I want to get serious with my business, but I don't know how

[Twiggy]

Hi,

I'm a long time lurker and a first time poster-ok technically this is my 2nd post. Anyways I really enjoy this site and I've read some really good discussions. I hope someone here can give me some advice on how to start my business opportunity right. I'm 16 and I want to sell computer components, eventually sell rigs(PCs that I build) etc. I have my whole business planned out. Problem is I want to really get serious with it (legally and stuff), but I don't know how.

I've sold stuff on eBay and I want to start there first, selling wholesale parts -

• 1st problem I don't want a massive bulks of wholesale but light bulks that I can afford for say under $500.
• 2nd I know you need a tax ID number or something to buy from wholesalers, where and how do I get that?
• And something about a partnering with wholesalers they wouldn't waste their time on a 16 yr old and I don't even think I can even buy from them at 16.
• Other legal things that I'm too confused to even ask because I don't know what they are lol.

Any advice?

edit:Thx guys I've already been helped in this thread

[theprodigy101]

First question- why computer components?

[Twiggy]

I guess because I want to start off with the smaller stuff then to the bigger stuff. Besides I know how to get cheap parts for now since my budgets pretty small but I want to be able to buy them in lots eventually

Or if your asking why I chose computer related things, its because I know my computer stuff and like it lol

[F360]

I think it would be hard to compete against companys such as Dell. What components are you talking about? AMD and other big names...or no-name China components?

Have you factored in the cost of the products+shipping+bank fee's+packaging+shipping and can still make a profit?

[Twiggy]

I meant I want to resell parts like CPUs, motherboards, DVD drives, etc. I just want to sell them after I buy them for cheap. I've already sold a few AMD and Intel CPU and made about $600 profit but its a pain to get the products the way I do. The MOBOs I sold make a great profit too.

I didn't even about competing with those big companies, I just want to be successful in my biz and have financial security, but you'll never know maybe I might be on the next PC 10 years from now

[Lex]

Your 16 you should be taking this time to learn about business. I dont think people will take you seriously if you want to run a shop but an ebay business may be ok.

[HPC]

The best thing, in my opinion, would be to open up an ebay store. It's low cost and it will help you build your seller reputation. That should also help you get more connections with ebay wholesalers.

Start small, and plan big.
Don't expect to make too much profit at first.

[UncleO]

It's very hard to get started and too buy from a legit, wholesaler. Also your going to take heavy losses at first.

[freshcutslawn]

I would say that you should see how things go. My best advice is pick one wholeseller and go with them for everything. If you continue to buy stuff from them they will take you more seriously. Also if you made a business plan you could show the people that think that a sixteen year old cant run a business and you'll be surprised.

[Twiggy]

Thanks for the advice everyone. I contacted the manufacturer of the product I wanted to sell and they gave me a list of all their legit drop shippers.

[nado]

Firstly, where are you located?

I've run a home-based computer business (soon to be rebranded as www.DropBuy.com.au) and have access to a range of wholesalers since I was 17ish.

I basically just operated through word of mouth and started up because I noticed that there were 4 computer businesses in a small town of 5000 and all were charging 100% markups when I knew online markups were pushing to get above 5%.

Advice:

1) You CANNOT compete online with computer parts (as said above the markups are well below 5%, so volume is the only way to make a decent profit)

2) People WILL treat you like a kid... just deal with it and act as serious as you possibly can. Get a business mentor if you want to take it to the next level.

I had no problems with wholesalers. All I needed was an ABN (business registration number here in Aus) and can buy however much or little as I want from my wholesalers. How I've operated is I ask for upfront payment from the customer (or at least a down-payment) and then I use that money to buy from the wholesaler... too easy Once you start getting enough business you can setup credit with the wholesaler (something I haven't got to yet).

You need a USP (unique selling point) too, as there are soo many people in the computer retail industry.

cheers
nathan

[adamg]

set up a oscommerce shop and ebay, although I dont think competiting on the web is the way to go as others have higher volumes/lower prices. You could probably make more from local businesses. Can you fix computers?

[nado]

Can you fix computers?

Another piece of advice I found here is that while computer services are more profitable than selling parts/computers, they:

1) take a lot of time
2) unless you can manage to have someone pay $30+ per every single hour you spent, then you almost end up losing money

e.g. I did a couple of repair and service jobs, and the local shops were charging at least $55 per hour. So I figured I'd charge $50 per hour. First couple of jobs I received evil glares from people obviously not happy in paying $50*hours to a 16-17 year old.

So I reduced it down to $30, but even then I would at times need to spend 10 hours fixing someone's computer and only charge them $100 (since $300 is a bit ridiculous).

Point of the story: either be prepared to spend a lot of time for little reward or outsource (something I plan on doing).

cheers
nathan

[chopper]

I am 16 as well, and i was interested in starting a business doing exactly what your propose.
But simple economies of scale...you cannot possibly compete against any big companys..for the same price it would cost you to build a moderate computer, dell can make one twice as good, with 17" LCD monitor.
The computer industry is possibly one of the worst places you can start out in business. Becuase its not like clothing, where something of the same material value can be sold twice as much as a competitors..becuase of brand name and whatever else. Computers and technology are priced because of their capabilities.
Computer repair is a better concept, becuase it is jsut a service the same as mowing the lawn or watever.

[nado]

I'm bored lol, so I'm gonna digout this post (no offense, some good points there)

But simple economies of scale...you cannot possibly compete against any big companys..for the same price it would cost you to build a moderate computer, dell can make one twice as good, with 17" LCD monitor.

True. Dell can keep prices really cheap as they buy in bulk and buy direct from the manufacturers, somtimes having their parts specifically designed for Dell.

I would though strongly disagree that Dell can make a computer twice as good. Do you know what parts they use inside a Dell (apart from the CPU)? ... I don't, and it's difficult to find out even if you do open the case and have a poke around.

They use generic chinese parts I assume. Whereas when I build a PC (either for sale or for myself) I know the best brands to use from years of research on review sites and forums.

The computer industry is possibly one of the worst places you can start out in business. Becuase its not like clothing, where something of the same material value can be sold twice as much as a competitors..becuase of brand name and whatever else. Computers and technology are priced because of their capabilities.

True it can be. It all depends on the competition and where people buy computer stuff from and get computer repairs from. e.g. as mention above my home-town of 5k people have 4 computer shops surviving.

But it can be a bit like the clothing industry. Heard of Alienware? (which ironically are owned by Dell now). They produce high-end gaming machines and are pretty damn expensive.

I agree though that if you wanted to stick solely to the standard computer business model of selling computers, selling parts and doing repairs it's pretty impossible for you to expand nationwide. Which is why you need to have some other tricks and offerings up your sleeve

cheers
nathan