Okay I know I'm not the first person to think of this and this isn't even a brand new idea, but simply put: how does an Australian based re seller of cheaper Asian goods bought wholesale from various suppliers (aliexpress, dealextreme, dhgate etc) sound? But with more attention to actually decent customer support, quality checking and honest pricing with community support. Along with the fact that being based in Australia would allow much faster postage speeds in comparison to DX's 1 month or so delivery time. I know I'm probably being too idealistic but why not? I personally shop online on various stores and the only dislike I have with these companies is their often terrible customer support and shipping. I know a friend of a friend of mine recently started up their own online store with a similar idea but with the most retarded pricing. They seemed to think that they could sell a WM8650 Android tablet which retails around 70$ for individual and 60$ or less for wholesale at a ridiculous price of 400$… Obviously I can't keep the price exactly the same as buying overseas but I'd like to think it wouldn't be too far off. Drop shipping is a nice idea to keep the prices low but then that ruins the whole point of buying from an Australian company and you may as well buy direct from them if you want to wait and deal with their company. But yeah those are my thoughts and I'd like to know what other people think.
Business Idea
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Good local customer support for cheap Chinese goods — great business idea but I've voted "Too Idealistic". Definitely not a new idea, but obviously there are execution difficulties. On the other hand you can argue that many those eBay-shop-turned-big-online-retailers such as DealsDirect, ShoppingSquare, CatchOfTheDay — they are all trying to execute that idea, and from some perspective a lot of them have actually done quite well.
However,
- You can't personally handle all the support issues (if your price is good and customers are crashing your site). You ended up having to hire support personnels whom might not appreciate the same ideology as you.
- If your support base is here, they are going to be expensive. Hence your price might go up, or you really have to sell in big volume to generate the revenue.
- Big volume leads to more customer support issues. Australians are ungrateful bunch may I say, and sooner or later you'll miss a beat, and unhappy story from the customers ended up posted on OzBargain or on Whirlpool.
Well. Maybe you have a secret sauce for successful business that you are not revealing to us, but these are just my 2 cents. All the best!
Ok, first of all my friend, paragraph. It took me 3 sessions to finished your post. :)
Warranty problem is the biggest hurdle you'd face.
People in western countries uphold this value very much, unlike in eastern that understand about value of cheap products. They sorta, understand it. Couple of people that i know had tried this, albeit in niche market and unique items, and both got stung with returns and customer complaints if immediate refund or exchange not given. As samfisher mentioned already, returning product won't worth it from seller's part.
I guess your friend that selling Android for many-fold the factory value already consider this, and decided that the price should include return/fail cost.
His friend is abusing public perception of Android phones and selling them pieces of junk that don't seem like it at time of purchase.
I actually know someone who would sell $100 android tablets for $300 and put signs up saying they are just as good as iPads.
You don't need a huge surcharge to make up for failed phones.
I also completely forgot though, once I started buying a lot of stock regularly, my supplier trusted me and would replace occasional faulty phones without asking me to send it back.
However this doesn't work if you have a lot of faulty products.
Part of buying from these places is knowing yourself what is a well made product and what is not.
Certain brands and manufacturers will product very reliable phones etc, some will product junk.
It only gets easier and easier as you start to realise what works really well and what doesn't, its all experience.
I hate to say it but I am put off buying trinkets and gadgets from Australia because of our postage rates. When you consider places like Hong Kong give free delivery, or I can get it from the other side of the world like UK for about a pound, you just can't compete. I sometimes get excited by a local offer, only to factor in $7-$12 for delivery, which makes it a non-starter.
Also, I thought some suppliers already were trying the "local warehouse" idea, which might be slightly similar? e.g. DealExtreme with all of about 3 products :) http://www.dealextreme.com/c/au-warehouse-stocking-100003.
Its very easy to compete with places like Dealextreme.
For example they might sell a small item for $30 USD, I could often buy it for $20 USD delivered with my other products.
Big items on Dealextreme might sell for $150, I could often get them for $100 etc.
Free shipping just means its included in cost, as soon as you go wholesale and getting it shipped with other products its worth it.
I don't disagree with you. I have often seen items, especially bulky ones, cost more than "retail". What I was getting at was how do you compete with selling an item like an iPhone charging cable http://www.dealextreme.com/p/usb-data-cable-for-iphone-4-97-… for AUD 1.39 plus delivery? I'm lucky if I could find a local supplier with stock here who doesn't drop-ship that sells it for under $10. Unless you can stuff it in an envelope with a 60c stamp it's going to cost $6-7 for a postpack (unless the "big boys" get a much better rate on delivery than I am used to). You might be able to buy it wholesale for half that price if you order (and subsequently sell!) 100 units, but how can you deliver it for that price?
From my perspective as a gadget buyer, not a businessman…
You can get it for around 70 cents delivered in your package of other products
Obviously the customer would pay shipping if I was an online only store, but they also get it quickly.
If you sold it for $2 in person which I would personally pay, your making at least $1 per sale.
There is truth in what both of you say. If you can combine shipping, then it will save you money, but you cant build a business around saving money on combined shipping.
Endoftherm, you highlight the issue for setting up business here.
Our overheads are highly expensive.
Taxes and govt charges are crippling our businesses.
Australia Post delivers goods from overseas suppliers cheaper that we can buy here.
And they have a monopoly on this.
And our "do gooders" are under the mistaken belief that government run monopolies are an asset to this country.
WE pay some of the highest electricity rates in the world, our postage costs are extremely high, telecoms have come down, because we now have some sort of competition.
On the latter our past govt supplier is now increasing business, ever since they finally dropped the screw the customer mentality that existed as a hangover from their government monopoly days.
Aside from that as Scotty says, you might be able to make a go of it.
BUT you need to learn about marketing and presentation. Ideas without proper implementation wont work. Your non paragraphed post worries me. It says inexperience and lack of attention to details to getting your ideas across.
Like Scotty says, there are many businesses that have grown out of garages etc, but what most dont know, as it does make for great PR stories, is that behind the scenes there have been great organisers. For Example Apple has the two Steves, but behind the scenes were two big organisers, Mike Markkula, and Mike Scott. Markkula was a millionaire who ran Intel at one stage and Scott was the administrator, again with past business acumen.
I'm not sure what you mean pete.
My business was only viable because I would order insanely big boxes full of items from Hong Kong that I honestly thought Australia Post would be annoyed at me for.
Its amazing how cheap it is to ship to Australia.
I think you're missing our point. You're arguing from a vendor's perspective. We're not saying you can't get stuff cheap, use strategies to get it shipped to here cheap or free etc. I'm sure you can make $1 profit on an item too. I'd end up eating a bullet before too long if I had to deal with 100 people to make $100! My problem as a consumer occurs when I have the local shipping charge passed on to me or I have to drive somewhere to pick up a $2 item. If my option is to pay 10 times what it is worth (and have to wait up to a week for Aust Post to deliver!), or wait 3 weeks for it to come from overseas for next to nothing, I know which one I'll choose.
There is always the markets which would make selling $2 items easier, It was one of the things I did with my products and it was very successful. The main benefit was that because its not on the Internet its very easy to resolve issues without people giving you bad feedback etc.
Also the idea is to have a large range, some $2 items and some $100 items.
Customers also will buy multiple products on purpose if it means the shipping is worth it.
You would be surprised how many people don't' want to wait for their purchase and will pay a little more for a local product they can get now or quickly.
I've been buying from China and reselling on eBay at about 3 times the price. People buy because they want delivery quickly, and are prepared to pay extra.
But the postage hammers the profit unless you are sneaky with what you stock. For example, if you repack an iphone power cable you can make it fit into a 5mm thick standard envelope (if you use no packing) and post it for 60c… but it's a massive pain in the arse compared to just letting it go as a large letter at $1.20 or so.
But there is no way you can post a iPhone case for 60c, so if you buy at $1 (delivered) then you have a total cost of $2.20 before you even start thinking about profit.
And you need to add heaps of profits to cover your stockholding and the inevitable incorrect deliveries and faulty products that you cannot (feasibly) send back.
So, yes there is money in it, but overall it's not a business you can rich from. Plus there are already literally THOUSANDS of other people already doing the exact same thing.
Depends on what your time is worth, i can't see it being a money making venture. You have to realise they've got subsidised postage, low hourly rates, and an excellent exchange rate. As other people have mentioned you also have to deal with returns.
I occasionally buy things for 3-4 times the price from an aussie seller, but it's rare, and only in emergency.
Thank's everyone for the immense feedback, I can't even think of where to respond to everyone.
Yes I am not very old and this is simply just a concept I'd like to discuss, even if I wanted to try I wouldn't have the money or knowledge to start. I'm only just a semi broke 2nd year University student haha.But yes I agree that this idea isn't the best, the thing is though I don't really intend to stock a vast selection of various items. Somewhat more like this man http://www.topnotchtablets.com/ - Roman is a small reseller based in USA. He stocks only what he's really thoroughly tested and believes are up to standard. He also remains pretty active on the slatedroid community forums which is also a big plus. He knows people can buy perhaps 20$ or so cheaper elswhere online in asia and wait several weeks but he's honest about it and everything else.
Unlike other various resellers, for example in America the Airpad I believe by the company "X10" is really just a rebranded Lanyu-LY910 from what i recall. Even pictures posted on the community forum show internals are labelled "Lanyu". When I tried to inform other users that this is clearly a rebranded tablet a company admin on the forums deleted my post and notified me to "Stop spreading mis-information"…. This is the kind of thing I want to steer clear of. (A side note as well I'm pretty sure its the same deal with the Australia "DXTREME" tablet as I swear I've seen a tablet using that same manufacturing mould with the same hardware before.)
Rather my business would cater more to budget minded tech literate people who would like decent electronics fast and easily while still at a reasonable price. I would only stock items thoroughly tested by myself or others and would be open to suggestions on community forums. As a result of this I'd probably only stock very few items. Obviously since such a community would most likely be well read as to what they are getting themselves into I'd be completley honest as to what specifications are for said products unlike many chinese sellers.
In essence my idea is similar to his in that I want to be able to supply a small selection of decent quality chinese products to Australians with a better delivery and processing time. I know as scotty said if I'd want to make a profit I'd have to sell large amounts but personally I don't intend to make a huge amount of money of of this nor intend it to become huge. I'd be happy with even a relatively small profit margin. Electronics are a passion of mine and it'd be great to share it with others at a decent price with good customer support.
Also in terms of warranty, I know quality control on such devices are pretty limited. Hence why I'd aim to also perform some quality checks of my own before selling them to people. As I said previously since I'd only be selling a small-ish amount - probably only 20 or so to start out, such testing wouldn't be too much of a hassle. Perhaps also due to the small order quantity and value I might be able to slip it beneath the limit of 1000$ and not have to pay GST on said imports. Samfisher5986 maybe you can shed some more light on this matter. Also I'm guessing this would be confiscated by customs then since they just HAD to use a PSP-esque mould.. http://www.volumerates.com/product/jxd-s601-4.3-android-2.3-… I'd much like to resell an item like that, the idea of an android powered pmp with dedicated gaming controls at a decent price is pretty cool to me.
Finally just a disclaimer, I know I've most likely missed something and I understand there's more to running a business than just putting up a website, buy wholesale electronics overseas and resell here. I'm simply wondering given all thats been said whether it'd be a reasonable idea.
better off being an affiliate
Shipping things via EMS or Airmail just won't cut it plus instead of screwing around with warranty, YOU wear the cost by factoring that into every item of the same sort sold. Plus you as the importer will assume all risks…ie if something deems to be faulty and you got caught out by Fair Trading (it happens more often than you think), the recall notices can run a fairly large bill not to mention the administrative overhead that will incur and there's no resolution with your supplier overseas either as they will simply say to you tough sh!t.
Mate just do it. Take some cash and set it aside and buy some stock - you already have the passion for the product and understand you won't be a profit super star over night. Go get a part time job for a month or something and save up some dough. In fact work in a call center for a while and learn about customer service from the ground up. That is key!
Your costs to run a business in Australia are actually REALLY low. You don't need to know anything about marketing and you don't have to worry about staff or wages. Postage costs will drop as you get larger because you can negotiate with AU post for better rates. Which is why I now charge $5 flat rate regardless of what a customer orders.
I started my business on a $3K investment on stock and just kept churning it over and over again… after a couple years of hard work I've managed to build a nice little online business that has now given me the flexibility to do what I want when I want. My friends say I'm lucky… yeah like that had anything to do with it.
I was halfway through a Business Management degree and started working on yet another marketing course when I decided it was all old and irrelevant. So I quit uni (I'm not saying you should!!!) and worked for an online business for a year and a half and learned everything I could. Read lots of business books along the way… heaps of good stuff out there.
Friend of mine is in his fourth year of Uni and he's making more money in his venture than most people I know in their mid 30's slugging away 70hrs a week. He started out with less capital than I did!!
There is only one barrier to entry and that is yourself… There will be heaps of people that will say your idea is dumb, or it won't work, blah blah blah… I had all the same crap when I first started. But I proved them all wrong.
If you're in Melbourne and want to chat just PM me. Happy to meet up for a coffee and give you heaps of tips and advice. Help you avoid some of the mistakes I made when starting out… I absolutely LOVE talking shop.
This offer is open to anyone who is genuinely interested in starting an online business. I have lots of contacts globally and I'm really big on information/knowledge sharing.
how about a virtual coffee and a good chat? im in qld . would love to talk setting up shop with someone who "gets it".
Hi Mate - hit me up [email protected] and I'll send you my personal email address. Always keen to give some advice and help out. I would have sent you a PM here but it looks like you have your message system off.
I used to import from similar places but with much better prices. (I quickly learnt that Dealextreme, Alibaba, DHgate etc are a rip off)
Even then it wasn't that great, I was making a decent amount of money and would have made a lot more if I kept at it, I was selling it physically to customers. The only reason I quit was that my business partner went to another state for a while and its not the kind of thing you want to do alone.
Here are the problems.
Higher then normal failure rate (not a big deal because certain sites are insanely cheap)
Customers want warranty, you legally have to give 12 month warranty if not at the markets etc
You'll get quite a few products that will fail in the first week making customers annoyed. If you want to keep the customers you'll have to give exchanges or refunds on the spot.
Customs are MUCH more strict then you think, the only reason people don't realise this is because their packages don't get opened and checked, but when it does…..
Returning products back to China/Hong Kong is not worth it, very very expensive and then you need to find a friendly supplier who will ship it back to you at low cost.
Phone looks similar to iPhone without any logos? Seized and $2000 fine or taken to court
Looks similar to a major brand like Microsoft or Nintendo? Seized.
Your supplier accidentally sent you a fake iPhone? $2000 or taken to court. These companies do make small mistakes sometimes, and one of these times they will send something that can get you in trouble.
None of your phones are a-tick certified, all it takes is an angry customer to report you…
I could go on…