Planning a new business is very exciting. If you take some
time to do some extensive planning, it can be rewarding instead
of a source of frustration. If you plan on starting an
ecommerce business or a retail store front, the eternal
questions usually boils down to inventory.
Customers today want a variety and want to have choices even if
you cater to a niche market. You might blame this mentality on
bigger stores like Wal-Mart. They have large purchasing power
and carry tons and tons of inventories. But planning inventory
for your endeavor has to be planned a little more carefully.
You will want to start out building your brand or authority by
having enough inventory to draw people to your store or website.
Once you build up a reputation, people will come back to you
again and again. The challenge is how much inventory can you
afford to buy and how much can you afford to keep on hand.
Clearly there is a ying and yang relationship at work here.
Our first online website started with 10 pallets of inventory
purchased from a reputable company in China. We only had
knowledge of the demographic market we were targeting but little
authority. It took some time to tell the world "we are the
experts here, so come buy from us." You do this by being
established, word of mouth, and in the case of e commerce, links
to your site. So at some point things went well, but then we
ran out of inventory. Things stopped in the sales department
obviously. So then you have to order again, but there is a time
function involved when importing that you have to plan for. It
takes about 30 days of sea travel for goods to show up plus
there is lead time for the factories to make and prepare your
items.
The next order was a full twenty foot container (about 15
pallets). Now we were back in business but you always need to
be thinking the next container ahead. On one hand you do not
want to hold your inventory since the goal is to turn it as fast
as possible. On the other hand you do not want to run out
either. Hence the new problem is one of balance.
So what's the magical answer? There isn't one. Why? Because
all business models are not the same. So what you have to do is
trial and error your way to what works for your business.
Looking at trends will definitely help you with the importing
timeline. If you are a storefront you will notice that your
location has a lot to do with how fast your inventory is turned
over. If you are a website then you know the age of the site,
the number of links and your marketing plan have a big factor on
your search engine positions. Improving those positions always
allows for your inventory to turn faster which gives you better
tools to figure out your importing decision.
Tony Scorch: Is a contributing editor to Do it
Yourself Manufacturing which is a research site for people
looking to start a new E-commerce website or business. You can
find it at http://www.diymanufacturing.com.
