Thinking of starting up a new business, any comments on my ideas? *Canadian input needed*

[RaynorWolfcastle]

I've been looking for some Samsung Original PC3200 RAM in Canada for awhile, and I haven't been successful in finding it anywhere. So this morning I woke up and had (what I think is) a great idea. I'm thinking of starting a new business that targets the computer tweakers. See the problem I've had so far is that while there are many shops in the 'States that cater to overclockers, tweakers and modders, there are very few that do the same in Canada. Moreover, the stores that do sell high-end gear often charge an arm and a leg, it's often possible to get the same items from the US for cheaper even with taxes and duties. So I thought I could fill this void.

This is the gist of my idea: since I already know some programming, I figure I would be able to teach myself enough PHP and Perl to build myself a simple site, it would be hosted so I wouldn't have to worry about the physical server, the business would be run entirely over the Internet and out of my home.

I also have a contact (family friend) who owns a small computer store (that already has an online ordering system), he isn't, however into enthusiast-level gear. I'm thinking I might be able to work something out with him so that we could get some sort of referral deal worked out whereby if he doesn't have a specialized part he could refer customers to me for a commission and I could do the same for him.

Now this is all fine and dandy in theory but I have no clue as to whether there is a large enough market for this kind of store for me to make a profit. The upshot of this is that I could probably get a low interest start-up loan from the government and my start up costs would be very low. I'm thinking that I'll only need to pay for the Internet fees (bandwidth, hosting, domain name), I would probably need an artist to create a few graphics for my website, and a bit of inventory.

To create the website I would likely use Linux based software to minimize costs, and I would do all the programming and webmastering myself. Additionally, I don't need to pay myself right away since I'm an engineering student and will probably be finding myself an office job this summer. I am also thinking that I could start with a pretty limited range of products, namely high-end heatsinks, various fans, and high quality RAM, with the RAM being the focus. Eventually I could add other items, such as phase change cooling, water cooling, and maybe case modding equipment like cold cathodes.

These are the steps I can see myself taking if this turns out to be viable:
- Research the market and the existing players. I've done some informal research in that when I tried to find some stuff for myself I found it near impossible.
- Propose a business alliance with my contact who owns a computer store
- Teach myself PHP, (I already know HTML), brush up on Perl since I have only very limited experience. Read up on Internet security and B2C website design.
- Create website and beta-test
- Get govt. loan, reseller ID, register the business, get in touch with wholesalers to find a good supply of what the specialized parts I am looking for.
- Decide which items to stock initially and buy a small amount of inventory
- Open website, start selling to the public.

I figure this will probably be about a year before I actually start selling anything. Is there anything I have missed in there? Do you think this is doable for someone who is a full time student for 7 months a year? Is it possible to get this all done working only on a pert time basis?

Any other thoughts or suggestions are welcome

 

[JeffreyLebowski]

well as you said, people in canada can already get stuff cheaper from the states. How much cheaper, and convienent would you be to them, than going the way the do now??

 

[RaynorWolfcastle]

Originally posted by: JeffreyLebowski
well as you said, people in canada can already get stuff cheaper from the states. How much cheaper, and convienent would you be to them, than going the way the do now??

Well that's what I'll have to look into. Many US stores send only by UPS or Fedex, both of which kill any deals for Canadians by charging exorbitant brokerage fees, I'm hoping that's where I can save money. Also, I would be willing to work on relatively thin margins early on since the business wouldn't be my livelyhood. I'm hoping I could build up a solid customer base this way.

I definitely need to research that further though.

 

[RaynorWolfcastle]

anyone else?

 

[RaynorWolfcastle]

last bump

 

[TubStain]

<steals your idea.....runs away>



j/k im in the US. I think your most important goal should be to find out if there is a market. The technical part is easy. Go around colleges and stuff and speak to other CS/CE/EE ppl who might be interested, research research research the market and then venture into it.

Ensure you dont screw yourself in any legal stuff either, taxes, custom duties (if you buy from the US) etc.

Good luck!

 

[fonzinator]

First, your idea certainly has promise, provided you have an accurate industry analysis.

Second, how will you advertise? How will these Canadian hard-core tweakers find out about you?

Third, your selection of a wholesaler will be important. If they reside in the US, will there be any kind of duties/fees for shipping the wholesale goods to you in Canada? Or, does an adequate wholesaler already exist in Canada? My guess is that you will have multiple wholesalers for the different types of products you are looking at. You might try contacting some of the product companies and see if they will wholesale to you directly. Those are my thoughts

Edit: One last question...Have you estimated what your inventory startup costs would be?? They could be much higher than you think.

 

[RaynorWolfcastle]

I think your most important goal should be to find out if there is a market. Go around colleges and stuff and speak to other CS/CE/EE ppl who might be interested, research research research the market and then venture into it.

Well I'm studying EE at McGill, so I'd like to think that the fact that I found the need a new business like this is representative. Also, I hang around a Canadian hot deals forum and I get a similar impression from them, I will definitely have to do more resaerch on this, though.

Second, how will you advertise? How will these Canadian hard-core tweakers find out about you?

This is probably my biggest concern right now, getting the word out could be tricky. I'm thinking I'll put some money aside for a nice Opening Sale promotion and see if I can get them mentioned on some hot deals forums. I'll probably try and get an ad in some local computer papers too. This is about the extent of my ideas so far for advertising, keeping in mind that my budget will definitely be restrictive, getting the word out about my website would probably be the biggest problem

Third, your selection of a wholesaler will be important. If they reside in the US, will there be any kind of duties/fees for shipping the wholesale goods to you in Canada?

I'm hoping I can find a wholesaler in Canada that can provide me with these parts. Otherwise, I'll have to bring them in from the 'States, and there's a good chance I'll have to pay some duties on them since most are manufactured outside of the US and Mexico (hence NAFTA is not applicable).

Have you estimated what your inventory startup costs would be??

Yes I have. Like I said, I'll start up with little inventory. I'm thinking maybe $1500 worth of RAM and another $750 in heatsinks and fans. The nice thing about heatsinks and fans is that they aren't expensive items in general. Even a high end fan will only run you about $20 or so. I figure I'll need another $100 or so in shipping supplies and maybe another $2000 in the bank for various expenses and as a cushion. I'm thinking about $5000 should be plenty to get me up and running and fund an operation this small until it turns a profit. The beauty of a business so small is that apart from the registrations at the beginning, the only monthly cost is the webhosting.

 

[Mavrick]

That would be a good idea. I've been confronted to the fact that there are no resellers in Canada that sells specific high quality computer parts.

But since you're from the Montreal area, be aware that "La centrale informatique", or ShopLCI (shoplci.com) has opened its Internet branch, and their catalog is growing every week. They now keep Crucial, Corsair, Mushkin and kingston ram in stock, as well as many heatsink and cases. Make sure you can do better prices that they do before starting your business.

But it would be great to have a dealer in Canada
Good Luck!

 

[Crappopotamus]

computer shows own you. us companies actually come up here...

 

[zer0burn]

www.bigfootcomputers.com pm if u wanna know more Canadian stores for modding theres tons.

 

[RaynorWolfcastle]

Mavrick

But since you're from the Montreal area, be aware that "La centrale informatique", or ShopLCI (shoplci.com) has opened its Internet branch, and their catalog is growing every week. They now keep Crucial, Corsair, Mushkin and kingston ram in stock, as well as many heatsink and cases. Make sure you can do better prices that they do before starting your business

Actually, my contact who owns a computer store is part of the chain (he owns the franchise in the west end of Montreal). I hadn't realized that they started carrying Mushkin and Corsair... I guess I'd have to work it out with him so that I just get commission on the brands he does carry. Still, no sign of Samsung Original or of Twinmos on shopLCI, those were the two brands I was hoping to pick up.

computer shows own you. us companies actually come up here...

While nice, computer shows have entrance fees and are not permanent.

www.bigfootcomputers.com

Yeah, they're mainly the ones I was referring to when I said that the stores that do exist are Expensive (note the capital E). Case in point, look at the SLK-800A. $75?!?!?! it sells for about $35 USD in the 'States. Many more of their items have huge markups like that, mostly because they have very little competition in this market and can charge pretty much what they like. Other Canadian stores have better prices, but lack selection in the high-end/enthusiast products, I'm hoping to fill the gap between the two . Feel free to PM me those sites, though I'm pretty sure I know most of them since I've scoured the Internet pretty hard for Canadian sites.

With that being said, I still haven't found anyone that reliably sells Twinmos or Samsung Original RAM in Canada. I'm thinking that would be a good starting point, having exclusive products like that