Selling?

[blue928]

Hello

I havent had a chance to look through all the posts on this site yet but I thought I would throw up my concerns with my current situation.

My business partner and I have commenced setting up a I.T. Sales, repair, web and consultancy. We both work fulltime still and work in our sparetime to set up frameworks for our systems, our vendor accounts etc. etc. so basically when were ready to launch we'll have a reasonable basstation to leap from.

repair, web and consultancy we tackle very well however the sales side of thing worries me sick.

im somewhat dismayed by vendor pricing for products such as hardware. i was recently approached by an old uni mate for some product. He gave the prices he had already got and basically said match or better them. I went about looking through the vendor accounts we already have and found that the prices i could provide were nowhere near competitive with the prices. I wonder how we are to become competent in selling when we are essentially bending ourselves in half to meet or come close to others prices while making a decent profit.

We aren't really at a stage where this is a concern but if there is something I am not considering that I should be any advice or direction would be appreciated.

Thanks everyone

Always a good read ! :P

[cabading12]

If someone else can get a product at a cheaper rate, thereby allowing lower prices to the consumer, why can't you? Does your competitor buy in bulk in order to get a discount? Does your competitor have a better source? Does your competitor actually manufacture the product? Figure out how your competitor can turn a profit at such a low price and then adopt their methodology, but improve on it where you can.

If you determine that it is just impossible to match prices, you'll have to sell a different aspect of your product. Tell your customer why your product is worth more than your competitor's cheaper version. Even if the products are identical perhaps your customer service is better, making the value of your product higher. Remind your customer that value is a ratio of cost to worth (V=C/W). Your customer should want the best value, not necessarily the lowest cost. Therefore, if your product's worth is greater than your competitor's product's worth by a wider margin than the cost differance, then your product is the best value. Figure out what makes your product worth more. Reliability? Quality? Service? Brand name recognizability? Connectivity? Ease of use? Configurability? Think intangibles as well as tangibles.

[blue928]

They are not manufacturing their own product. I certainly believe they would be buying in bulk. Other than that I took the step of hitting up all manufacturers to find out who the distributors are for their products and went from there to get accounts. I can only assume at this stage they are sourcing from same/similar places as me.

I wonder what sort of open source intelligence I might be able to get my hands on there?

I think a value added reseller option is certainly beyond us at this time really especially considering our sales are predominently geared through internet sales at this stage however thanks and I've taken it on board to strengthen our reliability, service etc. bases.

Thanks for your reply


Michael

[Kyli Call]

MAB, the resellers just sell alot and make like $10 on each items. Normally they sell 100 itmes each they.

[blue928]

Originally Posted by usery

MAB, the resellers just sell alot and make like $10 on each items. Normally they sell 100 itmes each they.

10 dollars? Im no number cruncher but surely thats not a profit margin to get excited about ?

[Arlene M Passalacqua]

It might be if you live in China.

[Kyli Call]

yes $10 per each item, so if they sell 100items each day, they will be profiting $1,000 each and everyday.

Mmmm $10 on each item is alot considering how much Amazon.com said about how much they are profiting, amazon actually tell the press they are only making 10cents on each item.

[pps.llc]

It might be the definition of profit.... For some profit is the difference between gross sales, and costs of goods sold. In that case $10/unit would be terrible.

However, once you figure in all the overhead, plus taxes, if one is still making a $10 profit, that seems really decent as long as the volumes are there to keep the net overhead low.

$300,000 profit after paying salary, warehousing, taxes, building etc seems even better.

Ron

[blue928]

Originally Posted by mnphysicist

It might be the definition of profit.... For some profit is the difference between gross sales, and costs of goods sold. In that case $10/unit would be terrible.

However, once you figure in all the overhead, plus taxes, if one is still making a $10 profit, that seems really decent as long as the volumes are there to keep the net overhead low.

$300,000 profit after paying salary, warehousing, taxes, building etc seems even better.

Ron

I certianly took the $10 profits in the context of difference between gross sales and cost of goods sold.

Incidently 300 000 sounds marvellous

[than2004]

Hi,
If the only way one is to compete in an industry is price that is b/c the product being sold is not unique. If your product has an advantage over the competition then selling is never an issue. I know nothing about computers but I know a lot about selling. There is only two things to sell on (a) price and (b) benefits to the final user. If there is uniqueness to your product/service and you feel passionate about it, then it will sell. You will sell it. If it is the same or similar to the competition then you better consider your business idea. You are looking for a niche or you are looking to find away to reduce your costs and become the most efficient. To be honest most new ventures are not capable of becoming efficient b/c that requires that you sell in bulk so I would find your USP (unique selling point) before you start at this full force.

Audrey

I havent had a chance to look through all the posts on this site yet but I thought I would throw up my concerns with my current situation.

My business partner and I have commenced setting up a I.T. Sales, repair, web and consultancy. We both work fulltime still and work in our sparetime to set up frameworks for our systems, our vendor accounts etc. etc. so basically when were ready to launch we'll have a reasonable basstation to leap from.

repair, web and consultancy we tackle very well however the sales side of thing worries me sick.

im somewhat dismayed by vendor pricing for products such as hardware. i was recently approached by an old uni mate for some product. He gave the prices he had already got and basically said match or better them. I went about looking through the vendor accounts we already have and found that the prices i could provide were nowhere near competitive with the prices. I wonder how we are to become competent in selling when we are essentially bending ourselves in half to meet or come close to others prices while making a decent profit.

We aren't really at a stage where this is a concern but if there is something I am not considering that I should be any advice or direction would be appreciated.

Thanks everyone

Always a good read ! :P[/quote]