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.

The Business is on it's way

I've been working on finding products, and so far it's going pretty well. I've decided I will be selling clever/cool looking magnets. I ordered a sample of magnetic ink jet paper, so I can see if it will work in my printer. I'm also making a thing that can hold like 4-8 pictures, so people could get one or two of these for their dorms.

I'm currently figuring what else to sell. I would need to dropship most of the products, and ideally I find a site that can dropship most of the items, so I don't have like 4 different shipping charges. I found a site that can send out DVD's, but it's based in Europe, and after the exchange rate, it's not as much of a deal as you would think. I'd like to send like laptop accessories, ipod accessories, stuff like that. I just need to figure out how I'm going to do this. I can't hold any inventory really, so I've got to work hard at getting very small items, or finding an affordable dropshipper.

I also ordered some shipping supplies, mostly priority mail. I think I"ll send most products via priority mail, since it has free shipping supplies. It costs a bit more, but it is much easier to ship out.