If you had $10,000... (business question)

serving4theking said:

Let's say you own a business and have $10,000 to spend regularly on new inventory (or product) for your small business, and you have to choose between:

Product A.
PRO:
* You buy it cheap (for example $10 per item) and can sell it for $50 per item. That's 5x profit.
* Always can find wholesales selling it, never a problem with supply.

CON:
* Each of these $10 items takes up a lot of space.
* The demand is steady but not super.


Product B.
PRO:
* Each unit costs more (for example $100 per item) and you can sell it for $200 per item. That's 2x profit.
* Usually in demand, more so than the $10 items.

CON:
* Sometimes harder time finding from wholesalers.
* Less profit margin.

Now, one could buy 1000 units of Product A and if they all sell, it would produce $50,000. On the other hand, one could be 100 units of Product B and if they sell, it would produce $20,000.

What percentage of product A and product B would you buy and why?

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thenextlevel said:

serving4theking said:

Let's say you own a business and have $10,000 to spend regularly on new inventory (or product) for your small business, and you have to choose between:

Product A.
PRO:
* You buy it cheap (for example $10 per item) and can sell it for $50 per item. That's 5x profit.
* Always can find wholesales selling it, never a problem with supply.

CON:
* Each of these $10 items takes up a lot of space.
* The demand is steady but not super.


Product B.
PRO:
* Each unit costs more (for example $100 per item) and you can sell it for $200 per item. That's 2x profit.
* Usually in demand, more so than the $10 items.

CON:
* Sometimes harder time finding from wholesalers.
* Less profit margin.

Now, one could buy 1000 units of Product A and if they all sell, it would produce $50,000. On the other hand, one could be 100 units of Product B and if they sell, it would produce $20,000.

What percentage of product A and product B would you buy and why?

Click to expand...

40 percent A, 60 percent B.......diversify

Click to expand...

thenextlevel said:

40 percent A, 60 percent B.......diversify

Click to expand...

sheetskout said:

Take the one that has the least Inventory Cost.

see: Just In Time Invemtory Systems.

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bouwob said:

thenextlevel said:

40 percent A, 60 percent B.......diversify

Click to expand...

+1, on the first time around I would do 50/50 to see where your demand is and to see what garnishes your more profit over a months time.

That said prebuying inventory is always an iffy thing since if no one wants your product or can buy it cheaper somewhere else you are stuck with something that has no value.


If you can drop ship to begin with it would really be the way to go.

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