Month: August 2018

Starting A New Ecommerce Shop

I had always rejected selling on e-commerce platforms such as ebay and the like. The first is the transaction fees which may be incurred, the second is the lack of control which I may have. The Chinese e-commerce site Taobao has also been known to take down sellers’ items without notice. Competitors on Taobao has also employed tactics to get each other’s items down.

I had decided to build a website for my own e-commerce store a long time ago. But it did not go well, partly due to my own laziness to promote and partly due to my own laziness to consistently put new things up. Recently I was advised by someone who read up about the success stories of e-commerce sellers on various platforms. These are not feel good stories about how to get rich fast or fluffy stuffs on buy cheap sell expensive that kinda thing. This stuff draws on how the seller analyze goods and how they attract customers.

One take away point would be to sell a few very cheap stuffs. By having a few very cheap stuff where you almost have little to no margin, you are able to attract customers into your shop. This will have the effect of driving traffic to your shop, and with the higher traffic comes the possibility of selling other stuff which are more expensive and have a higher margin. There was a real case study on a particular seller’s experience on why this is important but I shall not go into that.

I was hesitant at first because selling a lot of cheap stuffs will mean taking up my already little time to do my other things. But if I do nothing to improve my situation, it will never change, particularly more so since my business has dropped by about 70% in recent times. I have since then decided on the product scope and have started imported things. Not too many, but something small to start it off. I don’t believe in dumping 10k into a business and hope it will work. I am not a rich man and have to be more cautious when I deal with risk. Calculated risk yes, but not senseless risk.

When the new stocks enter, I will be listing it on various platforms as well as my own website.

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A Whim

I have been observing this so called guru trader on stocks, commodities and the like for a long time. He has been posting on his opinions and his predictions regularly and has amassed a certain following due to his high accuracy. For the past 5 years or so which I have been observing, he has been daring to predict what his views are, rather than go on a ‘hindsight’ basis. This is something which someone with little confidence or little knowledge dare to do.

Of course, he is human and not perfect. He makes mistakes sometimes which is understandable. After all this time, I decided to take action and follow one of his prediction without doing any homework. I did told my friend that too, since he followed that guy in the past too. No idea if he still does. My friend did told me that people who knows how to earn money would earn quietly. Only half-skilled people would come out and give seminars to earn money. That I agree, and said that this supposed guru does not give seminars but put his advice up for free, to which he replied ‘free is worse’. Naturally he warned me to be careful, which I would normally agree in my normal mindset.

Maybe it is the business which has been getting worse. Maybe I am itching to touch the stock market after all this time. I lost quite a sum of money few years back and told myself I would never touch the stock market again. I came out with an excuse for myself:

  1. That although he has been wrong at times, he dares to make predictions with a high degree of accuracy.
  2. That even if I park my money with an investment agent, he would also pick stocks on which I would have gone along with without doing homework too.
  3. Given the above, I might as well follow the advice of someone with a relative high accuracy since I need to focus on other things than to learn a new trade.

In case anyone wonders, I will post this stock up for everyone to see, since it does not affect me now that I have done what I need to. Creative Technology Ltd (C76) on the Singapore Exchange (SGX). To give a brief history of this company, it was trading at a very high price (I forgot exactly how much but it was $50 or $70 per share) back in the 1990s. Then a series of unfortunate events coupled with poor decisions caused the company to dive down to the just over $1 in 2018. However it has always been around and struggling.

With the new technology they unveiled for their products, prices jumped to and stabilized at more than $6 currently. This guru had said that it will go up to about $15 conservatively or more than $50 if he hit the jackpot. Either way, for good or for bad, I made the move in and bought 1000 shares at $6 per share, without doing any homework.

I am writing this here, because as the intent of this blog goes, I will write about my route to success. I will not write just the fanciful stuff, but also the good and bad decisions to paint the actual situation, to mark one more single minor decision in my path. 1000 shares, if I lose it all, 6000 SGD. If it rises up, it will be another few thousand bucks. Not something to overturn my situation, but the road to success is made up of many steps.

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Supply Issue Resolved

Just yesterday one of the original suppliers I had sent me a ‘mass-sent text’, informing that there are now supplies and ready for grabs. Whether indeed it is a mass-sent text or not I do not know. But that has more or less resolved my supply problems.

Like I said in my previous post, I use a set of market pricing benchmark, which I call platform B. My new ad-hoc suppliers uses platform A. Now that one of my original suppliers has returned (which does not mean I will definitely approach him again), it makes my life better as he uses platform B. This means that now I have choice. I can compare across platforms A and B, and determine for myself which platform has the better price.

Of course this does not assume that the suppliers have unlimited stock and that they are able to give however much I want whenever I want it. Now that supply issue has been more or less stabilized, it is now back to resolving the demand.

Such is business. You are doing your own thing peacefully when all of a sudden things happen which may derail you. You then spend much time and effort trying to get things back to how they were. But it also wakes you up to certain loopholes or vulnerabilities you may have in your business. In this case, after coming out of this supply crunch, I now find myself having more options to trade. Supply wise, I turn out better.

Not a bad ending for now, I guess.

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Supply and Demand Crunch

Over at my previous post here, I mentioned that I am facing a supply and demand problem which I could not yet solved. Over the past few days had been the usual of trying to advertise elsewhere to increase demand, or actually to start a new side business to boost demand.

There were also a few times I was irritated at potential suppliers. Prices are determined by the market, a price agreed by most to be the acceptable price at the stated point in time. But nobody specified what would be the standard for market value of a certain product. Sometimes, there are multiple trading platforms which people referenced on. These platforms operate on different standards.

Suppliers would look across the different platforms and select one which is advantageous to them. For example, when the suppliers choose platform A to determine the market price, they would also look at platform B. From their point of view, should platform A is better than B, they would of course insist to use platform A, as they have been doing that all these while. However, if platform B offers a better pricing, suppliers would simply say they have no stock or just simply delay in their reply. They would not outright reject using platform A because it would undermine their credibility. However there are all sorts of cheap tactics which they employ.

Take note that a buyer and seller’s hold 2 opposite views. If platform A is good for the seller, it means it is bad for the buyer.

At a few points in time I was so irritated that I wanted to block off the suppliers and find others. But truth is market is bad and there are limited suppliers. My old time regular suppliers had abandoned me, as stated in the link in the first paragraph. I am still trying to build a common understanding with these ad-hoc suppliers.

As of today, I have found 2 potential suppliers, though one irritates me a lot. They insisted on using platform A as the benchmark, which contradicts me as I have been using platform B all these while when quoting my customers. The result is that I have to constantly monitor these 2 platforms and make a dash for it when the prices are the same across 2 platforms, or when the prices are in my favor. Of course this requires me to increase my reserve stock, which cost money.

Now that the supply issue has been temporarily resolved, the next issue will be to resolve the demand problem. Demand has dropped to 20% of its former volume and I am still at a loss on what to do.

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Maintaining A Business

Starting a business is difficult. It requires a lot of groundwork and a lot of effort to get things started. My personal experience was that it took me quite some time to get my first sales, which was a small transaction. But often times, maintaining a business is no easy task too.

When things are going well after the initial stage of getting a steady stream of transactions, the business just keeps running without much issues. But every now and then, there will be some unforeseen circumstances which throw everything out of order. Sometimes, that is due to one’s own crappy decisions. Sometimes, it is the result of other’s actions. Good days do not last, and the path of a businessman is plagued with never ending problems.

Take my case for example. I had quite a few small businesses. I started one of it in January 2016, where it grew to about a monthly income / profit of $800 (all currencies are in Singapore Dollars unless otherwise stated) by about September 2016. It was decent enough by my own standards, but also a ceiling which I spent quite some time breaking. It then further grew to about $3000 a month by about January 2018. There was a momentary burst of profits for a short period, but for the rest of the year till July 2018 it was pretty capped at a $3000 ceiling which I could not break.

Then it happened. I met a scammer, which resulted me in having coffee in the police station trying to prove my innocence. My bank account is frozen till today. The end result was my long term supplier abandoned me, leaving me with a high demand but no supply. I had to depend on my inventory, which could only last me a few days. All these time I was scrambling to find other suppliers, none of which were as good as the original. Some of the new ones I found were expensive, others were not interested in doing business with me for various reasons.

At about the same time, news of trade war between the USA and China started. It escalated to the point that some of my customers drastically reduced their orders with me. At this point in time, I do not have a reliable long term supplier, though I do have some ad-hoc suppliers who would sometimes want to mass-dump their stocks. The dilemma I am facing now is:

  1. I do not have a reliable supplier whom I can get any amount of stocks I want any time, depending on my needs.
  2. My sales is dropping and I am trying to pick it up again.
  3. I have to keep finding ad-hoc suppliers all the time and sometimes they just wish to mass-dump their goods. If I do not absorb, they will move on to find others.
  4. I do not have that much money to absorb all the goods.

This brings the issue of balancing both demand and supply. As mentioned above, I have a falling demand which I am trying to do something about. At the same time I have to keep on managing my supply to ensure that I do not keep excess stocks beyond the reasonable reserve, yet will always have the goods when customers demand for it.

This is why successful businessmen are good problem solvers. If you are an employee, you probably would just settle the matters within your own job scope and throw the rest to other departments. Unless of course, you are a CEO or some big shot in some high position. In my small business, I have to solve every single issue myself, which of course leveled up my problem solving skills.

I am currently planning for talks with a potential supplier. But who knows if the talks will even take place or even be successful. More advertising are also done at the various platforms to raise demand. Hopefully everything goes well down the road.

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The Hours Spent After Work

For commoners like us, the hours spent outside work determines what kind of life you will be leading. Most of us have no choice but to get a day job after graduation from the university. In Singapore’s context, during my time in 2011, you will get $2500 a month on the lower end, perhaps $3000 as the median or about $5000 if you are good. Regardless of what it is, a difference between the top and the bottom tier is about $1500. That may seem, and is a lot by the fresh graduate’s standard. But when put into perspective 10, 20 or even 30 years into the future, $1500 will be a small sum compared to the difference between many of us.

There are those who will make it far up the career ladder. They can be general managers, directors or even CEOs of big MNCs. They must have spent countless hours doing overtime, either in the office or at home.

There are those who make it big by doing smart investing. They spent countless hours learning how to invest and trade various things, from shares to commodities to options to forex, etc. They have also met with countless failures, which may wipe out their past profits.

Then there are those who do business out of their work hours. Setting up a business is no easy feat. There are always problems you have to solve.

Regardless of which, one thing is for certain. That the little effort you put in everyday will widen the gap with those who spend their time on other things. I will be clear about this. There is nothing wrong with wanting a work-life balance, with spending time with your family, with resting enough to take care of your health. These are all perfectly legit reasons, and people who are earning an honest living have every right to think that way.

But, we are talking about achieving success. Success comes at a cost. The legit reasons mentioned above often hinders one from achieving success. Why? Precisely because they are legit reasons. If I tell someone that I want to spend more time with my family after work, who can fault me for that? Who can persuade me otherwise that resting after work for my health is the wrong thing to do? Yet, it is also a fact that people who think that way do not put in extra effort for their success, and hence in a way, not unexpected that they remain an average person.

We often overestimate what we can do in a day, and underestimate what we can do in a lifetime. Pace it out, have the rest you need, but make the necessary sacrifice for the extra effort. 1 step more a day will mean 100 steps further than the average person, and 1000 steps further in 1000 days.

We do envy those who can enjoy now. When my friends are sleeping, I am working. When they are having fun, I am working. When they are working in their day job, I am too. Even when I am outside having dinner with family and friends, I often have to be rude and use my phone to reply to customers. This is the cost of my road to success, which I have not yet obtained.

There might be people who got their success easy. But I know for people like me and many others out there, such luck will never be upon us. This is not a feel good seminar to prep you up for success just by empty talk. Be prepared to put in the time and effort if you want your success.

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Opportunities In The Financial Crisis

Now that I am of the view that a financial crisis will be coming soon, the question to ask will be: What can I do to capitalize on this advanced knowledge?

A quick Google search on businesses which do well during recession had the following results, provided by thebalancemsmallbusiness.

  1. Accounting services
  2. Bulk food sales
  3. Affordable luxury items
  4. Debt collection agencies
  5. Resume writing services
  6. Auto repair services
  7. Home staging
  8. Virtual assistant
  9. Tutoring services
  10. And the last one which I read elsewhere many times but not on the original list – candy businesses

I shall not go into detail what each of them entails as you can click on the link above for more information. Narrowing down what I could do, I realized I had 3 options:

  1. Buying shares of companies which does business in one or more of the areas above
  2. Do a business of my own in one or more of the areas above
  3. Freelancing in one or more of the areas above

The one I am thinking of is either option 1 or 2. Freelancing would still fall under the area of exchanging my time and energy for money, which defeats the purpose of doing business in the first place.

Out of that, I am also monitoring Facebook’s share prices, which recently made news for diving about 18.8% off its original price. What was interesting was that after the saga with Cambridge Analytica, it continued to climb up to the point where the 18.8% drop in share price was still higher than the price during the data leak crisis. While there is no indication that it will fall further, I am hoping that in the coming months it will fall further and make it attractive enough for me to buy.

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Impending Financial Crisis

They say financial crisis is a 10 year cycle. In 1998, we have the Asian Financial Crisis. In 2008, we have the financial crisis caused by the subprime mortgage and triggered by the collapse of the Lehman Brothers.

This is 2018 now and I am expecting one to come soon. The trade war between US and China is one indication. Trump by no means is a stupid president with a bloated ego. Stupid people don’t win the US Presidential Elections.

In China, the property bubble is ridiculously big, with a huge household debt at its side. The China government does not intend to let the bubble explode. However it is intending to reduce the impact of the bubble and trying to shrink it.

Perhaps we can look at some of the other people who believed the impending financial crisis:
Bill Gates believed it
The Economic Times published an article on it
US News had another article

Why is the financial crisis important? It is the time when cards are shuffled and wealth are redistributed. The rich can become poor and the poor can become rich. It is our chance to make money out of it.

I am not saying that we will be rich overnight, neither am I saying that at the end of it we will definitely be part of the elite circle. I am just saying that by predicting the future and making use of the opportunity, we might be able to earn a fair bit from it.

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