Carrying on with our e-commerce series of posts where I’m going to share with you some of the practical knowledge I’ve learnt over the last few years. Today, I’m going to look at what you need when visiting those initial trade fairs, what are you expected to know, what will potential suppliers expect, and what to look out for? This post isn’t for those of you who already have a bricks and mortar store and are thinking of adding on an e-commerce element – it’s for those who are new to the world of retail.
You’ve decided to open an online store. You know there’s a market for the type of product you’re interested in selling (more on that all-important market research in a future post) – all you have to do is source the right stock at the right price and away you go – you think! Unfortunately, it can be a little more complicated than that – here’s a list of some of the things you’ll need to know before you get on the ‘plane to your first trade show.
15 Buying Tips For Trade Shows
- Register your business with the CRO ( if in Ireland). It costs about €20 and will convey that you’re serious about your business.
- Talk to your accountant before you register for VAT. Registering for VAT unnecessarily just leads to much more paperwork and hassle. The limits in Ireland are approx €35,000 for a service industry and €70,000 for sales (turnover). Do keep all your receipts in the event that you need to register for VAT half way during the year but if your business is starting from scratch, imagine a figure that will be your turnover and quarter it! Honestly – things take longer than you may think to get off the ground.
- How does the whole VAT thing work? If you have registered for VAT, every 2 months you will submit your VAT form showing the VAT payable and claimable. Payable VAT is that 23% of every item you sell to your customers (23% in Ireland). You can claim back all your VAT expenses (on invoices in the same country as you ie from Irish suppliers if in Ireland) when you do your VAT returns. If you have provided your European suppliers with your VAT number, they will not charge you VAT on your invoice. (Word of warning here – if you do have to register for VAT part way through a tax year, it is a major hassle trying to claim back European VAT by the way).
- If you haven’t registered for VAT, your European (and Irish) suppliers will charge you VAT on their invoices and the VAT is payable on their country’s rate, for example, UK is 20%. You may find that occasional larger suppliers at trade shows will not let you place an order with them if you are not registered for VAT.
- If you have registered for VAT and are selling to non-European customers, remember that you have to remove the VAT at the checkout and include the invoice in a plastic envelope on the exterior of the box. Different States in America charge different rates of tax and while there is a limit on a spend before tax is payable, the customer may be charged tax before they receive the goods.
- Bring lots of business cards to the trade shows.
- Ask if the supplier has a minimum order value before you start to place your order – some will be over €2,000 which is considerable when you are starting out.
- Don’t underestimate how long it can take to place your order too. I used to spend 2 days at a trade show, spending the first day scouting around and making my buying decisions. You then spend that evening looking at your lists again and deciding which suppliers to go with, spending the second day placing the orders.
- When compiling the budget for your new business, remember that all orders will be on proforma. That means that you will have to pay upfront for all your orders as a new customer and they will have to receive payment before they despatch, meaning that it could be 3 weeks between your money leaving your bank account and the stock arriving. All future orders will most likely be provided with 30 days credit.
- All suppliers will have a wholesale price list but not all will have a RRP list (recommended retail price). It will then be up to you to decide what to charge. Most retailers will multiply the wholesale price by 2 or 2.2.
- Many suppliers will have a minimum order on the number of items too, for example, you may have to order at least a dozen of each smaller item while larger items such as big pieces of furniture will be sold singly. Try to spread your ordering so that you don’t have too many of any single item in stock. If certain stock proves popular, you can always order them again.
- Check out the suppliers’ photography too – it will save you a lot of time if they will provide you with good quality images. Remember if it doesn’t look good on their website, it’s not going to look good on yours so will be very hard to sell on an e-commerce store. If their photography isn’t good, you’ll have to invest time (and perhaps money) in creating good images.
- Ask the suppliers if they are already selling to anyone in your country or region. Many will ask you for your whereabouts anyway (out of respect to their existing clients) and they may not supply you if a competitor is close by geographically. However, if they are not supplying to your country, it can be worth asking for exclusivity for a season if you are placing a big order – this will help you with creating news and with getting free press coverage.
- Remember to add the cost of shipping from the supplier’s country to you! Many suppliers calculate it as a percentage of the overall total, others will add it onto the invoice later. Some won’t invoice you for it and you’ll have to pay the courier when it arrives so do enquire.
- Remember to ask the supplier what their best selling or most popular items are. Look around, are other shop owners from other countries placing orders too?
I hope this gives you an idea of what to think about and look out for if you are heading to your first trade show. Do ask any questions in the comment box below. If you have an online store and have anything to add, I’d really appreciate if you could contribute to the discussion