If you’re setting up a products business, I suggest getting these 3 things in place right now.
While perhaps not exciting, they’re definitely important.
- Taking out business insurance
- Figuring out what kind of banking you need
- Applying for an EORI
If I haven’t answered your question please do get in touch!
3 things to do when you set up your products business
Welcome to the Bring Your Product Ideas to Life podcast, practical advice and inspiration to help you create and sell your own physical products. Here is your host Vicki Weinberg.
Hi, thank you so much for listening to this. This is the first solo episode I've recorded for a while. If you've been listening to any of the recent episodes you've seen, we've had some fantastic interviews. We had lots of guests that I wanted to get on it and share with you. And I'm actually also recording this episode the same week that you listen to it, which is quite rare. Actually, I'm recording this on the Tuesday and your going to get it on the Friday. And that's because I wanted to get the timing of this Episode right. So if your starting up a product's business, and I'm assuming that you, you, in the process of that or your, or at least thinking about that, if you're listening to this podcast, then hopefully you've already read or listened to you. My interview with Gemma Whates, which was a temp things to do, right again, when you're setting up your products business for success.
So if you haven't looked at that already, that's Episode 22 and I'll link to the podcast Episode and the blog paste in the show notes for this episode. So Gemma specializes in helping businesses to get a set up and grow and, and to have a lots of success. And she's got loads of experience here. So I actually realized after the call, as an episode of Gemma, that they were free of things that we didn't actually talk about that I think you do need to think about at the beginning of, you know, when your starting out with your business, not wanting to overwhelm you at all, but these are things that are quite quite specific to product based business is really, which is possibly why we hadn't talked about them already.
They're probably not the most exciting things, but they're definitely important, as I say, not meaning to overwhelm you, which is why I've left this episode a couple of weeks after Gemma is. So if you ask for a following along in order, umm, you don't have to much in your plate and one guy and none of its really particularly time consuming, its just a case of making a couple of decisions, putting some things in place. So this is like the going to be a fairly quick episode to listen to and UBS, to go away and think about these beings or maybe even act on them straight away soon as you're not listening. So before we go ahead and I talked to you about the three things I'd like you to think about getting set up. I just wanted to mention that I am now offering now I have some availability with kids at school and stuff.
I'm out mentioning some Power offering some Power hours. So these are a one off cools you can have with me to use as you like their page calls. And I am offering a discount for the next couple of months, at least because that, you know, as you know what I'm all about helping as many of you as I can. And so these are
calls to use as you would like really in whichever way you felt I can help your most. So in some ways you might use the power of me is to ask, you know, the specific questions. There might be a lot of things that you
want to know. And obviously the quickest way to get an answer is just to ask directly. You might want to share with me what things you've done today, or maybe your in the process of researching products, maybe your in the process of creating your product to sell, perhaps you're already selling.
And you're wondering why you're not selling as many as you like if you know any scenario you have, you want to share with me, get my input advice, suggestions for next steps. We can do that. I can also offer feedback on Amazon and using Amazon seller central. I know that's a platform that you might be interested in selling on. And I know from my own experience, Amazon is not always the easiest place to get started on. And I think if anything, it's getting harder and I've got years of experience using Amazon seller central. And I'm really happy to have a call with you where we share screens. And I talk you to freeze and realtime training. I can recall it, these calls as well as you'd always have something it to come back to, I'm going to have a particularly good for training calls because unless you're implementing things right away, you know, it's easy to forget, isn't it?
So I'm, you can have a call with me. You can ask me how is set up for a product listing. We can go through, we could do it together, live on the call, get everything set up nicely. And then you would have the video for you to come back to. So if you are interested in this, I will link through in the show notes to my Calendly page where you can book on this call, pay for the call will be in the diary and that, and then I'll be looking forward to speaking with you. So now let's get old, not with the main content. So the first thing I wanted to talk to you about is insurance. So I strongly recommend taking out insurance for your business as soon as you have stock to sell or perhaps stock on the way, if you're a source yeah. From overseas.
So yeah, the insurance policies aren't expensive as you think they might be. And if nothing else they're give you peace of mind. Obviously I hope you'll never, you know, you'll never need to use them. So they were free types of enjoyments to think about for product based business. And you can get the more than one policy say there's public liability insurance, which covers first party, property damage and injury caused by you or your business. So this kind of insurance as useful, if you go out and about say to meetings or events, or if people come and see you, I know at the moment I'm a record in this, in the UK and September, 2020 I'm. So let's be honest. We not going out and as far, as much as we wear and people probably out and come and see us as much as we were, but you know, the world is going to change hopefully, but its for example, I guess I'm talking about, if you run a physical store, if your attempt popups shop's fairs, markets, again, as things stand right now, maybe, or not doing these things, but perhaps that's something you want to do in the future.
It's worth thinking about having this kind of insurance. So I don't know if you're running a fair and you've got
a big stand set up and somebody trips over and hurts themselves. If you've got public liability insurance than someone can claim against, you can get into insurance. And even if you don't have any kind of physical presence and you never intend to you. So if you do, if you plan on purely selling online and you still do, you know, you still do have responsibilities, umm, that you need to be thinking about. So, and you're still liable for the things that you sell. You could still have, I dunno, some kind of accident and that wipes out your stock or your supply chain could still be effected.
I know that yesterday in particular, lots of people have had their supply chains effective by the pandemic. Umm, so is still worth thinking about having insurance. There is something called online retailers insurance fund that helps protect you in your business if there's a claim against you. And that also helps for things like, you know, when the unforeseen happens and you're out of stock because your supplier can't deliver for example. And then there's something called Product liability insurance and that covers damaged people and property cause by the products that you sell and that you're liable for. Say, for example, if someone gets hurt as a direct result of using your product and then there's also stocks that they were afraid actually for a cause there's also stocks and property insurance.
So that cost covers loss or damage if your stock and any equipment that you use. So for example, let's say you have a laptops running your business and that get stolen. Let's say you have some kind of equipment used to create your products and that gets stolen. Or if it gets damaged, I think it's really worth looking at having an insurance to cover all these different scenarios. I can only find two providers that offer protection that seemed suitable for online retail businesses and our link to both of those in the show notes and in the blog posts, obviously things might change on as in when they do I'll update those links as well. Both of the policies I like that also offered the option of adding additional insurance for your stocks.
If your insurance is how it is in a warehouse somewhere or evening, you know, in your garbage or in your spare room and also employers liability. If you have any staff working directly for you and something probably worth mentioning is if you're planning on using Amazon FBA, Amazon. So that's fulfilled by Amazon where Amazon hold your stock in one of their own warehouses and they fulfill it on your behalf. So Amazon do state that they will reimburse you if any stock is missing or damaged. But in my experience, they, especially, if you have a large number of skews and you know, a large amount of stock, they do move your stock around. It does get damaged.
You often do you get compensated for it, but not always. I've certainly had in the past a couple of units that have gone completely missing. And nobody seems though where they were in and you know, nothing ever turns up for, but nothing I've ever claimed to me, it's only ever been a few items, but having insurance still
does seem sensible to me because if you had a big issue, for example, hundreds of items were damaged or went missing, then obviously you want to make sure that you've got some sort insurance, so you can claim against that and get compensated for it. So that's insurance, as I say, you need to look into what policy is going to be best for you. What kinds of policy you need to, what kind of cover?
I would definitely recommend taking out some kind of insurance for your business. If not on day one, then definitely at some point down the line. So the second thing I think you need to think about, and we might have touched on this one, I spoke to Gemma is banking for your business because however you choose this set up your business. So when you decide to operate is a sole trader or if it's a limited company and you can go back to the interview of Gemma to find out more about the differences, you will need some kind of bank accounts. They are, you can send a mercy money. And I suggest it's probably worth thinking about what kind of bank and you might need at the outset. And obviously that can change. Say if you're running your businesses as a sole trader, it's fine to use your own bank account.
That's actually what I did initially. Although I did find fairly early on that it was much easier to have a separate bank account for sort of business transactions and keep it separate from my personal account. So you can sit up a separate account if you wanted to see if you're setting up as a business. So your, you know, your actually registered in as a company with, as a limited company or to have a kind of entity, you we'll need a business bank account. And obviously you can get I'm a business bank account on the highest, most high street banks and online banks. So there's plenty of options out there. I'm not going to go into that because that's obviously something that you couldn't look out and find the bank that will best suit you.
But the main reason I wanted to bring up the subject of bank and is I think one thing that's worth asking yourself now is we'll do you need to send a mercy foreign currency? And you might be thinking, well, why would I, so that's one of you sort of little scenarios. So if your sourcing your products overseas, you might well need to pay your supplier in the currency of that country. So if your sourcing in your life, for example, you'd be paying in your ways. And actually if you source your products from China, you will be quoted and possibly needed to pay in U S dollars. So that's something worth thinking about I'm the reason I say possibly needs pay in dollars is because if you're sourcing your products via Alibaba, which is a Chinese based sourcing site that I've mentioned before they do now give you the option to pay in pounds.
So I've done this a few times and say far, it looks pretty good. The exchange rate is comparable and sometimes better than what I'd get used in transfer wise, which is the other bank I use foreign currencies. And I'll talk to you a bit of, a bit more about that in just moment or two. Yeah. So it actually works out cheaper for me at the moment to send money to, to my supplier via Alibaba impounds using, using, I still use
TransferWise to do it than it does to send it in dollars, actually works out, not much cheaper, but a little bit and a passenger, I think every little bit counts. Another reason that you might want a bank account that can handle form and currency, it is if you're going to be selling globally or maybe just even in Your.
But if you're based here in the UK like me, because you might be receiving money in different currencies. So if you are taking payments through PayPal or Stripe or your own website, you can obviously receive it in pounds. Or if you're listening to us and us obviously can receive it dollars or whatever currency works for you, if you are selling, buy on Amazon. So payments from the European marketplace is for like, for example, will be sent to you as your res I'm. If you sell it on amazon.com at payments, we'll be sent to you and dollars. If you sell it in the UK, all of a century in pounds and that's regardless of where you're based in the world. So you really do want to a bank account in my opinion, that can deal with multiple currencies.
And because you've, you may well find yourself dealing with two or more say for this reason, I also use TransferWise, which is account. I mentioned earlier to manage my foreign currencies. So basically I have a UK account of them. This is all online to have a UK account or your bio account and a dollars account. And then I also have my main business bank account, which the UK high street bank, which I only use for the UK currency. So the majority of payments that I receive from Amazon or for PayPal, from payments at come by my website for a bit, for a product sales that I make most of my payments, do you come into my UK high street bank?
However, my payments I received from Amazon for my European sales going to transfer wise and you can then move money between your different TransferWise accounts. Umm, so if I'm paying as a supplier, for example, I used to pay them in dollars and I would use my transfer of account by account for that I would just, you can weave in transfer wise, convert the Your boss into dollars, make the payment I needed to make. Now I, as I say, typically pay my supplier in pounds, but I still use TransferWise to do that simply because the fees are actually less than if I was paying them the same amount of money from a high street bank.
Yeah. The fees are so low. So for me it makes much more sense. Even when I'm sending lbs, the fees are so much lower, that it makes much more sense to do that for transfer wise them from my sort of regular high street bank. So that's what I use that for is a free bank account. It's all in line for to easy to set up. There are other bank accounts that do similar things. You can have a look around for that. I used to use a different one, but I found TransferWise works a little bit better for me. And that's the one I'm easing now. But do you have a think about that? Because what I don't think you want is to, for Amazon, for example, say you're selling on Amazon and they're paying you in your Rose. If they're true, if they are paying that into a bank account, the
only Sterling so only handles pounds Sterling, then they are going to transfer that for you.
And you're probably not going to get a great rate. And then you also might get charged are definitely fees because they've had some convert that money for U. So if you believe you're going to be perceiving any money and anything other than you're back, you know, you're own carbon seed wherever you're based. I definitely think about getting a bank account that can handle that. Okay. I'm the third thing that I want you to think about is Applying for an EORI number if you need too. So this was a really big thing for me and something or other, I wish I'd known him in advance when I failed first got started, which is why I wanted to tell you about it now. Cause this is probably one of the single biggest mistakes I made. So Mineo RI is an economic operators, registration and identification number, which is a bit of a mouthful, probably why they call it EORI and it's needed to move goods between the UK and non there.
You can't trays and not having one can cause you all kinds of problems and delays and it can incur extra costs. So something that happened to me a few years ago, apologies if you've heard this story before, it's my first shipment of my product. It left China had to the UK to ages to get here. And then when I eventually did get to UK costumes, it was held for ages because I didn't have a DOI number or so I hadn't declared it. And I had a call from customs basically saying, we've received something for you, but unless you get your paperwork in order, its, you know, it's not coming in and it took a little bit of time to sort out. It's basically, it's just, it's just a number kind of how many digits or the number is maybe a, like an eight digit number that you need to give to your shipping company.
If you're Product, if your product is to produce outside, if the UK and you're shipping it to the UK. So it doesn't matter if your product is produced in China or your report anywhere else, it doesn't matter if it will be still within your house, in a warehouse or if it's going into an Amazon warehouse without any EORI it just won't get through customs. It's not getting here and you also need one. If your product is manufactured in the UK, but your plan to export it to other countries. So if you are planning on sending a shipment of your product's to a physical store in a different location, so let's say you're based in the UK and you are going to send some products to, or shop in Berlin to cell on your behalf, for example, or if your sending your products to your warehouse spaced in another country.
So it's really easy to do. You apply online and I'll put the link in the show notes, it takes about five to 10 minutes to apply. It's completely free and it takes around a week to get you a number of it. Then take around it up at 1248 hours until you can actually use it until it's activated. So my best advice to you is to apply to one for one, as soon as you know, you'll be needing one. So when you were at the stage where you're going to be arranging, you know, the final order, if your product's, if your product will be created outside the UK, that's
the point whereby it is applied for it because typically it's going to take at least a week possibly much longer than that for your product's to get here. And that will give you plenty of time to have it.
If you think you already have any EORI numbers, like say, let's say you've been selling products online for a while and you've been sourcing them elsewhere. Just double check that it starts to the GB. Because when I was research in this episode, I actually came across something on a government website that said that if your EORI are a number, doesn't start with a GB. It won't be valid after the 1st of January, 2021. And you have to apply for you. So have a quick look. I've looked at mine. I definitely think is something worth, you know, the few minutes it takes to check. And if it doesn't, you can apply for a new one now, and that is it. So as I promised a fairly quick episode is a, hopefully nothing too taxing or too complicated.
As I say, I think all of these are things that you can get set up fairly quickly. They were just going to take a bit of looking into and working out what's best for you as with everything I would say of than the L E O R I, which if you need one apply for it, if you're not sure you need one, still apply for it. But when it comes to banking and insurance, like with most beings, it's kind of better to do something and change it rather than spending ages, figuring it out. So when you're looking for insurance policies, for example, if you can find a policy that does everything you wanted to do, I'm even if your not sure what it's going to be the right one for you forever, if it's good for you right now, I would say, get it set up. And the same thing with banking, if you can find a bank that does what you want them to do, you go for it.
You can always change further down the line. I've changed business banks, both of my high street won and my won for hunting for income and say in the four years that my business has been running for various reasons, you know, you can change things. The most important thing is to just get something set up now, so you can keep going. Yeah. And on that note, please do keep going because yeah, it's really important that you do. So I really hope you've enjoyed this episode and found it useful. I really hope that this a few things you can go away now and take a look at, as I say deliberately kept it short. So you've got a little bit of time to do that. I would love it. If you could leave me a review for this Episode if you've got some time I'm if not just a quick rating, If listen on Apple podcasts.
You can just to just scroll down below this episode and they're you see a couple of stars and you can just give me a star rating. If you've only got a couple of seconds, that'd be really appreciated. So thank you so much. Just always, if you have any questions I'm, you can get in touch with me and I would love to help you out to have a fantastic day. And I was speak to you soon.