First off, lot of thanks to everybody that took time to offer their opinions and thoughts.
To those wondering what the structure of the business is. This is the structure of the business:
Obtain used computer/parts -----> cannibalize them into different parts, test their functionality -----> sort and categorizes the functional parts -----> Use these functional parts to build refurbished computers from scratch -----> sell these refurbished computers.
That is it in a nutshell.
For employees i prefer university students with concentrations in engineering, hard sciences, computer/IT. They are innovative, cheap, flexible work schedules, always having new ideas to teach you. The cons: they are perennially unreliable.
I will be moving to a warehouse near a technical/engineering college, this will put me in close proximity to the talent pool of university students to tap as employees. Also, the warehouse is close to the post office and a shipping docks/agencies-- which will come in handy for the shipment of my finished products. I already have detailed schematics of various workstations, storage structures, even the lighting setup for inside the warehouse.
With all these comes the increase overhead costs that will eat into my profit margins as
Wi30 pointed out here.
MY MAIN TARGET:
I prefer selling to 3rd world countries buyers than over ebay/amazon because of (1) less headache and (2) massive volume. If you are selling 200 computers online, that is a 200 potential, different customer headaches to deal with on ebay. That means i have to put more effort into
CRM.
However, If you are doing batch sales of 200 computers for a single buyer in 3rd world countries, for those 200 computers you only need to deal with one person = one headache. On top of that, that is 200 computers at a clip = that is serious volume.
BADGERHUT, your comment about customer service deterioration as a business expands beyond cottage services into an assemblyline throughput process is spot on... and it goes to my preference for massive, big lot 3rd world buyers over online sales that will strain customer service the more you expand.
That is not the only advantage of 3rd world buyer over online sales... as i expand, i need to do more market research and increase inventory levels... this will be kept at minimum by going with a 3rd world buyer. Why? I am only reacting to what type of computers they want, i am not wasting time/money doing market research or stocking up too much on inventories. If they want something, they simply tell me; and i simply go and find it for them: in essence, they are the ones doing the market research for me.
The main drawbacks of 3rd world buyers is the problem of volatility which will only increase with business expansion. I could get an order for 150 computers this week, then 3 weeks later get an order for 80, then
2 days afterwards an order for 300.
The reason is because my buyers are constantly looking for business opportunities in their respective 3rd world countries.. The size of the opportunities they find varies. You can imagine how this kind of volatility will impact how to structure employees work hours, training of employees, the number of employees, short term and long term current asset/liability planning, outlays, forecasts, inventory levels, etc
There is a reason i was very specific with my requirement for
software database. . I need detailed data to run inferential statistics, moving average analysis to smooth out the outliers.
Respectfully,
Nomad77, it is not something that happens automatically.. it is not a linear progression relationship. It happens in quantum jumps; and I want a lean, mean machine that is optimized to the max. That is why i appreciate recommendations such as "the toyota way", "good to great", kaizen, six sigma.
I need to automate the process with dependable, well trained employees so that i can free myself to pursue more leads to find more buyers to drive volume...which means i cannot depend entirely on university students as i expand further and further, and this will raise my costs. I need the automated process to free up my time to pursue hot leads for cheap inventories to fill those orders volume. I want to be the lad they go to all the time-- because i will always have their needs met; come rain, snow, blizzard, tornadoes, earthquake, you name it. They need something and nobody else could find it? Nemencine will get it for you. I want to be that lad. In business, you get contacts from other contacts you've developed good working relationship with, which in turn get you more contacts..... Naturally, i will try to do all these while keeping overhead at minimum...
As
WIA succintly put it: You have to dial down your process, expand your intake, throughput, and back end. Of course, the devil is in the details.
Wi30 made some really good points in his posts.... not just on the issue of S-CORP vs C-corp, and taxation issues... i am a hand-on manager type.... i wonder though if legal zoom will be solid enough to prevent any future headache, perhaps, it is simply better to get a solid lawyer to begin with. Of course, i will find any SCORE organization to leverage their experience and expertise.
BADGERHUT, i agree that regardless of what you are selling, you are selling the experience: prompt attention to customer complaints, dependable turnover time, ability to fill whatever orders at the cheapest price possible, maintaining good personal relationships with my buyers from 3rd world countries, familiarizing myself with their different cultures, etc.
I will definitely look into the E-MYTH BOOK recommended by
MONSTER and
HARVEY SPECTER and certainly looking forward to
"BLURREDSEVENS" insights.... and i agree, the issue of how to scale a business is something that is relevant to many different businesses(computers, realestate, softwares, blogging business, forums, etc.
Once again, big thank yous to everybody.
regards,
Nemencine