Joker-Batman Batman LootCrate exclusive. Also, heat based color changing Star Wars mug, R2D2 measuring cups. For filler, looking at the Star Wars guys that are like army men. Just need a few more Batman items. It's for her husband and son to share a gift. I think she's more stoked than I am. XD

If you are offering custom services to distinguish yourself from the others and the masses, I don't foresee you will be being doing volume sales anytime soon so you will need to make sure your profit margins are reasonably high enough to justify your business approach and strategy.