Business Start Up idea - thoughts?

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dmos87

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Hi Folks,

I have been toying with the idea of opening up a second hand baby furniture and equipment shop over the last number of months.

My key reason for this is that I see a big gap in the market at the moment for it. Many people cannot afford the prices offered for new equipment from retail stores and are either buying secondhand on websites like donedeal.ie, etc.

The idea would be to have a nice retail unit in a "young" and accessable commuter town. People specifically wishing to sell their baby items (cots, prams, high chairs, etc.) would visit the store and we would offer them a price for said item, depending on the quality of said item. We would then re-sell the item within the shop after smartening it up and making it appealing or doing repair work if necessary. We would also purchase items online advertised for sale and also sell these within the store.

I have researched rent costs within my area of choice and I would be able to negotiate a "trial rental period" with a short 3 month lease as there are a few unoccupied units there at present. If all goes well within the first 3 months I would have an option to continue renting the premise. If all does not go well, I would have stock I could sell online for cost price (hopefully). My area is a large commuter town with ample parking and the unit I am most interested in is v. close to a public car park. I still worry though if I should aim for city centre? No other shop like this exists at the moment anywhere - only second hand shops that carry everything from clothes and shoes, etc.. My store would be specifically baby equipment.

My key worries;

No.1) Registering said business, tax rates, etc. ensuring all is going well. I have no experience in setting up a new business. I have looked at the Fas course and if I feel there is enough reason to go ahead and take a chance at this, I will obviously do this course first. What I am wondering is - is there a lot to it? Could a rookie like myself manage it?

No.2) It would be financially backed mostly by myself (which is hugely scary) and possibly one other business owner looking for an opportunity. I would be rolling up my sleeves and doing all the work to get it off the ground, running the store, purchasing items, etc. Market research will help me determine prices to offer when buying and selling. What would the start-up figures of such a place be?

No.3) Most new mums tend to source hand-me-downs from family and friends for their expected arrival. It worries me that perhaps a second hand store might be overlooked. I need to point out that almost every mum I have spoken to about the idea has mentioned that they would prefer to sell their baby items and receive money instead of just simply "passing them on" to others. It does make sense - employment rates are low and many people are stuck for cash right now.

The shop would also offer some new low cost equipment that I will be tryin to source but all big items will be second hand.

Can I ask peoples ideas and opinions please?
 
It's an interesting idea.

If you are getting a premises rent-free for 3 months, then that certainly reduces the risk dramatically.

Are you working at the moment? You should not give up a job to do this, but if you are not working, then it's a great time to try it out.

The overall risk seems fairly low. The stock will not be expensive, and as you say, if it doesn't work out, you should be able to sell most of it online.

So, is there a valid business in it. I am not familiar with this market, so it's hard to know.

People will probably expect to pay around 50% of the price of new stuff.
That means that you will be paying around 25% of the price to buy it.

It seems like a lot of hard work. If you are buying new stuff, you just order it from a wholesaler and it's delivered. You pay for it two months later. With second hand stuff, you will spend a lot of time buying it. You will have to check it out. You will have to "smarten it up". That costs money in terms of wages.

Are you sure that none of the shops in the Coombe sell second hand baby equipment. I would guess that they do.

I suspect that your model may well be cut-price new stuff combined with very good quality, expensive, second-hand stuff.

You might not be paying cash for second-hand stuff, but giving them vouchers instead. This would reduce the cost to you substantially.

Check in the UK to see if similar shops exist.

I wouldn't bother too much with Fas. You should try to get a job in a commercial second hand shop and get real on the job experience. If you find a similar shop in the UK, you could be upfront with them. Offer to work for nothing to get experience of the business.

Brendan
 
Hi Brendan,

Thanks for taking the time to respond. I am currently in fulltime employment and would ideally NOT leave my job to begin with. I would hope to do most of the pre-buying from home in the evening (online, local ads, etc.), store them at home in my spare space and then set up shop. I would hire someone locally to run the shop and report to me. I work shifts at present so I think it could work well - when I am not at work I will be at the shop. I have no children so my time is my own, as is the same with my OH.

There are lots of similar businesses in the UK like this, however none that I know of in Ireland. At least, if there is they are not making themselves well-known! Obviously I will be doing market research by visiting all listed baby stores to see if they are selling second hand. As far as I am currently aware, this is not happening anywhere other than charity shops at present but I could be proven wrong.

The vouchers are an excellent idea, as is trading in, i.e. swopping items with customers. It could potentially work and lower costs substantially.

Overall, how big is the risk? It is my hard earned money and most of my current salary would be pumped into it to make it a success... obviously I get nervous at the thought of loosing it all. What Is the average cost to set up a new business? Registering, etc.?
 
I don't know where in Cork you are, but it would be well worth talking to the County Enterprise Board - here's a link to the Cork City one; there are also CEBs in South and West Cork, you can easily find them by Googling.

They can give you lots of assistance, some of it completely free, and the websites usually have good advice on starting a business. They also run subsidised training courses and offer mentoring.

It also might be useful to register with (or at least do a bit of lurking!) a forum such as that on rollercoaster.ie and get a sense of what parents think. One thing I would slightly wonder about is that whereas parents might be quite happy to sell baby furniture they have no further use for, how many would be as keen to buy "pre-loved" items?!

But I think it sounds like a good idea and I wish you the best with it.
 
Thanks for your input TreeTiger. It is a concern for me that perhaps parents to be might not be happy with "previously loved" equipment but most of the people I have spoken with have told me they would see no problem with it for the most part - obviously clothing, bottles, etc would be a no-go. I am talking the big equipment like buggies, cots, car seats, etc. for the most part all those I have asked who have had babies in the recession would have been happy to pick up second hand as cheaply as possible as long as it was in good condition. Most parents re-sell these using free ads and popping to a shop to get cash would suit them much better. I think with the recession a store like this would thrive. More babies have been born in the recession than ever before so there is definitely a market for it.

I have a name in mind and have checked on the CRO for any existing companies with the same name - none so far. It is definitely worth registering the business name now, but if I do, and I do not begin trading for some time, what fees will I face? Will I need to submit a tax report even if I have not traded yet?
 
Perhaps you could lok at the model used by second hand clothing shops, you bring in your designer clothes(baby equipment), agree a price with the store owner, they charge a commission (usually 50% for clothes) and contact you when it is sold, people would leave their goods with you so no outlay for stock,
 
G7979, an excellent idea. The only flaw would be that all items would need to be in excellent condition when brought into the store as I would not put them on display otherwise. I would want customers to feel that although the items are second hand, they are not dirty or damaged and look almost as new.

I am more than prepared to roll up my sleeves and put in the work and money provided I feel secure than this can work. I think it can, there is a market. The next step is research on the different brands and models, their retail prices, etc. which can all be done online.

I am considering purchasing a few items from the free ads and doing them up for re-sale myself before trying the store. If I earn any profit from doing this I can then put that money towards the store and I have a system in place that works.

Thank God people don't think I'm mad for suggesting this!!!
 
dmos87 said:
Thanks for your input TreeTiger. It is a concern for me that perhaps parents to be might not be happy with "previously loved" equipment but most of the people I have spoken with have told me they would see no problem with it for the most part - obviously clothing, bottles, etc would be a no-go. I am talking the big equipment like buggies, cots, car seats, etc. for the most part all those I have asked who have had babies in the recession would have been happy to pick up second hand as cheaply as possible as long as it was in good condition. Most parents re-sell these using free ads and popping to a shop to get cash would suit them much better. I think with the recession a store like this would thrive. More babies have been born in the recession than ever before so there is definitely a market for it.

I have a name in mind and have checked on the CRO for any existing companies with the same name - none so far. It is definitely worth registering the business name now, but if I do, and I do not begin trading for some time, what fees will I face? Will I need to submit a tax report even if I have not traded yet?
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One thing that leaps out at me,and I don't know if it applies to Ireland, but in the UK I'm pretty sure it is illegal to sell second hand car seats, and it is recommended that a new cot mattress is bought for each new baby because there is an increased risk from SIDS. A lot of people keep their second hand baby gear and pass it on to friends or family too, I know when I had my kid I got loads of stuff handed down to me, and we had plenty of cash for new stuff, it just seems like the done thing. Apart from those considerations, it sounds like a great idea, money is tight for everyone these days so it might work out for you. A three month trial would do no harm anyway! Good luck, I hope its a success for you!
 
glasto said:
One thing that leaps out at me,and I don't know if it applies to Ireland, but in the UK I'm pretty sure it is illegal to sell second hand car seats, and it is recommended that a new cot mattress is bought for each new baby because there is an increased risk from SIDS.
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Thanks Glasto for your input. I myself am wary about including car seats in the store but if I could perhaps purchase new ones but at a lower retail cost than larger shops I would be open to it. There is obviously a safety factor that would need to be looked into and it would leave me open to issues, so I would most likely avoid secondhand car seats. But thank you for mentioning it! As for new matresses, I would be looking to source them cheaply for new to add to cots so that is not an issue - I would consider that a must.

I have to stress I really want the items to be of good quality. I won't be buying items just to fill up the store. I want people to walk in and not realize its all second hand and be delighted when they realize it is!
 
dmos87 said:
I have a name in mind and have checked on the CRO for any existing companies with the same name - none so far. It is definitely worth registering the business name now, but if I do, and I do not begin trading for some time, what fees will I face? Will I need to submit a tax report even if I have not traded yet?
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Have you checked to see if the .com and .ie domain names are available as well? If all names are the same it's a bit more convenient for you.

If you're planning on setting up a limited company you would pay about €300 to have this done for you - you can do it yourself for about €100 if you can get a bit of help from someone who knows how to do it.
 
Business start up idea

dmos87 said:
My key worries;

No.1) Registering said business, tax rates, etc. ensuring all is going well. I have no experience in setting up a new business. I have looked at the Fas course and if I feel there is enough reason to go ahead and take a chance at this, I will obviously do this course first. What I am wondering is - is there a lot to it? Could a rookie like myself manage it?

No.2) It would be financially backed mostly by myself (which is hugely scary) and possibly one other business owner looking for an opportunity. I would be rolling up my sleeves and doing all the work to get it off the ground, running the store, purchasing items, etc. Market research will help me determine prices to offer when buying and selling. What would the start-up figures of such a place be?
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No. 1 - depending on a number of factors like expected sales and travel required, will inform as to register for VAT or incorporate a company. A company requires more compliance but is often a better model especially if there are other partners / investors.

No. 2 - the best way to work out your start-up costs would be to prepare a simple spreadsheet showing your costs over the first 12 months. You can estimate costs that you are not sure of. This should also show when you expect to start receiving cash from sales and /or will quickly determine how much money you need to invest or if the idea has potential.

If you would like some templates for that or chat about it you can send me a PM.

Best of luck
NumbrCrunchr
 
dmos87 said:
Can I ask peoples ideas and opinions please?
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I reckon there will be more sellers than buyers which will mean low profit margins. As you mention, people are strapped for cash and therefore would like to raise some by selling baby furniture. But people are often reluctant to buy second-hand baby furniture because they don't know its provenance. And there are also safety issues - if you sell a baby chair which collapses, are you liable to be sued? If it's a new chair then it's usually under warranty from the manufacturer but if it's second-hand it's something you should think of.
 
I'm sorry if this sounds negative but I'm honestly not sure there would really be a market for this at a volume that would be sufficient to make a profit.

I am currently knee deep in baby, toddler and small child land, as are almost all my friends and family.

There is a huge 'market' in passing on baby gear for free, either via friends and family or via websites like jumbletown.ie. Log on to the baby section of the website to see the volume of stuff that people are willing to give away for free, some in excellent condition.

I very much doubt that anyone who has babygear that they don't need and is in the financial position that they need to sell it rather than pass it on for free would be bothered to load it into the car, drive it to a store, unoad it, wait to have it checked out and be given say 25 quid for it, when they can spent 10 minutes at home uploading details and a pic onto gumtree.ie or rollercoaster.ie and have someone call to their home and give them 40/50 for it. I genuinely can't see a reason why they would accept less money for more hassle.

Similarly, why would someone drive to your shop and pay a mark up on second hand stuff when they can drive to someone's house and pay 'cost price' as it were plus have the opportunity to haggle (either in advance online or at the doorstep!)

You also have a potential major problem with liability I would imagine - what if you sell on a car seat based on it nver having been in a crash and then it turns out that it has and has somne unseen structural damage that causes it not to function properly in a crash situation thereby injuring the occupant? I can't see anyone buying a second hand car seat in a shop for that reason. You also can't sell second hand cot mattresses (they are not even allowed to be advertised as being given away for free on jumbletown.ie) and the cost of buying a second hand cot but a new mattress would hardly be worth it.

Also check out the competition in new goods - you can buy new high chairs, strollers, travel cots and booster seats in Asda in N Ireland for £25. You can get very cheap cots and other baby items in Ikea. It would be very hard to compete with that I would imagine.

Sorry - this all sounds very negative but I have a feeling that no one else who has given you advice on this thread is actually a potential supplier or customer for these type of products and I am not sure there is really a gap in the market that would generate profit in what you are suggesting.
 
To keep your costs low could you act more like an agent. You only pay the person who brought you the item to you when you sell it and you charge a commission of say 30%. Means you have no outlay for stock. You could get in a number of new mattress and sell them close to cost to make it worthwhile for a person to buy a cot.
My sister inlaw uses this type of system for wedding dress and Debs Dress in the North. They are very particular in the dresses they accept as they could have a shop full of dresses that would never sell. They have a shop full of top quality dresses with no stock cost.
 
txirimiri said:
I very much doubt that anyone who has babygear that they don't need and is in the financial position that they need to sell it rather than pass it on for free would be bothered to load it into the car, drive it to a store, unoad it, wait to have it checked out and be given say 25 quid for it, when they can spent 10 minutes at home uploading details and a pic onto gumtree.ie or rollercoaster.ie and have someone call to their home and give them 40/50 for it. I genuinely can't see a reason why they would accept less money for more hassle.
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babybay.ie started up in July with a similar idea to do what you propose to do but on an online only basis so they have a nationwide target market whereas you would be confined to people in your locality.

Best of luck with it though, always good to hear someone with new ideas.

There is a thread somewhere discussing the idea of opening a baby shop - you might find some useful info on that if you do a search.
 
By way of market research I asked my missus (who is due any day now and has furnished the small back bedroom with the most expensive baby gear she could find) if she would consider using second hand baby equipment if a shop sold such stuff.
The look of horror in her face told me her answer.

To be honest with you I can see very few expectant mothers buying second hand equipment. Yes, Ireland is in recession but I think your idea isn’t one that will float with mothers who have the same mindset as my missus.

I think she would see it as a stigma in front of her siblings and other friends who all compete for the best designer baby equipment. I am not sure if it is the mindset of all females but it is the mindset of the ones I know and I do not mix in particularly extravagant circles. I think my wife would go without critical surgery rather than be seen amount her friends with a lesser type pram/buggy/car seat. It all designer names with them…

Sorry if that isn’t what you want to hear…
 
The_Banker said:
By way of market research I asked my missus (who is due any day now and has furnished the small back bedroom with the most expensive baby gear she could find) if she would consider using second hand baby equipment if a shop sold such stuff.
The look of horror in her face told me her answer.

To be honest with you I can see very few expectant mothers buying second hand equipment. Yes, Ireland is in recession but I think your idea isn’t one that will float with mothers who have the same mindset as my missus.

I think she would see it as a stigma in front of her siblings and other friends who all compete for the best designer baby equipment. I am not sure if it is the mindset of all females but it is the mindset of the ones I know that I do not mix in particularly extravagant circles. I think my wife would go without critical surgery rather than be seen amount her friends with a lesser type pram/buggy/car seat. It all designer names with them…

Sorry if that isn’t what you want to hear…
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Thanks for the input Banker, this is why I decided to post my idea so all opinions are welcome :)

I can understand the stigma that is attached with second hand goods. What I am wondering is would she purchase the item second hand if;

a) It is a designer brand
b) In excellent Condition
c) There is no clue that it is in fact second hand
d) She could save herself over half of the actual cost

This is what I am aiming for really. I'm aiming at two markets - those who like to keep up with the Joneses but cannot afford to, and also those who just dont have the finances to buy new.
 
Unfortunately, I dont believe your target market exists
People will buy secondhand cars, books, bikes and furniture but only
want the best for their kids. Second hand clothes has always been a grey area. It goes against the grain.

I'm out !
 
While I admire your get up and go, Importer has hit the nail on the head. When it comes to your kids, you only want the best, and you would do without your self if need be. There would be a stigma attached rightly or wrongly to buy second hand goods no matter how up market. Odly enough, if a item were passed from a friend of mine, I dont think I would have the same reservations on it.
 
The_Banker said:
I think she would see it as a stigma in front of her siblings and other friends who all compete for the best designer baby equipment. I am not sure if it is the mindset of all females but it is the mindset of the ones I know and I do not mix in particularly extravagant circles. I think my wife would go without critical surgery rather than be seen amount her friends with a lesser type pram/buggy/car seat. It all designer names with them…
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Now we know why the country ended up in a mess, when non-designer equipment is considered to be a stigma.

I'm not criticising you, Banker. I live with one of these silly people as well.
 
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