In my quest that in five years or less, I want to be my own boss, earn at least what I making now at a corporate job, work less and have more fun, I decided to give myself a birthday gift six months ago of buying a course to do drop shipping. Read about that here- https://thesidehustlejourney.com/2zmf
Almost two months ago, I wrote about my experience ~½ way through the course here- https://thesidehustlejourney.com/z9m2
I think I am about six weeks away from launching my drop ship side hustle so I thought it was time for another update. I saw in my first blog about this venture (above) that I had hoped to be up in running by the end of August. It’s now late September and I’m shooting for an early November launch. I am trying not to be discouraged by the delay but just accept it that it takes longer to do things sometimes than you think it will and I want to do it right. Oh, also, it’s 2020 so we should all give each other a break as sometimes just getting out of bed in the morning this year is an accomplishment.
When I left off my on last blog, I had just completed my “fake” website at www.homeofficewellness.com. It was time to start looking for suppliers because, if I don’t have any products to sell, I don’t have a business. As I have mentioned in prior blogs, I am following a course by Anton Kraly called Drop Ship Lifestyle.
Anton says that there are three levels of suppliers: Gold, Silver, and Bronze. He defines them as the following:
- Bronze (don’t go with them)
- Will accept everyone who applies
- Do not enforce MAP (minimum advertised price)
- Bad customer service (more about making money from being a middle man)
- Charge for access to products (middleman)
- Silver (they are good- they will make up most of your business)
- Don’t sell directly to the public
- Review all of potential retailers (they will check out your website- he suggested a phone call with them)
- Enforce MAP policy (if you break it, they will turn you off)
- Good/great customer service
- Gold (probably won’t approve you from day 1)
- Don’t sell directly to the public
- Work with a small number of select retails (5-10)
- Enforce MAP policy
- Excellent customer service (may have a dedicated rep)
- Refer business to their retailers
Back in June, one of the modules in the course required research on suppliers for your market so I already had a list. Anton says that you need to find a niche with at least 20 suppliers and the goal is to sign up five. The treadmill desk niche has about 11 suppliers so I decided to “niche up” by going up a level. This means that I have decided to expand my product line from just treadmill desks to bike desks, treadmills, exercise bikes, stand up desks and treadmill bases. By nicheing up, I added another 17 potential suppliers to my list.
Since early August (about seven weeks ago), I have stopped listening to the course because I have been trying to secure suppliers. Anton said that you should pause the course until you have five suppliers. This is part of the reason that I am pushing back my launch. I only have ~1 hour a week before or after work to call them or weekends to email them so it’s a slow process and most attempts result in leaving messages or sending an email.
Anton gives lessons on how to make the calls and gives you a whole script to use. I’ve been in sales my whole life and even I was a little nervous about contacting the suppliers. I realized that in my job I am always working for someone else but now I’m starting my own company and it’s personal so it makes it a little scarier.
I always try to call instead of email because, even though emailing is easier, calling is more personal and shows that you will make the effort to talk to someone in person. I shortened the script for initial calls to be, “Hi. My name is Julie Hickey, and I’m with http://www.homeofficewellness.com and I want to be an online retailer for your company, can you let me know the steps to get approved for a wholesale account?”
The person who answers the phone will usually get you to someone in their reseller program if they are a big company or the owner or someone in sales if it’s a smaller company. When I get the next person on the line, I use the same script to start out and then listen to what they say. You can usually tell in the first few minutes if they are interested in your company and want to talk more. If they are not interested or ask you to try again when you are more established, try to get the person’s full name and address and send them an email follow up as you never know if they will change their mind.
When I did my calls (over the last nine weeks because time was limited), I found one supplier was out of business, two said on the voicemail that they are not answering the phones and you must email them, one I talked to said they were no longer accepting reseller applications, another said I should contact them after I have been up and running for at least six months and ~five more I left several messages, filled out a reseller page on their website and/or emailed with no luck. I have one company who is considering me and the sales manager said he’ll bring me up at the next sales meeting.
There is some good news in all of this. The supplier that we actually own a treadmill desk from (and bought it ~seven years ago) will take me on as soon as I get my state reseller number. Another supplier hadn’t gotten back in touch with me and then I noticed my cousin in Utah posted something on Facebook about introducing a new product from this company. I messaged her and it turns out she works there. I told her I had not been able to get anyone to call me back and she put me in touch with their sales director, we had a great call and he is going to sign me up. Even though that’s only two confirmed suppliers and Anton suggests five, I am going to keep moving forward and start back on the courses.
I got a little derailed this week when I saw a company called The Hot Yoga Dome is selling inflatable hot yoga domes, which I thought was brilliant and could fall under a “home office wellness” category. I spoke to the owner. He is really nice and said the company is growing like gangbusters. They are not really looking for resellers and I’d have to buy 30 up front at a 15% and hold the inventory and ship them myself (at $1,000/each- ouch). That isn’t in line with my model but he said he can create an affiliate link where I can post it on my site and it gives my customers a $25 discount and I get $50 per sale. Not a huge money maker but I think it’s an interesting product so I may put a link on my site. I had a little fun with that but now I need to get back on track and focus on my core business.
One of the suppliers who is going to send me up asked about my reseller certificate so I had to research it. I put a note on the private Drop Ship Lifestyle Facebook page (which you get access to when you buy the course) and several folks said they use Tax Jar to help figure out the tax issues (it costs $20/month). I went on their website and scheduled an appointment I had a call with Lindsay from Tax Jar and here is what she said I need to charges taxes and can do that on Shopify. She asked about my Nexxus and I didn’t know what that meant.
She explained what Nexxus is:
1. Your physical Nexxus- where you are & where any location where the product is stored- if you own the business- I am required to collect taxes only in California even though I will work with suppliers in other states.
2. Your economic Nexxus- the volume of sales in a giving state in a 12 month period (states do the 12 months in different ways).
She said TaxJar can help customers with the e-commerce piece of sales and make taxes easier. They integrate with Shopify, which is a plus for me, and they can automatically file in the states that I have nexus- called autofile
I only need to register in California and then they track all states and let me know when I need to register- usually at $100k or more (but could be transactions). They don’t help with resell certificate- I need to go to California and work with them. I signed up here- https://app.taxjar.com/sign_up
For the reseller certificate, I have to work with my state (California on that). This has proven to be a bit of a pain and I started the process three weeks ago and haven’t resolved it yet.
When trying to apply for my California reseller certificate, I tried to fill out the application at
cdtfa.ca.gov/formspubs/cdtfa230.pdf, it asked me for my sellers permit number. I had to apply for my sellers permit number at cdtfa.ca.gov/taxes-and-fees/faqseller.htm with The Ordinary Mom LLC. It said I should get security code in 10 business days in the mail to log in to check the status. That was three weeks ago and I haven’t gotten it in the mail. I need to spend some time and try to figure it out as I’m stuck with my suppliers until I can get the California reseller certificate.
I hope hearing about my journey helps you think about your own side hustle journey. I still hope to launch in ~six weeks so I’ll keep plugging along and do another blog when I have more information. Thanks for joining me on this journey,