Hunka Hunka Burning Love Posted May 25, 2016 Share Posted May 25, 2016 Originally when I first got into this whole EUC craze, I played with the idea of importing EUCs into Canada to sell locally, but I ended up ultimately deciding against it due to my full time commitments with work and other things. It's still one of those ideas I'm curious about pursuing, and recently I got to thinking more about it. I am still hesitant to make the commitment though as although I love the idea of helping supply EUCs to others in my country and spreading the fun I wonder if all the work would be worth the rewards. I know there's a fairly healthy upcharge on EUCs, but I imagine that the margins are not huge after factoring in the time, effort and overhead costs in dealing with a distribution business. Shipping and import fees are likely to add to overhead and pricing. Factor in dealing with warranty issues, refunds, credit card fraud, etc, and ultimately I don't know if the financial gains would outweigh the risks. Add to that the fact that these EUCs are a niche item that aren't widely accepted yet and isn't a "must have" sort of item, I wonder if it would be difficult to move older stock while newer models are coming out. Product leads times also must complicate matters. How do distributors protect themselves against lawsuits? Say someone gets seriously hurt on a product you just sold them or a battery pack has a melt down and burns down someone's house, and they file a lawsuit that names your company as well as the manufacturer. I don't think there's legal liability insurance that you can buy that covers that? If a customer receives a DOA wheel or has a warranty issue that requires shipping the wheel back, does the manufacturer cover the shipping costs? What happens if your supplier goes out of business? You've paid them a large sum for an order, but they disappear and don't ship out the goods or only ship a partial shipment... I think if I didn't have a full time job dealing my current business I might be more interested in maybe considering it more seriously. I think you would have to be able to move enough units with enough of a mark up to maintain a healthy profit after all the bills at the end of the day. If the markup is too high, people will order directly from China or just won't buy from you. If it's too low you might not cover all the costs you've incurred. For countries or areas that have a long winter season the slow months might not see a lot of product sales. After reading some other product distributor's problems with fraudulent credit card usage to buy their (non-EUC related) products, I'm thinking maybe I should stick to my day job instead. Link to comment Share on other sites More sharing options...
lizardmech Posted May 25, 2016 Share Posted May 25, 2016 You need a limited liability corporation and insurance. Provided you act responsibly they can't personally sue you only the company. Repairs, not getting scammed etc. is just a matter of being able to negotiate and find good suppliers. Usually in sales if one is faulty suppliers just give you a credit on the next order. So if you bought 20 EUC and one was faulty they will send 21 next order for price of 20. It's totally dependent on what you negotiated with the supplier. Don't just buy them and and wait until there's a faulty one to discuss it. Some might just sell them at a low price and expect you to keep high enough profit margins to cover faulty ones. Link to comment Share on other sites More sharing options...
OliverH Posted May 25, 2016 Share Posted May 25, 2016 2 hours ago, HunkaHunkaBurningLove said: Originally when I first got into this whole EUC craze, I played with the idea of importing EUCs into Canada to sell locally, but I ended up ultimately deciding against it due to my full time commitments with work and other things. It's still one of those ideas I'm curious about pursuing, and recently I got to thinking more about it. I am still hesitant to make the commitment though as although I love the idea of helping supply EUCs to others in my country and spreading the fun I wonder if all the work would be worth the rewards. I know there's a fairly healthy upcharge on EUCs, but I imagine that the margins are not huge after factoring in the time, effort and overhead costs in dealing with a distribution business. Shipping and import fees are likely to add to overhead and pricing. Factor in dealing with warranty issues, refunds, credit card fraud, etc, and ultimately I don't know if the financial gains would outweigh the risks. Add to that the fact that these EUCs are a niche item that aren't widely accepted yet and isn't a "must have" sort of item, I wonder if it would be difficult to move older stock while newer models are coming out. Product leads times also must complicate matters. How do distributors protect themselves against lawsuits? Say someone gets seriously hurt on a product you just sold them or a battery pack has a melt down and burns down someone's house, and they file a lawsuit that names your company as well as the manufacturer. I don't think there's legal liability insurance that you can buy that covers that? If a customer receives a DOA wheel or has a warranty issue that requires shipping the wheel back, does the manufacturer cover the shipping costs? What happens if your supplier goes out of business? You've paid them a large sum for an order, but they disappear and don't ship out the goods or only ship a partial shipment... I think if I didn't have a full time job dealing my current business I might be more interested in maybe considering it more seriously. I think you would have to be able to move enough units with enough of a mark up to maintain a healthy profit after all the bills at the end of the day. If the markup is too high, people will order directly from China or just won't buy from you. If it's too low you might not cover all the costs you've incurred. For countries or areas that have a long winter season the slow months might not see a lot of product sales. After reading some other product distributor's problems with fraudulent credit card usage to buy their (non-EUC related) products, I'm thinking maybe I should stick to my day job instead. The manufacturers sometimes talk about developing markets. They mean to find new channels to sell more volume in the short view. My feeling: The manufacturer doesn't know anything on the different markets. You'll not receive any coverage or lawyer support to build up their business. You need to deal with market specific certification (UL2272,..). So you deal with regulation stuff, may be need to lobby for street legal usage if not applicable. Keep in mind that this companies are small. The only big one is Ninebot with money/ investors in the background. But even such a company is not using it's skills/ potential to develop markets. As a distributor you need to have a sales network, a service point, marketing resources and a regulation specialist. Don't think in volumes of 20-30 per shipment. That's exchanging money. If you can't sell in container sizes don't start that business. If you don't order by ship the transportation cost are to high but you need to finance goods for 8-10 weeks (order, build, shipment, customs, warehouse) and the goods should be sold at least at the time they're on the way to you (pre orders). You can try to start small but it's an heavy way as always an other one can jump in take your idea and join with money in the background. Exclusive rights are not there in times of globalisation (international agents) and laws like in Europe forbidding such situations. So if you've a proper business plan, money go ahead. At least you should have a multi (dual) product/ manufacturer strategy. I saw over a year ago at a dealer 3 faulty Rockwheels (DOA) which never were replaced. So evaluate your business partners and let them send with the first order spare part on front for warranty issues. Link to comment Share on other sites More sharing options...
Hunka Hunka Burning Love Posted May 25, 2016 Author Share Posted May 25, 2016 It does sound like an endeavour that can't really be tackled adequately on a part time basis after factoring in the costs involved. On a small scale it doesn't take much to eat up the profits gained on sales if something goes south. I'm not so sure riding EUCs are as popular in Canada due to our love affair with gasoline vehicles. Trying to sell a boat container of EUCs would be pretty daunting especially at their current price points. Trying to convince someone that this model is worth $1600 vs one they can get themselves on AliExpress is probably not that easy. A used car here on Kijiji can run you about $1600. Add in the fact that the currency to purchase these wheels usually is in USD which is currently 1.31 CDN makes it a difficult prospect to consider. Link to comment Share on other sites More sharing options...
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