Useful Advices - Internet and Businesses Online

Sometime ago I started an Internet retail business. I won't go into what that business was as I have since sold it but what I will relate are the mistakes I made and the lessons I learnt with respect to stock holding and supplying products.

Every day t

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

housands of people have ideas for new Internet based businesses that they are sure will make them a fortune. Some of them actually take their ideas to fruition and some of them succeed. Unfortunately, the vast majority fail or never even get started.

I

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

f you are planning to start an Internet based business that supplies a product you should know what the supply chain for that product will be before you start.

This may sound obvious but for a large number of businesses, they will build their web site a

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

nd then start to worry about where the stock will come from.

This is very dangerous as they may find that nobody will supply them or that the practicalities of the supply chain make their business unviable.

There are basically three ways in which stock

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

can be handled. Which one is most applicable depends on a number of factors.

Firstly, the value of the product dictates the cost of stock holding. Holding a large stock of diamond rings is much more costly than holding a stock of stationary pr

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

oducts.

Secondly, the cost of getting hold of the product may make small orders uneconomic. Many suppliers have minimum order quantities and will apply surcharges if they are not met. Such charges eat away at profit margins.

Finally,

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

the volume of turnover determines how long products stay in stock and how much capital is tied up.

Taking the above into account our three stockholding options are:

Hold No Items in stock. When customer orders come in t

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

he stock needed to supply them is ordered from wholesalers and manufacturers.

Advantages

No stock holding costs
Greater variety of products can be offered
Good for high value products
Good for high sales v

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

lumes

No capital tied up

Disadvantages

High delivery charges for small orders
Easy to get caught in out of stock situations
Slow turnaround time.

Suitability:

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

turning over enough stock to avoid small order surcharges and wish to offer a wide product range. Product supply must be reliable otherwise the business will not be able to source products to fulfil its orders.

Hold All Items In S

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

tock

Advantages

Quick turnaround
Full control
Good for high sales volumes

Disadvantages

Harder to have a broad range
Expensive if not selling quickly

Suitability:

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ses that have a small product range or enough sales volume to keep their stock moving. Generally this applies to more established businesses.

Drop Shipping

Advantages

Broad range
No stock holding c

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

sts/capital tied up

No fulfilment problems

Quick turnaround

Disadvantages

Can’t easily have multiple suppliers

Costs more per product

Loss of branding

Suitability: New buisinesses who

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

have a low stock turnover and wish to offer a large range of products.

Which of the above options is most applicable depends on the type of business and the stage it is at.

As a general rule of thumb, new businesses are more like

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ly to succeed with drop shipping, established business can hold stock and businesses of of any size can order stock as required if the product they are selling is high value.

Now back to what brought me here. My own experiences that will serve as an exa

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

mple. My business sold a product line with an average cost of ?20 per unit and an average sale price of around ?40. In order to have a decent Web site and offer enough variety to be a player in the market I needed to have around 300 product lines on sal

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

.

When I launched my site I thought that I would achieve a good sales volume and that the easiest thing to do would be to order stock once every day or so to satisfy my orders. I was under the mistaken belief that I would make sales because my Web site

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

was better than my competition. While this was true they had one thing I didn't have, TRAFFIC!. Nobody knew I was there and consequently my sales volume was low. Every time I made a sale any profit was taken up by delivery charges and small order surch

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

arges.

After a short time I decided to hold stock on all of the lines I was selling. The problem here was that sales did not magically increase and I just tied up capital that I should have been using for marketing. By the end of the season new product

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ranges had been launched and I was still selling the old stuff.

Eventually I moved to drop shipping which allowed me to stock a larger range with no financial risk. I stuck with this model until sales increased enough to make stock holding viable again

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.usefuladvices.org.ua/article/61479/usefuladvices-Stockholding-Strategies-for-Internet-Businesses.html">Stockholding Strategies for Internet Businesses</a>

BB link (for phorums):
[url=http://www.usefuladvices.org.ua/article/61479/usefuladvices-Stockholding-Strategies-for-Internet-Businesses.html]Stockholding Strategies for Internet Businesses[/url]

Want to earn more income, and advance fast in a Food specialty job like a Restaurant management job or catering manager job, or Executive Chef job, or other food related career position? READ THIS NOW, learn four simple methods to improve your chances of advancing now, and/or earning more money in your food service or related job.

What is a DREAM JOB? Let us attempt to understand some parameters linked to a Dream Job. Some statements will throw a lot of light on understanding the components that make up a Dream Job.

Not everyone is a good candidate for network marketing, and fewer still have the desire and ambition to build a profitable network marketing business themselves. To improve your chances of becoming successful in your own network marketing business, you'll need to know what to look for in prospects who come to you.

Tags

Links

Useful Advices - Stockholding Strategies for Internet Businesses

Related Articles: