As for the 3rd question, I'm not really sure I have to justify myself there. I have as much right as anyone else to run a magic related business.
You misunderstand the question. Of course you have as much 'right' to start a magic shop as any one, but that doesn't mean that you should.
Of course you don't have to justify it to me or anyone else, you DO have to justify it to yourself though. That is what a business plan is all about.
If it turns out to be viable then that answers your question... there is room for another.
No, you have to work that one out BEFORE going into (any) business, otherwise you end up as just another of the many business failures each year and become wiser but poorer!
Niche markets are good, but they are by definition small. Black Artefacts caters for a niche market but we have customers all over the world. Our business is based in the Northern Scottish Highlands, we do not have a shop premises because we don't need one. Having business premisses adds a huge amount to your fixed costs and means that you must have a large turnover just to keep the premises open. You need to do a lot of work to try and find out if the niche you are hoping to work in will have enough trade locally to keep the business going.
You will have rent or mortgage, business rates, utility bills, telephone, insurance, accountancy bills, the cost of stock, postage, office equipment, shop fitting, etc to pay for. I'm not saying don't do it, I'm advising that you put a huge amount of thought into it and start by having the answers to my three questions fully thought out even before you get down to a comprehensive business plan.
I may seem a little harsh but I am being realistic for YOUR sake.
Problems and pitfalls of running such a business aside...
Do not put these aside as they are by far the most important factors of running a business. Without dealing with them then any business will fail, no matter how original or clever an idea the business is based on.
Is anyone able to give an insight into how stock is usually sourced?
Should you approach each brand separately (e.g. individual publishers, inventors, magic brands, card companies) or are there magic suppliers who source it then provide stock?
Do suppliers usually drop ship, provide wholesale or provide small numbers?
Is it usual for them to provide credit or is it always money up front?
You see from the above question it looks to me that you are simply planning on buying existing effects from wholesalers, which will then put you in direct competition with all the other generic dealers. You will then only be able to compete on price and speed of delivery.
This will mean that you will have to cut your profit margins to the bone and also you will have to keep a lot of stock (which is expensive). This is generally not a good business model to start out with in an already full market.
I could be wrong of course and this is not what you are planning to do.
As I manufacture Black Artefacts effects I am able to source the materials myself so I am not paying a wholesaler and then having to put on a margin. If you solely source from wholesalers then competing on price is difficult. For example an item that you get from a wholesaler at £10.00 remember that you will have to factor in VAT (now 20%) and the delivery cost to you, will need to be sold for at least £15.00 to make a profit. If another dealer is selling the same item for £15.00 (perhaps they have purchased in such bulk that they get it a bit cheaper than you can) how much will you sell it for to 'undercut' them and what will this do to your profits?
With Black Artefacts our originality and the fact that we manufacture our own effects, which are exclusive to us is our strength. It is why we are still trading after 16 years.
I like to encourage originality and enterprise and wish you the best of luck. What I would not like to do is to see just another magic dealer peddling the same stuff.
My advise is only my own opinion for what that is worth.
Keith Hart
