Very slow boat from China!!

Having been on holiday for a week without a single connection to the wired world it appears that the boat from China is even slower than I previously thought. I was expecting to come home, logon and find an e-mail confirming that my first shipment was on its way - instead there was absolutely nothing, not even an e-mail explaining that it hadn't yet been shipped but would be soon!

Given that I am paying an intermediary to take away the hassle of dealing directly with suppliers in China I am becoming very frustrated with the amount of chasing I am having to do - I am wondering whether for my next shipment I just go to the factory directly - the main problem with doing this is sorting out all of the logistics of shipping etc. which is why I didn't do this in the first place. However given the amount of time I am spending chasing the intermediary I feel I might as well invest that time in learning about shipping and organise it myself! Can it be that hard?

Publicity material

Having been bombarded with e-mails from http://www.vistaprint.co.uk/ I finally succumbed to their promises of pretty much anything I wanted for free. I have ordered business cards, postcards and return address labels and somehow the free items ended up costing me about £15 by the time I had uploaded my own images and paid for postage.

My plan is to use the business cards as discount vouchers - I will hand these out to the target audience as well as sending them out with any initial orders for people to either use when they return or to give to their friends - I figure most people who are buying these types of items have friends who have children of similar ages and therefore hopefully word will spread.

I have also had offers from friends to distibute leaflets to their friends once the website is up and running - this has made me wonder whether I need to put a bit more effort into designing a really professional looking flyer (this goes against my ultra low-cost plan for development). I guess if this can be done simply by me spending a bit more time on it as opposed to hiring somebody to do it for me then I can still avoid the cost - something for me to investigate tonight is any free photoshop like art packages that I could use to design my brochure.

Market Research \ Pricing Decisions

So now the goods are soon to be on a boat from China I guess it's time for me to carry out some market research!! OK so maybe that's slightly the wrong order but hey better late than never. I guess actually what I am doing is more 'competitor research' rather than market research - I know the market is there what I need to do is work out the price-points for the various products. As my strategy is to provide the best price available for comparable products I am now spending time researching the price that my competitors to be are currently offering similar products for - this mainly involves searching on the web for these products - what I have noticed so far is that low headline product prices are often matched with higher delivery charges, this is a strategy I want to avoid (a bit like the Ryanair flight for 1p which ends up costing you £50 by the time you check-out).

I have decided a key task for the next week is to build a pricing model which will allocate all the costs associated with supplying the products to an end customer to each product, e.g. splitting the shipping cost across all of the products etc. This will give me the break even point for each product which will be a very useful starting point for deciding the price. I think the price will then be set by combining the profit margin I think is appropriate and by looking at what competitor's are charging.

Costs I definitely need to include are:

1. The cost of the item
2. Shipping
3. Import duty etc.
4. Post and packaging to the customer
5. Any payment commission for online processing (paypal etc.)
6. Website hosting
7. Marketing?
8. Labour?

Labour I am still unsure about, to start with labour will be me hence no external cost but I think I should factor something in for my time in order processing to give a realistic cost of supplying the goods and to future proof the cost models in case I decide to employ somebody to pack etc. in the future.

So that's my key task for the next week anyway, coming up with the prices that will be in place when the site is launched. (I will also be looking at accounting packages as discussed in previous posts and will be posting details of my findings here.)

Slow boat from China

Finally, after several chasing e-mails, and almost 2 months after placing my first order and making a deposit payment for it I have received word from China that my first shipment should be sailing from Ningbo on the 20th of June.

Having had a quick look at the shipping timetables to get an idea of shipping time it looks as though it should arrive in the UK after approximately 28 days - the items then have to be cleared through customs and transported to the warehouse in the UK. I reckon therefore that I should have the stock sometime in August - certainly in plenty of time for my target date of 1st October - if I get confirmation of the shipping and expected arrival date then I may have to consider pulling forward the opening date, after all there's no point in having the stock sitting around. However as previously stated I will only do this if I am happy that we are in a position to satisfactorily fulfill orders with the type of customer service we want to be proud of.

VAT Registration?

Today I have turned my thoughts to the money side of the business - more specifically accounting. I have decided that I want to implement some proper accounting software rather than try and run the business on a variety of spreadsheets.

I came across the following free piece of software from the guys at Sage www.tassoftware.co.uk/free/- I think the plan is that you pay for more complex add-ons such as a payroll system etc. but hopefully I can get by for now on the basic free piece. I will install the software over the coming days and post my findings here to let others know how it has gone.

The other question I am pondering right now is whether I need to register the company for VAT - from a quick look on the Inland Revenue website at http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm I think I can escape without registering for VAT at the moment as I will not be at the threshold of £68k turnover for a while yet. The exact wording is

Supplying goods or services within the UK. If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £68,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT. See the section in this guide on calculating your VAT taxable turnover.

So as I see it when I get close to £68k of sales in a year I will have to look at registering for VAT and hence charge VAT to customers and do all of the associated accounting for VAT, but for now I will place this on the list of things to monitor but not do.

Join our mailing list.

I forgot to say that for anybody who is interested in joining our mailing list in advance of our opening please send a mail to sales@jktoys.co.uk and we will keep you informed of our progress and even send a discount code for your first order as a thank you for your support.

Cheers
Jake http://www.jktoys.co.uk/

How do I get noticed?

The aim of JKToys.co.uk is to offer traditional wooden toys at the cheapest possible prices without compromising on quality.

Our first product line is going to comprise of wooden railway sets and associated accessories. As well as offering standard railway sets we are going to provide expansion kits which will allow a variety of interesting layouts to be built - these expansion packs will provide components at much better prices than buyin them individually.

The key question that is currently concerning me is how to spread the word of http://www.jktoys.co.uk/ in a cost effective way; in other words how to market the site. Options I am considering include:

1. Pay per click advertising


2. Setting up as an Amazon retailer


3. Setting up an ebay shop


4. Search engine optimisation - I definitely need to do more research into this area, there are plenty of companies offering the service but will it do what I need?


5. Local paper advertising


6. Niche market specific advertising.

This is something I am going to have to give serious consideration to over the next couple of weeks.

I have decided to set a target date of 1st October for the official opening of our e-commerce store - I think this will help focus the mind on the various tasks and decisions which need to be completed / made in order to hit the ground running with a smooth operation; I am very aware that to delay launching is preferable to launching with dodgy operations as bad press spreads quickly and I expect to only have one chance to impress each customer with our service. Key to minimising the marketing spend as discussed above will be to encourage repeat customers and personal referrals from satisfied customers - therefore customer service and satisfaction are my number one priority as I go through the job of working out the end to end process of order fulfilment. (obviously I'mbeing optimistic and planning for plenty of orders - if we only get 1 order a day I'm pretty confident customer service should be high!!)