Brendan, for your info and anyone else who's interested, it's not like we're losing money, we're just not making any. So, the two Phils and I are doing this for "fun" at the moment, in that hope that a couple of years down the track we might see some profit. That's not a whinge, I'm sure the guys agree, its fun doing something that we all enjoy and the Community is a great bonus.
The reason we don't make any money is actually quite simple:
1. The pricing was set too low by Guitarworx and Guitar Kits Direct from the start (and, as we know now, he went arse up). When I started, I had to keep in line with his prices (even though he wasn't even delivering on orders). If you've ever looked at similar kits in other Countries, they're $250+, not $100+.
2. To sell 100 kits a month, we need to order 200 a month, to cover all 50 models and ensure that we have 80% of kits in stock at all time. This will improve over time now we've "refined" the list of kits we'll stock. Also, we'll get a better picture of the quantity of kits we need to have every month.
3. We now have some new competitors popping up who seem to have gone through our catalogue and priced everything a few dollars cheaper (even though their shipping is a lot more). People will shop on price alone, so we are losing business to them.
Anyway, my biggest gripe is that there seems to be an eBay mentality to selling out there. That is, if you buy something for $70 and sell it for $100, you made $30. Anyone who's been in business knows that this is simply not true. By the time you've included all running costs, taxes, fees, advertising and other incidentals, you've probably made about $3. That's great if you're Coles or Woolworths, but not if you're just selling a few kits every day.
/rant.
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Gavmeister
