Gross Sales > Net Profit when you're first starting out.

**ceo77** · 08-27-2007 08:54 AM

For the past 8 months the only thing i've been worried about is net profits. So i stress to find suppliers with cheap prices. The "gold" suppliers like Ingram Micro, Tech Data, D&H ect. (I sell computers and IT equipment by the way) wont touch me because I'm not as established. Never mind getting a partnership with Apple or HP. I was too worried about net profits so if I get a Laptop for $569.00 I would mark it up to at least $650.00 even though you could get it for less. Then end result is, I sold less and kept my gross sales down, which hurts my credibility when It comes time to get a loan or credit. Then it finally dawned on me that I should just worry about gross sales. Right now about 90% of the stuff i've sold, I haven't made any profits but My gross sales have increased. When I put together my business plan and start applying for loans in March or April, I will have solid numbers to go off. I make enough money at my day job and my operating costs are low enough to where I can sustain my company without making any profits for as long as it takes. In march I plan on applying for a 250k loan which will allow me to quit my job and work on this full time.

**akula** · 08-27-2007 08:57 AM

sure..I see your problem. It's gonna continue happening unless you make changes. were you looking for feedback?

**ceo77** · 08-27-2007 09:10 AM

Originally Posted by akula

sure..I see your problem. It's gonna continue happening unless you make changes. were you looking for feedback?

Not really looking for feedback, just opinions maybe. The changes I made were to simply focus on sales volume instead of making a profit until get get established enough to get a loan. I want to quit my day job but I let that get in the way of looking at the bigger picture. Marking up stuff to make a profit was slowing me down. Now that I'm selling low I'm moving more products and i'm on pace to gross 300k by the end of they year and I only started selling in April.

**just1guy** · 08-27-2007 09:43 AM

Opinion: If you are a small player in the computer industry, concentrate on the 'Value' part of VAR.

I'm small percentage owner in a $10 million a year gross revenue VAR in the Maryland area. We have huge lines of credit with Ingram and Tech Data. Even with that, we can rarely compete head to head price wise on specific product. Most our profit comes from value services such as consulting and configuration services. Vendors are realizing this and protecting accounts that drive 'solutions' not product sales and giving back end money to help out low initial margins.

I don't know what your suite of services and products are, but PM me and I'll be happy to give you some advice.

**ceo77** · 08-27-2007 10:11 AM

Originally Posted by just1guy

Opinion: If you are a small player in the computer industry, concentrate on the 'Value' part of VAR.

I'm small percentage owner in a $10 million a year gross revenue VAR in the Maryland area. We have huge lines of credit with Ingram and Tech Data. Even with that, we can rarely compete head to head price wise on specific product. Most our profit comes from value services such as consulting and configuration services. Vendors are realizing this and protecting accounts that drive 'solutions' not product sales and giving back end money to help out low initial margins.

I don't know what your suite of services and products are, but PM me and I'll be happy to give you some advice.

Thats my ultimate goal. I'm in the process of upgrading my company to become a Microsoft Certified Partner. I just got my A+ certification as well. I have a few customers in the caribbean as well.

**silversurfer** · 08-27-2007 10:33 AM

I agree with Just1guy, what he says makes sense. I think it's insane to compete for pricing with any commodity item available from Wal-Mart or Wal-Martized retail.

**Paint and Air Sportz** · 08-27-2007 12:20 PM

I was in the same postion just trying to move product to make my sales reps like me, and then i started getting returns, dead products, ect... and i was no long breaking even i was loosing money.

**Gaulkin** · 08-27-2007 02:39 PM

Your biggest problem is your competing on price. This will kill any small business that imports anything. Ive been reading up myself on importing and exporting lately. The key to surviving as a small business in importing is to bring in product that is innovative and fresh to the market your currently in. If you continue to compete on price your business will fail. You want to bring in a new product for one reason and that is recognition. If you bring in something new and its a good product then hopefully a bigger company will come along and take the idea and market it for you.