Reselling is quite a growing area for points and miles aficionados. It's something that I have flirted with once or twice as an amature, but never really stuck for me. Based on my knowledge of reselling, the learning curve tends to be using eBay initially, and manually selling each product, this then evolves into using a fulfillment center in order to scale.
The reason I never jumped headfirst into Reselling is that even at scale I don't love the margins, and I don't love the risks that come with having a low margin product. For example, if you sell technology then a product change (EG a new version of a laptop) can force you to firesale your product, and if you have scaled inventory up, this could be a big hit.
However, I like aspects of reselling, such as:
I wonder if we can take these reseller skills and leverage the margins by selling our own product instead? The evolution of that concept would be:
Stage 1 Sell directly (akin to the eBay days)
Stage 2 Outsource to fulfillment (can FBA, Sears, et al fulfill a product we build?)
Stage 3 Introduce Affiliate sales
This process has a ramp up time, Stage 1 is more labor intensive than reselling, because you are both creating a product and slowly selling it. Higher margins offset this, but it remains a time of 'growth'. However, once you reach Stage 2 you are in a place where you are taking hands off the operation, and it becomes more self maintaining. Stage 3 is a great place, as you start to 'play the bank' and let others do the work for a cut of the profit.
Implementation
A great choice for this might be a book, as you only 'manufacture' once. An online course has similar scope. However both do have a considerable front load in terms of effort. Instead, I'm considering selling a product that could be made to order as a test run. It's actually a cosmetic product, and I'm going to check into any regulations required before I do.
The advantage of a cosmetic product is that it is small (easy to store inventory, easy to ship) it has incredible markup, and low start up costs. I think we could build the company for less than $100, but I might want to put some money into the project in order to acquire some branding and professional website images.
Challenges
Customer acquisition - one does not simply build a website and make sales. SEO is required, and paid advertising. An alternative to paying upfront is to pay on success basis (build a site and offer affiliate bonuses to established sites in a niche).
Conclusion
I like this concept as it has very low startup costs, and if built as a brand it can scale. While I intend to start out with a product I want something that can grow beyond that should a customer base be developed. I'm putting this on my medium term goal radar, which means I'd like to have it rolled out in 6 months.
Most importantly, I think it is critical that people who enjoy the points and miles game are constantly thinking for the next big thing, and perhaps that doesn't involve points and miles... have any of you tried something like this before?
The reason I never jumped headfirst into Reselling is that even at scale I don't love the margins, and I don't love the risks that come with having a low margin product. For example, if you sell technology then a product change (EG a new version of a laptop) can force you to firesale your product, and if you have scaled inventory up, this could be a big hit.
However, I like aspects of reselling, such as:
- The entrepreneurial nature of it.
- The knowledge of supply/demand and pricing.
- Learning about the supply chain.
- Understanding a market segment.
I wonder if we can take these reseller skills and leverage the margins by selling our own product instead? The evolution of that concept would be:
Stage 1 Sell directly (akin to the eBay days)
Stage 2 Outsource to fulfillment (can FBA, Sears, et al fulfill a product we build?)
Stage 3 Introduce Affiliate sales
This process has a ramp up time, Stage 1 is more labor intensive than reselling, because you are both creating a product and slowly selling it. Higher margins offset this, but it remains a time of 'growth'. However, once you reach Stage 2 you are in a place where you are taking hands off the operation, and it becomes more self maintaining. Stage 3 is a great place, as you start to 'play the bank' and let others do the work for a cut of the profit.
Implementation
A great choice for this might be a book, as you only 'manufacture' once. An online course has similar scope. However both do have a considerable front load in terms of effort. Instead, I'm considering selling a product that could be made to order as a test run. It's actually a cosmetic product, and I'm going to check into any regulations required before I do.
The advantage of a cosmetic product is that it is small (easy to store inventory, easy to ship) it has incredible markup, and low start up costs. I think we could build the company for less than $100, but I might want to put some money into the project in order to acquire some branding and professional website images.
Challenges
Customer acquisition - one does not simply build a website and make sales. SEO is required, and paid advertising. An alternative to paying upfront is to pay on success basis (build a site and offer affiliate bonuses to established sites in a niche).
Conclusion
I like this concept as it has very low startup costs, and if built as a brand it can scale. While I intend to start out with a product I want something that can grow beyond that should a customer base be developed. I'm putting this on my medium term goal radar, which means I'd like to have it rolled out in 6 months.
Most importantly, I think it is critical that people who enjoy the points and miles game are constantly thinking for the next big thing, and perhaps that doesn't involve points and miles... have any of you tried something like this before?
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