Hi All
So glad to have found this forum, hopefully I can assist with some questions at some point myself.
Some background:
I have a Niche business that has been operating for just over 2 years now. What I do is purchase die cast models all over the world, import them and then sell the direct to consumer. The business is run from home and it is only myself and one family member employee at the moment. Initially all sales were done through Facebook groups, which then also brought in customers who now buy on Facebook as well as buy / order direct from my house.
My business was started with very small loans of $250 from 6 different friends so a total of around $1500. That initial amount was used to purchase my first batch of stock which I sold and promptly repaid the loans back in 4 - 6 weeks with a $50 interest on each of the 6 loans. This was done three times over a period of 6 - 8 months as personally I was in a very bad position financially. After the first 8 -10 months of business I was in a position to not have to take loans from my friends anymore as I had built up stock of around $8000 with the profits made.
From 8 months to almost two years the business grew really well for me getting to a point where I was averaging around $10,000 a month in sales with a gross margin of around $5,000. My mistake was that I was allowing customers to book stock without payment in effect giving them on average a 30 day informal account. Unfortunately a lot of my bigger clients ran into some trouble financially which in turn pushed the 30 days to nearly 90 and some of which never paid at all which was devastating as my cash flow just got worse and worse to a point where I had to take more loans in order to continue purchasing new stock to sell while those orders were waiting to be paid. As of 20th December I have outstanding $7,500 outstanding in stock that needs to be paid which is coming in small drips and drabs.
In order to combat this I decided that I would start to move away from the Facebook sales and in turn launch an eCommerce website, my website launched exactly a month ago. Due to the website now taking funds immediately for orders a lot of my bigger clients have fallen away which has dropped my last months sales from $10,000 down to $4,500. It also put dent into my margins as the payment processing for credit cards etc is taking around 3.5% of the full order value.
Current Financial Status
Currently I have stock with a purchase value of just short of $30,000 and sales value of around $45,000. I have outstanding loans to be paid of almost $8000
Questions
I would like to know if there is anybody here that has been in a similar situation or would be able to assist with some advice on what would be the best for me going forward. Stick it out with the lower sales volumes through the eCommerce website and have a better cash flow while trying to find new customers who are willing to pay immediately for their purchases or try have the best of both worlds and use the website as well as offer some smaller "accounts" ?
Apologies as I do not know all the correct business jargon, everything I have done to this point has been self taught, decided I really needed some advice and thus the reason for this post.
I really look forward to your feedback, any input would be considered highly valuable.
Thank you :)
So glad to have found this forum, hopefully I can assist with some questions at some point myself.
Some background:
I have a Niche business that has been operating for just over 2 years now. What I do is purchase die cast models all over the world, import them and then sell the direct to consumer. The business is run from home and it is only myself and one family member employee at the moment. Initially all sales were done through Facebook groups, which then also brought in customers who now buy on Facebook as well as buy / order direct from my house.
My business was started with very small loans of $250 from 6 different friends so a total of around $1500. That initial amount was used to purchase my first batch of stock which I sold and promptly repaid the loans back in 4 - 6 weeks with a $50 interest on each of the 6 loans. This was done three times over a period of 6 - 8 months as personally I was in a very bad position financially. After the first 8 -10 months of business I was in a position to not have to take loans from my friends anymore as I had built up stock of around $8000 with the profits made.
From 8 months to almost two years the business grew really well for me getting to a point where I was averaging around $10,000 a month in sales with a gross margin of around $5,000. My mistake was that I was allowing customers to book stock without payment in effect giving them on average a 30 day informal account. Unfortunately a lot of my bigger clients ran into some trouble financially which in turn pushed the 30 days to nearly 90 and some of which never paid at all which was devastating as my cash flow just got worse and worse to a point where I had to take more loans in order to continue purchasing new stock to sell while those orders were waiting to be paid. As of 20th December I have outstanding $7,500 outstanding in stock that needs to be paid which is coming in small drips and drabs.
In order to combat this I decided that I would start to move away from the Facebook sales and in turn launch an eCommerce website, my website launched exactly a month ago. Due to the website now taking funds immediately for orders a lot of my bigger clients have fallen away which has dropped my last months sales from $10,000 down to $4,500. It also put dent into my margins as the payment processing for credit cards etc is taking around 3.5% of the full order value.
Current Financial Status
Currently I have stock with a purchase value of just short of $30,000 and sales value of around $45,000. I have outstanding loans to be paid of almost $8000
Questions
I would like to know if there is anybody here that has been in a similar situation or would be able to assist with some advice on what would be the best for me going forward. Stick it out with the lower sales volumes through the eCommerce website and have a better cash flow while trying to find new customers who are willing to pay immediately for their purchases or try have the best of both worlds and use the website as well as offer some smaller "accounts" ?
Apologies as I do not know all the correct business jargon, everything I have done to this point has been self taught, decided I really needed some advice and thus the reason for this post.
I really look forward to your feedback, any input would be considered highly valuable.
Thank you :)
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