In the previous issue, I told you that my first business was a retail business. It folded after 6 months, and I lost $50k.
With a bad experience in retailing, I went into wholesale business.
I got to know a telephone supplier in Hong Kong.
Yes, it was telephone, not handphone. That was back in 2003, when most houses still had a telephone.
My business partner let me use his warehouse and office, so there was no overhead for me.
I just had to persuade retailers to sell the telephones, and that was something I was good at.
I was in the wholesale business for 3 years, slowly recouping my previous losses.
Honestly I wasn’t motivated in that business at all.
I was selling a product that I was not passionate about.
Also, since I didn’t create the product, there was nothing I could do to improve the product I was selling.
Money wise, it wasn’t very rewarding too.
First, there was a problem of bad debt. For every phone sold, my profit margin was about 20%. For every bad debt, I had to sell 5 phones to make up for the loss.
Second, there were many hidden costs. For example, big retailers would ask us to support their advertising campaigns, or take up a booth at their bazaar sales. They had lots of ways to take back the profit we’d made, and it was hard to say no as we needed their businesses.
Third problem was outdated inventory. At that time, there was a shift from wireless phone to DECT phone. We were stuck with many wireless phones.
From the wholesale business experience, I told myself that I would not sell physical products again.
In fact, starting from 2004, while still running the wholesale business, I was already actively seeking online opportunities.
My aim was to achieve time and financial freedom. What I was doing then was not going to lead me to that.
So the quest continue…
