Q. I want to start up an online hamper business selling other people’s products. The problem is I don’t know the first thing about purchasing for a business. How does it work? I would like to purchase my items locally from trade fares but might also want products from overseas.

A. I think the first thing you need to do is some market research: for example, what other companies are already operating in this area? How successful do they appear to be? What are they doing well? What are they not doing well or ignoring? What business models are they using? Is the market growing, static or declining? What segments are there to the market and which segment looks the most attractive for you?

When I google “hampers online” I get many, many companies that are already active in this market. This is good in that it indicates that this is likely to be a viable market sector, however the downside is that you are going to have a lot of competition and you need to know how you will differentiate yourself in order to stand out and be successful.

As you will be handling food for human consumption, you need to comply with the appropriate food and drink regulations in your state. You will almost certainly need to register and obtain licences and you will probably need to undertake training in food handling. The premises you will use need to be compliant and certified.

Purchasing goods for a business is not so different from buying items for your personal use. You will need to seek out the possible sources of supply and then negotiate with them over discounts and other supply conditions. As you will be a business with no trading history, most suppliers will be unlikely to offer generous discounts or payment terms – most will insist on cash payment on delivery until you have established track records with them.

You may find, as do many hospitality businesses, that they can often source items cheaper at discount retail outlets such as Costco and Aldi than they can from a wholesaler.

You can also source items from wholesale food and vegetable markets, however you will need to get used to very early starts to your days.

You will need to do your research on sourcing food items from overseas. You must be sure that the items are acceptable to AQIS for import to Australia and find out if you need to obtain an import licence. You will also need to determine the conditions that must be satisfied in order for you to sell these good locally, eg. labelling changes, etcetera. You may be able to source many foreign-sourced items from Australian importers.

Good luck with your business planning.

Guy Ward

Small Business Mentoring Service