[Archangel]

Not that I am in an epiphany....and want to start my own brick and mortar plasma business...but I thought some answers might be enlightening....not only on the process but also on dealing with present day retailers.

1.) First off where does one go for info...how to's and all.... if he did have the inclination to start a business in the consumer electronic field specializing in plasma and flat panel displays...and had no previous actual experience within the field ??

I mean would it just be the Small Business Admin....or is there specialized version. CEDIA is more to the installation and set-up side....what about just selling.

2.) How does one....once he establishes a business...become an authorized seller for the big boys...i.e. Sony...Panasonic...Pioneer...etc.

If you purchase a panel from a manufacturer wholesale....what difference does it make to them what you retail it for ?? I mean it is your profit margin...the manufacturer already got its money....do you not determine how low you want to sell these panels for ?? Or do some manufacturers require you to sell the panel at a fixed...or I should say a no lower than price point ?

3.) If you have a 7 day return policy....what happens to the returned panels ?

Does the manufacturer buy them back from you...or do you have an opened box sale ?

4.) How does the repair process work ?

Do you just let your customers deal with the manufacturer ?....or do you become a conduit between customer and manufacturer repair department....does that make you a FedEx inbetween...or do you plan on making weekly trips to the repair center...hoping that there is one located within 100 miles of your store.

5.) If you live in an average U.S. big city....more of a outer area neighborhood....not city chique like Manhattan or Beverly Hills....on average what would be a start-up cost ?

 

[Nez]

You have a lot of good questions. Perhaps start by putting together a business plan. This will answer several of the questions you have and give you guidance on where to begin. Also, contact your local chamber of commerce or similar organization. They should be able to give you an idea on typical costs for facilities, etc. in specific areas.

 

[3.1415926 pi]

1) I'd go to the SBA in your area an see if there is an Electronics Retail Association. You should be able to glean some info on what the electronic retail stores are like in your area. It should give you a feel for what their selling, and help you to gage what type of interest there is for the products you wish to sell.


2) That question can best be answered by those particular companies you wish to deal with. They will give you the info you need to sell their products.

Such as FOB, net thirty, warranties, insurance...etc.

You alone, determine your profit margin.

That can be predicated on a number of factors..How much do you wish to make for salary, your rent, your helps salary, utilities, insurance, shipping, setting up and maintaining a web site, taxes, etc..


3) Usually you would have some type of agreement with the manufacturer with regard to the return of these units if they are defective, like, who picks up the unit if it's defective. Now, with your 7 day return policy, you may have to sell it as an open box and eat the some of the profit if there is nothing wrong , and they just wish to exchange. This may be avoided if you are just the middleman, another words, you carry no inventory. You just place the order ,the company you call, ships it to whomever, and they will accept responsibility for shipping either way. You will have to eat some of the shipping costs, but that should be covered in your profit margin, and considered a cost of doing business.


4) Again, that is something that you will have top discuss with the people you are buying it from. They will explain what you need to know about repair.



Lastly, but not least...How much bucks ya got to start this venture??!!! Most businesses fail within the first year because of cash flow problems.

Ask yourself, am I willing to work LOOOOOOONNNNGGGGGG hours to MAKE THIS COMPANY WORK??

Will I be able to compete in the market place where I wish to start my new venture??!!

Will I be able to give better service at a better price, than my already established competition??!!

Am I willing to deal with the public on a daily basis, selling very expensive toys, and deal with their wants, desires, and craziness?!!!!!


My friend, as a person who has been in business for himself for 30 years, I've just scratched the surface of what you're going to be dealing with everyday.

It has been very rewarding, but after 30 years, I sold everything, took my money, and RAN like the wind!!!!!!!!!!!!!!!!!!!!


I now work for someone else; work half as much, which now means I have a life; I let them worry about the business, and enjoy my weekends, and all my new toys!!!

Good fortune in your future endevors.

VB

 

[quad user]

The survival rate for a brick and mortar plasma only business is between slim and none... and slim has left the building. The only way it could survive would be in conjunction with a high-end audio equipment boutique store in a MAJOR metropolitan location. Here are the problems:


1) Too much competition from the big electronics chain stores. They have purchasing power that a boutique store doesn't, so you'll pay more for the product and you'll have to sell it for more. IF you can get product from the manufacturers you want to sell.


2) Too much competition from the internet. Save $$$ thousands... no sales tax... and it's delivered to your front door.


3) Too few customers. Plasmas attract a very small percentage of the overall market. Maybe you would survive in New York or LA... if you could afford to pay for the high overhead that bricks and mortar requires. (Lease payments, personnel costs, insurance, etc., etc.)


4) The survival rate for new businesses is dismal. At least half are out of business after four years. Do you LIKE those odds?


If you're serious about starting a small business you will need to fund a large part of it either with your own money or money from investors. The SBA will only loan you a portion and only if you have a viable plan. You need to put together a comprehensive pro-forma business plan to show investors and the SBA. My guess on start-up costs? At least $500K for the first six months and probably $750K for the first year, assuming you somehow find a way to become profitable in that time.

 

[technofan]

B&M stores in big chain such as CC and BB has the the edge of getting the plasmas at major wholesale price that a smaller Guy cant get. The small internet stores get the same plasma at a higher price but sell it at a lower price to attract customers. Many have no warehouse and simply order it from the manufacturers as custom orders comes in. (Some internet stores are known to do that and made false claims that the plasma is in stock so not to tie up cash flow) A possible way to be successful as a small B&M is to sell the lower end flat panels (eg Tatung,Sampo,Akai etc) at a good busy location. I saw those 42" ED plasma for around $2500 now at BJ wholesale club. Excellent customer service can beat lower prices alone at big impersonal chain stores. This is the only way many small Mom and Pop hardware stores survive! Beware of the fact that 3 out of 4 business fail in the first year!