|
Electronics! Yeah, that’s what I want to sell!
For guys and gals alike, our heads start to spin as we think about terabytes of memory for our iPods, the latest Dell Computer desktop with a super large flat screen monitor, or maybe that $8,000 surround sound system with an 80” Plasma TV. When I began looking for a business to get started with, my mind leaped tall buildings with a single bound towards the electronics industry. Why? Because not only could I make a huge profit by providing something that is attractive to people from all walks of life, but I could buy some of this stuff for myself at HUGE DISCOUNTS over what I could find it for on eBay.
Why did I believe this? Well obviously if someone is selling something for $1,000, then they are paying a lot less and making a huge profit. Let’s take a quick look at Digital Cameras. I wanted to sell digital cameras in one of my earlier fund raising efforts for my daughter’s trip to Australia as a Student Ambassador with the People to People organization. I also wanted to buy a really cool digital camera. I love to take pictures (always have). I even used to own a Cannon A-1 35mm SLR. That was big stuff in the old days. So I take a look at Wal-Mart’s prices for digital cameras. For sake of example, let’s look at the Canon EOS 20D. 8.2MP of pure “wish list” camera. Wal-Mart has this camera listed at $1,599 ($1,443 after rebate online). Pricy! So I wonder, what’s this camera going for now days on eBay? In checking the completed auction listings, I find $1,050 for complete camera, $1,250 for camera body only, and a bunch of cameras not sold with “Buy It Now” options of anywhere from $1,200 to $2,500 (but all were power sellers) depending on what they were offering. The camera that sold for $1,050 probably did so without much profit (only has a feedback score of 59).
 |
So I have Wal-Mart at $1,443 and eBay at probably $1,200 or so. Since I have ordered a few things from B&H before, I take a quick look at their catalog. Hummmm. $1,199.95 after rebate. Not making any progress here.
Target, Best Buy, CompUSA, Circuit City…..No bargains there either. OK. These guys all had to get their products from somewhere, so I decide to contact several of the Camera companies directly (after all, I want to sell digital cameras). This must be where all of these folks order from. Well, all of the companies do not want to deal with small companies, however, I learn from one camera supplier that a company called Tech Data Corporation handles distribution of their cameras for smaller businesses. After the signup and approval process, I finally log in, only to find that the price of their cameras does not even compete with Wal-Mart. WHAT GIVES????
One simple word. QUANTITY. There is such huge competition in electronics that the margins are barely 10%. Unless you have the ability to buy several hundred cameras, then you have no prospect of competing in the new camera market. So what are your alternatives?
eBay and PayPal are registered trademarks of the eBay Corporation. Other product and company names mentioned in the Site may be the trademarks of their respective owners. eBay does not endorse, nor participate in the content, marketing or distribution of this website of its contents. Published and copyrighted in the United States, 2005-2006 by Scent of Success, Independence, MO 64057. All rights reserved under international copyright conventions. No part of this website (except hypertext html links and html examples) may be reproduced or utilized in any form, or by any means, electronic or mechanical, including photocopying, recording, or by any information media.