ForumsStarting a Business

Wyldfire:

Congratulations on your new venture.

I won't address the tax issue since I am not accountant. I suggest that you find a qualified one and get their advice.

However, when it comes to inventory logistics, I've managed a variety of different programs both as supplier and customer.

It is best not to take possession of the inventory in most cases to minimize costs and improve cash flow. This is not cheating - it just can be good business. However, the down side to passing through business to a supplier is, will you be able to retain the customer for future business? I would imagine that you are trying to get more than one sale from each customer.

If you pass the customer information along to the supplier for a drop-ship, will the supplier try to take the customer direct?

If you give the supplier information to the customer, will the customer bypass you in the future hoping to save money on additional purchases?

The answer to these questions will vary depending upon your suppliers. Some suppliers do not want to deal with customers on a one-to-one basis. They prefer other businesses spend the money to market the business and to handle customer issues. However, if you are simply acting as a source buying from an individual and selling to an individual, you may be at higher risk for losing future business if you do not hide the customer and supplier from each other by taking possession of the inventory.

Hope this helps.

Doug Dolan
The Solopreneur's Guide
http://thesologuide.com