Basic Sourcing Information

As my readers will know by now, I have been putting together a wine making kit to sell on my store. I have been working on this for a while now, at least a month, I'm not positive how long (I should probably pay attention in the future) but I have met a couple of delays. These delays could have been lessened if I had developed a better sourcing strategy.

A sourcing strategy sounds like a big term, meant for bigger businesses, or eat least larger small businesses, not a dorm room business. A dorm room business is just purchasing, right? Buy products and then sell them. Well how are you going to choose what to buy? How do you choose where to buy from, or how many you'll buy? That's a sourcing strategy; it doesn't have to be the incredibly complicated procurement systems some companies use.

I needed a few products for my kit, and my ultimate goal was to find the most cost effective products that would still provide quality for my customers. If my customers purchase products that are of low quality because I decided to only go for cheap products, that reflects poorly on me. No one cares if I tell them "oh, my supplier messed up" because to them, I messed up. Think about it, if your supplier got the product from someone else, you don't care, if your product fails, you have issue with your supplier.

I did quite a bit of searching on the Internet. First, however, I developed a list of products that make home wine making easy, and then a list of items that are required for home wine making. These required products are the ones I chose for my kit. Some products make things easier, but they are not required, and thus would be stuff my customer does not need. So, my product development strategy was to develop a bare essentials product that was quality, but cost effective. I had a target price in mind, $10 for the kit, so I knew about what I could pay for the different parts of the kit.

So, on to sourcing; I knew what I needed to get, so I found the lowest cost suppliers I could find. I had it narrowed down to about 4 different suppliers for the least expensive products. I then eliminated those suppliers that did not have everything I needed, even if the products were not lowest cost. Something to remember is that with low volumes, shipping cost can be a major deal breaker. I had thus narrowed it down to 2 suppliers, which I was ok with; 2 suppliers to put together these kits. I was fine with it until I got a shipping quote at $18, on about $40 worth of products. Back to the drawing board.

I did a cost analysis (adding together my costs per kit) of using just the one other supplier, and it wasn't great, but I thought I might have to do that. Then, a few more Internet searches, and I finally found a company that had EVERYTHING I needed, and at the lowest prices. I have no idea how they were able to do this, but everything was a quality brand, so I purchased everything from them.

I did not think it all through, however, because I ordered 30 1 oz. doses of a liquid sanitizer (BTF Iodophor) which is required, and I received 7 4 oz. doses, and 2 1 oz. bottles. That did not work, so I talked to them, and they told me to send them back, and they would re-bottle them for me. I sent them all back (except the 2 1 oz. bottles) and got 28 1 oz. bottles back. The problem...the bottles they use leak. Iodine stains, and is nasty stuff, so I decided to change my product. It cost me more, and I COULD use the Iodophor, but I decided my customers would not like products that could leak all over everything.

I knew there was one supplier (Mr. Beer) that sells affordable, one-step powdered sanitizer. I bought 25 of those packets, and it comes out, with shipping, to about the same price as I was paying, so I'm ok. I'm currently waiting for the products to show up, but I think I'm going to put up the wine kits on the store once I get a shipment confirmation from Mr. Beer, so I can start advertising.




That was a long story just to make a few points, so I'll try to bullet-point the important stuff.

• Develop a product plan
• Figure out exactly what you need for your store or product
• Develop a list of potential suppliers, google is your friend for this
• Look for overlap, where suppliers can supply a large portion of your store
• Do a total cost analysis (Cost of product, plus tax, shipping, etc.)
• Develop a list of 1-3 suppliers, and commit.
• Remember, you might save money on shipping per unit by buying in bulk, but don't forget about your personal storage abilities (ex: A dorm room cannot store large boxes of shirts)
• Make your purchase, and be excited to have stuff to sell
• Be ready to adapt in case something does not work out.

I hope those are some helpful points. If you have any questions about this process, PLEASE feel free to contact me using the contact button on the right.

Also, remember, if you would like to submit a guest post, I am still accepting them. I love to get other points of view out there.

If you are reading this on facebook, you can find the complete blog at: dormroombiz.com

Summer Projects YOU can do

Well, if you're anything like me, you're in the summer, and you need money. I plan on spending lots of money when I go to England this summer on my study abroad, unfortunately, as the dollar is dying out against the pound, that is going to be difficult. It means I must either spend TONS of money, or just not buy much. I would rather have the option of spending TONS of money (wouldn't we all)

I need to come up with some projects to do, so I thought I would post some of my ideas.

1. Sell stuff on e-Bay
There are lots of things out there you can sell on e-Bay, and even more places you can find that will tell you how to do it. I am currently selling some old Yu-Gi-Oh cards I found. I bought them as a gift for my cousins, then lost them. My cousins are no longer into these cards, but other people are, and I will sell some stuff to them.
It's actually possible to make LOTS of money from projects like this: I used to make a couple hundred a week from selling Trading cards (back when I was 12ish) There's lots of money in it, but you have to do some homework. Learn the best ways to procure, repack, sell, and ship the cards. I had good suppliers (usually other sellers on e-bay selling boxes of cards) I sold the individuals that were good, shipped them in the bubble envelopes, and turned good profits. You'll also have to learn the game a little so you know which cards are good to sell, and which ones can be either trashed, given away to someone who plays, or sold in "grab bag lots" (a trick I actually created on e-Bay...they have been around in real life for some time, but I was the first to implement them with trading cards on e-Bay)

2. Mow Lawns
I will not be doing this, since my knees are bad from football, but you can! It does not have to be lawn mowing, it can be any physical labor people don't like to do. It sounds simple, but there really can be BOATLOADS of money in this. The best things you can do is first figure out what other companies in the area charge to mow the lawn; you will need to beat these prices. You will then need to decide who you would like to service. If you are mowing lawns, it will be houses near yours since you won't want to lug your lawn mower across town. If it is something with lighter equipment, you can expand more fully. You will also need to advertise. You can post on bulletin boards, send out mailers, even go door to door to tell people about your products (make sure this is all allowed before you do it) There are many opportunities out there: you can clean pools, do gardening, paint outside or inside, mow lawns, change peoples oil, anything you feel you can do well, someone will probably pay you to do. I once had a business managing other kids businesses, since I felt that was my strong point.

3. Get a plain old job
There are many good paying jobs out there that you can get. I am not one for getting jobs, since I like to be my own boss, but if you want one, here are some tips...work in a restaurant, or an office building. If you are a server, you can make BANK on tips (chili's around here, servers make about $100 a night) office buildings you will also get better wages/salary. Don't work somewhere like a grocery store, you make minimum wage with no opportunity for more.

4. Steal it
Just kidding

5. Have a garage sale
If you are anything like me, you have old crap in your room and house that you don't use anymore because you're at college. Talk to your parents and have a garage sale. You can get others involved and make a real event. Advertise in local papers, and be prepared to sit outside all day. You can probably make a couple of hundred bucks from your old crap.

6. Sell stuff online
You can use a website like ecrater.com to create a store for free, and you can sell some of your wares online. This is similar to e-Bay, but you would simply have your own store. It's very easy to set up, and you can even buy a domain name to mask it.

7. Invest what you DO have
If you want, you can even start investing in the stock market (provided you have enough money to cover the commissions with your returns) I highly suggest doing lots of homework before you buy a stock, and for your own benefit, read up on how to invest. My dad is very involved with reading Jim Cramer and watching his show, Mad Money. He's entertaining at least, and I believe he has some good tips. My biggest tip, don't buy stuff simply at market price, set a price, otherwise you could end up selling your stock for $0.01 or buying a share for thousands. Trust me on that one. Cramer's show is on at 6pm and 11pm Eastern on Weeknights.


I hope some of these ideas either provided you with a good idea, or helped you to come up with a good idea of your own. I hope you all make lots of money this summer. Just remember, the best way to stimulate the economy is to spend the money you make. Don't spend MORE than you make, but keep that money moving through the economy.

Do business ideas help all businesses

As I've been slowly getting this store going, I've been trying to apply some concepts from the business classes I'm taking. I am trying to set up an inventory system, a customer database, an order database, as well as a table of product information, and supplier information. I got to wondering, is this overkill? I mean, yeah, a small business should have these systems in place, but this is a small business, run out of my dorm room. My inventory is probably less than $250, and I'm just not sure if I have the type of business that requires this kind of organization. I've thought about it a lot, ever since I took my Managerial Marketing class. I used to apply those concepts to different businesses I've run in the past, not actually applied them, just thought about how those concepts could have helped it more.

I guess these systems are good to have, just in case this thing does blow up and I need a management system, it would be better to have than to not have. Also, this does provide good practice for when I need to do this in the real world. I'm simply creating an Access database, which doesn't require much (but man, if you mess up Access, it just doesn't work) but I'm also thinking it's powerful enough to run a small business. the more I type the more I think this probably is a good idea, since this could ultimately help me to run forecasts and produce some effective charts, so I can see how my business is running.

My ITM group is working on this project right now, where we have to take our "grandfather coffee shop" that we "inherited" and write about how we could use a few aspects to technologically advance it. We talked about a biometric payment system and it seems pretty cool. I wish Michigan State would use this kind of technology. You set up a central account, and can link a credit card to it, as well as your address, phone number, and a username and password. You then set up your fingerprint next time you come in, by putting in your password and recording your fingerprint. Then, each time you come in, you place an order, scan your fingerprint, and it automatically charges your credit card. I thought that would be nice for state. You could use your spartan cash (campus cash account, lets your swipe your ID to spend your money) and even get into the cafeterias with it. You could also use it to provide access to different buildings, say Student A has clearance to use the chemistry labs, he can use his fingerprint to open the door. It just seems like that could be a fun technology to work with. Of course there are some security issues, like what if someone loses their finger, or entire hands, they wouldn't be able to use the system. Also, let's say some unsavory characters wanted access to your stuff, they might do something you wouldn't want to happen to you. I know that's one reason they dont' do this with ATM's, same with retinal scanning; those are body parts, but their not exactly body parts you can't lose.

This weekend, the rest of the shot glasses are definitely going up, as well as the temporary tattoos. I figure the tattoos are good add-ons, I just hope people don't only buy those, because then they'll be paying $5.50 for shipping a little $0.50 tattoo. I should include that in the description. I wonder if ecrater will allow you to do something like that, where it costs $1.00 shipping if they buy it alone, but nothing if they buy it with something else. My shipping tables are specific enough, and they can't be made specific enough. Anyway, keep reading, I'm back into posting.

Check out the store:

www.dorm-gear.com

Cheap Dorm Food

Well, I tried making the quesadilla's, and they were dynamite! It was simple, tortilla down, mexican cheese spread out on it, meijer brand chili powder sprinkled over top, and another tortilla. Microwaved it for like 20 seconds, and it was awesome. This will sound weird, but it reminded me of the really good spot in a bean burrito from Taco Bell...you know, the sauce pocket that always forms and is really the best part of the burrito. This entire quesadilla was like that; the tortilla got soft, (since there was no direct heat, it couldn't become crispy) but I kind of liked that, it was a very different quesadilla, and I loved it.

My spring break plans are set now. I'm heading to Detroit for like 4 days, and then heading out to Texas for another 4 days. The Canada trip was put on hold due to lack of interest, it will happen at a later time. I like this anyway, I get to see some family in Detroit, and then see my Parents and friends in Dallas too, so it's not too bad.

I am going to upload my webstore soon, it should be coming out in the coming week hopefully...actually, I think I'll wait till after spring break to do it, so I'll actually be here to ship out items in the even that I get any orders.

I had a plan for a little business to start over the summer. Inspired by Neville's water selling idea (see it here) I am going to try to find a way to sell drinks/candy at the pool this summer. I have to contact the homeowner's association to see if I can do this. I figure I'll offer them a share of the profits, and then to help with trash, I'll offer a refund if the kids bring back the trash, to encourage them to throw things away. Of course we'll clean up at the end of the day anyway. I am going to try to get a few friends in on this, so we could share posts, and also the costs. I thought about this for a while last year too, and I figured out we could make a KILLING on this stuff if it sold. There is relatively little startup costs, just the candy, drinks, and wood/paint to make the stand. It folds up real nicely, into very little to carry, if I build it right, it will be great.

The Front of the Stand, with a plastic window to display candy.

The Back of the stand, where we would sit
This is the stand all folded up. The top comes off
Another View

We would paint the stand, and come up with a different name, this is just a 3D model to show what it would look like, approximately. I think it could be a very profitable model. I put together a quick spreadsheet just for the candy, using a supplier I found online. I see high potential. Unfortunately, I can't get the image to work right now, but the numbers are good, ranging from a 44% markup to 114% markup. Woot!

Dorm Room Business Update

I've been up to a lot. I'm working on the website which is going to be somewhat difficult. I'm going to need to spider it all together, and make sure everything works. It'll be a ton of pages. I also need to work out how I'm going to use a shopping cart, figure out what product options I'll offer, and research total shipping costs. I actually designed a logo for the website, and it's pretty cool, but I don't want to publish it until the store is up and running (and the domain is purchased) I don't want someone to see it, and buy the domain and try to sell it to me.

I'm currently working out the details for hosting as well. I've found a few websites that will host pretty cheaply. I'm leaning mostly toward host monster, since it seems to be pretty legitimate, and has most of the features I would want. It is 5.95 a month, but you have to pay ahead of time, so it's a $100 investment before the store actually opens. I'm working hard on this, and always looking for new merchandise. Let me know what you think of the product photos I've already put up by the way.

This is the add to cart button I think I'll use...any suggestions?