IT distribution in Europe or how we started our business - Part 3
So, in my story I stopped at the moment when we decided to start a new company ( Part 2 ).
Now, from the height of a certain experience, I understand how ambitious and impulsive we were. Our business plan was based only on fragile connections and guesses, which were not supported by cold calculation and concrete figures. But as they say, “whoever does not risk, he does not drink champagne” . People with whom I am in business now or just employees of our company often ask questions - how hard was it to organize your startup from scratch and even in a foreign country and is it really worth it? I answer them quite simply - if you have a good job that you appreciate and that you like, do not even think about your business. A person looking from the side sees the finished result, but the process itself is of no interest to anyone, and in fact all the main work in most cases is hidden “behind the screen”. It is also far from a fact that if it turned out for me, then all other things being equal it will work out for you. Ask yourself a simple question: “ Am I ready to work 7 days a week, 18 hours a day for a salary of $ 500, while knowing that the company is sinking smoothly in shifting sands, along with all the savings and the bill before closing already goes for weeks? ". I think this can only be a dream in a terrible dream, but this is how it all began with us, and that’s what the beginner’s weekdays look like.
')
Now various trainings in the style of “attend 2 classes and we will teach how to become a millionaire” have become very popular. In such cases, I hold a strict opinion - it is impossible to teach to be a businessman - it is either there or not, there is no third option. Not a dozen Czech startups “collapsed” before my eyes , because finding a place in the sun, when no decent company can officially hire you, is quite problematic. The ideas were completely different from baking home-made cakes to the construction of turnkey houses, but only a few survived, only confirming the sad statistics.
After a month of preparatory work, the main paperwork was completed, the office was found, office and technical equipment was purchased. It remains for the small - to get the official distribution of brands that interest us. Our choice fell on 3 types of products: DuneHD media players , Archos tablets and, at the request of the network purchaser, Amazon Kindle readers. It was on the reading room that we had high hopes , because, no matter how surprising it might sound, the demand exceeded the supply, and this product is still “torn off with hands” in almost any quantity, no matter how imported it is. The problem was only big competition from both major players and small online stores that brought them from the USA or Germany and exhibited with a minimum markup just to be first on Heureka - analogue of Yandex Market , respectively, reducing distributors' earnings, because we were only intermediate link on the way to the store shelves. According to my calculations, in order to pay for the maintenance of the office and go into plus we needed to sell about 200 readers per month , the earnings on one device averaged $ 25-30. We began to look for ways to take the goods from the United States most profitably.
After going through several options, they stopped at the Shipito service. The company offered services of storage and consolidation (repacking) of goods in one package to save space, respectively, and reduce shipping costs. The second task that had to be addressed was wholesale purchases from Amazon . Maybe not everyone knows, but it is almost impossible to buy Kindle readers in the amount of 50pcs or more from Amazon , as there are units for sale in one hand. Creating a second account and connecting additional credit cards solves the issue only for a while, but after processing the order, a notification arrives that the goods will not be shipped. I also tried to call the department for working with major customers of the Amazon company, but even there failure was waiting for me, they only worked with local companies. Trying to find information on the Internet, one day I came across an article where a person described the possibility of buying large quantities through American retailers. Just people went to different offices and bought everything that was available in this store. And then it dawned on me, I completely forgot about the other “points of sale”. A few minutes later I made an order at the American BestBuy , as it turned out there was also a limit, and for a much smaller amount - only 2 pieces in one order. The last chance for us was to try another order and wait. And the miracle happened, we found a gap (I think intentionally) in the BestBuy order system. A day later, on the way from the BestBuy central warehouse to the Shipito consolidation warehouse, our batch of 100 orders of 2 pieces each followed. Naturally, this entire operation took both temporary resources and increased the cost of goods, because the Shipito payment was taken not only for receiving the goods, but also for its distribution, that is, processing one box in which 200 pieces would cost us much cheaper rather than 100 boxes of 2pcs, but there was nothing to do, it was the only chance, all the more, according to my calculations, we still fit in the amount we need. After some time on our account lay photos of new, processed and ready-to-send Kindles. After 3 days the goods were delivered to the Czech Republic. The first batch was scattered in 2 days, inspired by this success and already counting future profits, we ordered the next one. This is where the problems started. The party came, and there was no order from the client. Having made a discount on the fact that the client did not have time to sell the last one, we began to wait, a month passed, and another followed him. We began to slowly panic. On the 3rd month, we received a message that the market purchase price had decreased and recalculating all our shipping costs again, we realized that this time we fly with the final price and fly quite seriously. Since there were absolutely no chances to sell 400 devices themselves, we had to “merge” them at reduced prices, thereby putting an end to the idea of ​​selling Kindles in the Czech Republic. As a result, almost 4 months of work and sleepless nights, and at the exit we were already in a deep minus.
There was no time to despair, we had a strong partner and signed contracts, so it was necessary to look for an alternative. It was found quite quickly - the brand Archos (the distributor of which, for some reason, we are still numbering, although we haven’t been selling it for a long time). But this move did not give the expected “exhaust”. Firstly, the brand itself turned out to be of very poor quality with a marriage percentage reaching up to 30%.
The distribution price policy and after-sales service was also poorly organized. We sold the first batch of 500 pieces for almost half a year by hook or by crook, both in minus and plus, having worn out with this order and realizing that the business of selling tablets is very dreary and non-profit business for small companies. As for the current situation, it is simply unreal, since the market is overflowing with Chinese competitors and, realizing this, “A” brands began to produce tablets in the low price segment, almost completely squeezing other manufacturers out of it. The last party with the marriage left us not so long ago and we, having crossed ourselves, were able to exhale.
For us, the first year was very difficult, it was a lot of mistakes and wrong steps. But nevertheless one thing we succeeded and succeeded very successfully and unexpectedly, but I will tell about it in the next part.
Now, from the height of a certain experience, I understand how ambitious and impulsive we were. Our business plan was based only on fragile connections and guesses, which were not supported by cold calculation and concrete figures. But as they say, “whoever does not risk, he does not drink champagne” . People with whom I am in business now or just employees of our company often ask questions - how hard was it to organize your startup from scratch and even in a foreign country and is it really worth it? I answer them quite simply - if you have a good job that you appreciate and that you like, do not even think about your business. A person looking from the side sees the finished result, but the process itself is of no interest to anyone, and in fact all the main work in most cases is hidden “behind the screen”. It is also far from a fact that if it turned out for me, then all other things being equal it will work out for you. Ask yourself a simple question: “ Am I ready to work 7 days a week, 18 hours a day for a salary of $ 500, while knowing that the company is sinking smoothly in shifting sands, along with all the savings and the bill before closing already goes for weeks? ". I think this can only be a dream in a terrible dream, but this is how it all began with us, and that’s what the beginner’s weekdays look like.
')
Now various trainings in the style of “attend 2 classes and we will teach how to become a millionaire” have become very popular. In such cases, I hold a strict opinion - it is impossible to teach to be a businessman - it is either there or not, there is no third option. Not a dozen Czech startups “collapsed” before my eyes , because finding a place in the sun, when no decent company can officially hire you, is quite problematic. The ideas were completely different from baking home-made cakes to the construction of turnkey houses, but only a few survived, only confirming the sad statistics.
After a month of preparatory work, the main paperwork was completed, the office was found, office and technical equipment was purchased. It remains for the small - to get the official distribution of brands that interest us. Our choice fell on 3 types of products: DuneHD media players , Archos tablets and, at the request of the network purchaser, Amazon Kindle readers. It was on the reading room that we had high hopes , because, no matter how surprising it might sound, the demand exceeded the supply, and this product is still “torn off with hands” in almost any quantity, no matter how imported it is. The problem was only big competition from both major players and small online stores that brought them from the USA or Germany and exhibited with a minimum markup just to be first on Heureka - analogue of Yandex Market , respectively, reducing distributors' earnings, because we were only intermediate link on the way to the store shelves. According to my calculations, in order to pay for the maintenance of the office and go into plus we needed to sell about 200 readers per month , the earnings on one device averaged $ 25-30. We began to look for ways to take the goods from the United States most profitably.
After going through several options, they stopped at the Shipito service. The company offered services of storage and consolidation (repacking) of goods in one package to save space, respectively, and reduce shipping costs. The second task that had to be addressed was wholesale purchases from Amazon . Maybe not everyone knows, but it is almost impossible to buy Kindle readers in the amount of 50pcs or more from Amazon , as there are units for sale in one hand. Creating a second account and connecting additional credit cards solves the issue only for a while, but after processing the order, a notification arrives that the goods will not be shipped. I also tried to call the department for working with major customers of the Amazon company, but even there failure was waiting for me, they only worked with local companies. Trying to find information on the Internet, one day I came across an article where a person described the possibility of buying large quantities through American retailers. Just people went to different offices and bought everything that was available in this store. And then it dawned on me, I completely forgot about the other “points of sale”. A few minutes later I made an order at the American BestBuy , as it turned out there was also a limit, and for a much smaller amount - only 2 pieces in one order. The last chance for us was to try another order and wait. And the miracle happened, we found a gap (I think intentionally) in the BestBuy order system. A day later, on the way from the BestBuy central warehouse to the Shipito consolidation warehouse, our batch of 100 orders of 2 pieces each followed. Naturally, this entire operation took both temporary resources and increased the cost of goods, because the Shipito payment was taken not only for receiving the goods, but also for its distribution, that is, processing one box in which 200 pieces would cost us much cheaper rather than 100 boxes of 2pcs, but there was nothing to do, it was the only chance, all the more, according to my calculations, we still fit in the amount we need. After some time on our account lay photos of new, processed and ready-to-send Kindles. After 3 days the goods were delivered to the Czech Republic. The first batch was scattered in 2 days, inspired by this success and already counting future profits, we ordered the next one. This is where the problems started. The party came, and there was no order from the client. Having made a discount on the fact that the client did not have time to sell the last one, we began to wait, a month passed, and another followed him. We began to slowly panic. On the 3rd month, we received a message that the market purchase price had decreased and recalculating all our shipping costs again, we realized that this time we fly with the final price and fly quite seriously. Since there were absolutely no chances to sell 400 devices themselves, we had to “merge” them at reduced prices, thereby putting an end to the idea of ​​selling Kindles in the Czech Republic. As a result, almost 4 months of work and sleepless nights, and at the exit we were already in a deep minus.
There was no time to despair, we had a strong partner and signed contracts, so it was necessary to look for an alternative. It was found quite quickly - the brand Archos (the distributor of which, for some reason, we are still numbering, although we haven’t been selling it for a long time). But this move did not give the expected “exhaust”. Firstly, the brand itself turned out to be of very poor quality with a marriage percentage reaching up to 30%.
The distribution price policy and after-sales service was also poorly organized. We sold the first batch of 500 pieces for almost half a year by hook or by crook, both in minus and plus, having worn out with this order and realizing that the business of selling tablets is very dreary and non-profit business for small companies. As for the current situation, it is simply unreal, since the market is overflowing with Chinese competitors and, realizing this, “A” brands began to produce tablets in the low price segment, almost completely squeezing other manufacturers out of it. The last party with the marriage left us not so long ago and we, having crossed ourselves, were able to exhale.
For us, the first year was very difficult, it was a lot of mistakes and wrong steps. But nevertheless one thing we succeeded and succeeded very successfully and unexpectedly, but I will tell about it in the next part.
Source: https://habr.com/ru/post/247353/
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