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Thread: 1st Christmas In Business needs advise

  1. #1

    1st Christmas In Business needs advise

    Hey all, this is our first Christmas to be in business and our biggest fear is to run out of stock/supplies, actually that would be our 2nd biggest fear, I guess our first would be not to need any supplies. Can anyone point us in the right direction as to what sells the best around this time of the year or what we might need to stock up on?

    Thanks in advance for all your help.

    James & Zelma (Psalms 18:2)
    Inscriptions Of The Heart
    Huntsville, Texas

  2. #2
    Join Date
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    You are a store, rather than doing craft shows, right? Thats different from most of us. I have sold at my place but it's a sign shop, so just to customers coming in for other things and I don't get a lot of traffic.

    From what I've seen anything $5 and under is going to sell a lot better than the more expensive items at shows/fairs, because people are looking for a bargain. It may be different for you. I did do some stained glass Christmas items on consignment at a gallery and found that $10 and less sold well, brought back several of the $50+ items.

    I have someone doing a show with some of my ornaments in a few weeks and I'll be here ready to make more if some item sells faster than the others, then run them out quick to the show about 10 miles away.



    Sammamish, WA

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  3. #3
    James and Zelma:

    I would find suppliers who can ship to you within 2-3 days rather than buying a lot of inventory. Early on it's hard to figure out what you can sell. So inventory control is pretty important unless you want a big after Christmas clearance.

    That's not to say you shouldn't have something on hand.

  4. #4
    Join Date
    Dec 2006
    Location
    Noblesville, Indiana
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    5

    Getting Ready for Christmas

    I designed 10 different ornaments on a whim. My suggested that I try sell
    them to a local store.

    I was able to sell a lot of 50 pieces ASAP to the store. But I did find out that
    you have to start contacting stores as early as January and possibly as late
    as May or June.

    Come up with unique designs for your area (local interest).

    Have fun planning for next year.

    David Savidge

  5. #5
    Join Date
    Sep 2007
    Location
    Junction City, Oregon
    Posts
    213
    At this point you are so close to Christmas I would be careful about getting anything else. Better to run low and take custom orders than have too much and be stuck with it and no place to go. Keep track of what did well this year and plan for next year. You need to be 2-3 months early on most holidays and if you want to wholesale Christmas stuff I would think that the January to May idea is pretty close. If I were going to do something special for multiple holidays I would do a customi engraved wood box filled with truffles. Works for Christmas, Valentines, Birthday, Mothers and Fathers Days. Love the multi use stuff. If you have a local custom chocolates shop see if you can put some boxes there.

  6. #6
    Since it s your first Christmas, it is going to be difficult to plan now. Our last day for taking orders that are sure to be ready is the 15th. That is late for a lot of companies that do custom work.

    I suggest you look at only the items you think you will sell throughout the year. If Someone asked for something completly custom that you need to order, inform them that your not sure you can get it. Ask them if they are will to pay possible addition charges to have the material shipped overnight if you can get it.

    As a business unless your year end date with the IRS has been changed , extra inventory , on Dec 31, is going to cost you, and tax rates on business are not cheap.
    Garry McKinney
    A new day is a new chance.


  7. #7
    This was posted last October for last Christmas, someone bumped it to the top.
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  8. #8
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    Quote Originally Posted by Scott Shepherd View Post
    This was posted last October for last Christmas, someone bumped it to the top.
    Well, I guess they have it all figured out by now then don't they...
    Epilog 24TT(somewhere between 35-45 watts), CorelX4, Photograv(the old one, it works!), HotStamping, Pantograph, Vulcanizer, PolymerPlatemaker, Sandblasting Cabinet, and a 30 year collection of Assorted 'Junque'

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  9. #9
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    Quote Originally Posted by Garry McKinney View Post
    As a business unless your year end date with the IRS has been changed , extra inventory , on Dec 31, is going to cost you, and tax rates on business are not cheap.
    The IRS does not care about your carryover inventory when it comes to taxes. You local state/county/city may have an inventory tax, and that should be figured in to your calculations.

    Howard Garner
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  10. #10
    Howard,

    Perhaps it depends on the type of business you run. I operate under C corp. Inventory reflects profit, and profit is taxed at 30 plus percent. It is considered capital and is necessary on filing taxes. If you start with a zero inventory one year , increase that inventory to 100,000 as far as the IRS is concerned that is 100,000 profit. So unless your expenses, cost , or loans exceed this amount it is all considered profit and taxable. S corp are different, but inventory is a big part of IRS filing and a major part of a balance sheet.

    Garry
    Garry McKinney
    A new day is a new chance.


  11. #11
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    Quote Originally Posted by Garry McKinney View Post
    Howard,

    Perhaps it depends on the type of business you run. I operate under C corp. Inventory reflects profit, and profit is taxed at 30 plus percent. It is considered capital and is necessary on filing taxes. If you start with a zero inventory one year , increase that inventory to 100,000 as far as the IRS is concerned that is 100,000 profit. So unless your expenses, cost , or loans exceed this amount it is all considered profit and taxable. S corp are different, but inventory is a big part of IRS filing and a major part of a balance sheet.

    Garry
    Garry,

    I will reluctantly yield. I don't see how inventory can be considered profit, increase in the book value of the business, yes, but something had to buy the inventory. Converting cash to inventory does not in my mind create a profit.

    But then I just work on computers all day and am not a tax expert.

    Howard

  12. #12
    Howard,

    No issues here mate. I should have explained it better. So see if this helps.

    You start a business, you have to have capital, so you go to the bank and get a loan of 1 dollar. The dollar becomes a debt you owe.

    You take that dollar and buy something to engrave . Now you have a dollar in inventory.

    You engrave the item. and return to zero inventory. But you have a finished good.

    You sell the finished good for 3 dollars.

    With the sell you paid off the debt one dollar which came from the profit of the sell .

    You have 2 dollars left which you purchase 2 items for inventory. Although you have no cash , you paid off your debt, and increased inventory by 2 items (which are now paid for ) which came from the profit of your first sell. So your inventory increase is considered profit and taxable.

    In real life it isn't quite this simple because you have additional expenses , but this is the basic of inventory being profit.
    Last edited by Garry McKinney; 12-12-2007 at 3:04 PM.
    Garry McKinney
    A new day is a new chance.


  13. #13
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    Quote Originally Posted by Garry McKinney View Post
    Howard,

    No issues here mate. I should have explained it better. So see if this helps.

    You start a business, you have to have capital, so you go to the bank and get a loan of 1 dollar. The dollar becomes a debt you owe.

    You take that dollar and buy something to engrave . Now you have a dollar in inventory.

    You engrave the item. and return to zero inventory. But you have a finished good.

    You sell the finished good for 3 dollars.

    With the sell you paid off the debt one dollar which came from the profit of the sell .

    You have 2 dollars left which you purchase 2 items for inventory. Although you have no cash , you paid off your debt, and increased inventory by 2 items (which are now paid for ) which came from the profit of your first sell. So your inventory increase is considered profit and taxable.

    In real life it isn't quite this simple because you have additional expenses , but this is the basic of inventory being profit.
    Drifting way off topic on this:
    The $2 profit from the sale was reinvested in inventory with no additional capital added to the business. Thus this is taxable gain, it just now resides in inventory.
    If we just wait a year (no sales, lousy business man) the $2.00 inventory does not represent a taxable item for that year.
    So someone that invests in a business (capital) and buys a lot of material just at the end of the year (no sales) would owe no tax since there was no gains.
    If he makes sales, this profit is taxable, regardless if it is invested in materials or just sets in the cash account.

    Interesting to discuss these impacts of doing a small business.

    Howard

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