Another week, another excellent interview with one of our borrowers. Today’s interview is with Peter, a UK-based eBay seller and small business owner. His eBay store Toys & Games 4U has earned over 2950 reviews with a 100% positive feedback rating. To grow his eBay store further, Peter is looking to raise capital on Bitbond. His B-rated eBay loan is already well on its way to getting funded, so potential investors will need to act fast.
Thanks for taking the time to talk to us Peter! Could you start off by telling us a little about yourself and your business?
I run a business as a sole trader. The business is called Toys & Games 4U and is run via e-commerce. It sells toys, with an emphasis on vintage toys especially Lego(TM). Selling via e-commerce has shown real potential as one doesn’t need a physical shop, and one can now reach a worldwide marketplace.
I actually run my business from home – using several of my spare rooms and garage for storage, cleaning, sorting and building areas. I sell primarily through Ebay at this time (I hope in time to expand this to Amazon, as well as some specialist toy websites and a personal website in the future). As a business it is a strong and experienced one, having been run for over 13 years in some capacity. The business is backed by physical stock. The growth in asset value of this stock, especially Lego(tm) (but also of other vintage toys) as a commodity has been huge over the last 15 years.
The growth value of Lego can be seen via the Brickpicker website, and has been covered in many a financial investment article. The returns on offer are huge, although of course the market has seen growth of competition in recent years, as more traders move into toys, and I do expect the returns to average out somewhat over time, however, my store has always maintained a profit, and indeed has seen both revenue and profitability increases over time.
Having entered the market early and already built up a good stock and with good knowledge of the market I feel my store has real potential to grow. A lot of profitability in the market is based on knowledge of the market, and forecastability of what is likely to be a future hit. Or being able to look at bulk lots and see the potential profit. So knowledge is key, and a real competitive advantage and I feel I have this knowledge and experience and the time is right to drive it forward. Overall due to the rarity of vintage models and continued demand from both kids and adults, and the popularity of several key brands I think the future of the business is strong.
How come you ended up starting this business and why have you chosen this particularly niche?
I’m actually an adult fan of Lego (AFOL) and began as a collector of vintage Lego models, with no aim to turn it into a business in the beginning. I did buy in models I personally wanted, and noticed that if one bought in bulk, and built the models from parts then there was savings to be made, and potential profit to be made. This led me to setting up a Ebay store, to sell on completed models I had excess of, and indeed I found this covered my personal purchases plus generated a profit.
I began selling P/T to test the market, purchasing bulk Lego and rebuilding specific sets from this (I started out P/T as I’m also a fully qualified accountant!!) but have moved to full time since 2014 due to the demand and potential I have found in the market. I have grown only slowly up to now, but have gained much knowledge and experience, and now feel the time is right to really maximise the business potential. I still use the bulk purchase and rebuild method but also now invest in sealed sets, and loose minifigures as well.
The sealed sets and minifigures is something I can really expand on in the current market. Overall I find it really fun to buy in toys and models and sort and build or renovate toys and sell on. Its a great feeling to start a kid off on a vintage toy line they may otherwise not find, or help out a collector source a model they are after. The fact it is both fun and profitable is great incentive to me. It is also fun to sell to parts of the world where Lego can be hard to get or specific models were not sold.
What do you hope to achieve with your loan and why did you choose Bitbond over a bank?
I hope to strengthen my position in the market, and increase my visibility to potential customers. I would also like to expand my stock, of some the more popular elements of Lego trading in the current market, (ie sealed box sets and minifigures). As yet I have been unable to also expand fully into these due to lack of investment funds. I am likely in the small business trap of needing investment to actually expand/grow more quickly, as while current profits are reinvested, this clearly has limits to how quickly one can expand with, which in term limits profitability. An immediate loan will get us better prices on stock purchases and improve profit margins.
It will help to also improve my ability to keep products in stock, eliminate potential lost sales and boost monthly revenue. The overall goal is to improve sales from £80k in the prior year to over £100k-£120k in this year There were many reasons I choose Bitbond:- Bank loans are not available, or rare for e-commerce and retail outlets in general. Bank loans to small business since the financial crisis, are very hard to obtain. Bitbond is much more accessible than common loans and they have better knowledge on e-commerce ventures.
The fact Bitbond doesn’t rely on financial plans and credit ratings – instead linking to real data based from e-commerce outlets – is I believe a much better way of assessing the business loan viability. Bitbond offers clarity on funding and costs involved Bitbond is an interesting concept and I wanted to see its potential and how it would work It is a modern method of funding using direct P2P – meaning one is funded directly by individuals – this minimises risk to investors but also allows direct contact to your business backers. I think this allows for clarity to your backers and a real connection to them. It allows access to many small investors who can all offer a business a small loan sum which when combined helps achieve a sizeable loan for your business, without access to P2P market these small individual loans would never be accessible It offers access to worldwide funding.
What is your favorite feature on Bitbond? What features do you think are missing?
I’m very new to Bitbond, so haven’t uncovered every feature yet, but I think the fact that one can liaise direct with the backers of your business is a great concept. I do also like the fact the loan can be USD based and find the website easy to navigate and help and support documents easy to find and access. As for additional features:- An Option to upload financial plans/forecasts to investors direct on the website – to help demonstrate loan viability.
Advise on how to improve your loan acceptance in the bid marketplace (when creating auction) if it is likely to fail. Or a guide on best time frame and most accepted loan amounts that achieve funding – to help choose a loan amount to request in the first place. Advice on how individual rating is achieved and how to improve it, when setting up account. An option to amend loan requested to ensure acceptance if under 60% funded but over 10% funded within the auction timeframe.
Ability to extend auction timeframe for any under funded amount Ability to advertise my loan to potential investors or option get my loan highlighted to investors, via mail shot – personally I don;t know whether all potential investors are aware of a new loan – are there investors ready but unaware of my loan – how does one effectively sell my loan to investors – can I be sure at least everyone who might invest has had a chance to? Option to apply for more than one loan if for different purposes.
What would you want potential investors to know about your loan?
This loan will be used to maximise short term profitability by expanding into the current most popular and demanded of toys. Due to investing in the current high demand products the loan should be paid off early. I have real faith that the current market can support my business growth and return high profit and that my expansion plans can be achieved However contingency plans are in place if the sales then failed to materialise, and repaying my loan in any situation is a key point in my mind. Contingency is threefold.
Firstly my current sales and stock level all enable the repayment of the loan in any case over the 12 months My current revenue from continued trading is around £80k in year, with profit from this of just over £20k. So providing continued demand even at current levels the profit will cover the loan. If demand was to begin fading, my base value of current stock even if just dumped on the market would be in the region of £40k – since any loan would increase stock this value would be higher, so clearly this would repay the loan outright. Either way the loan value should be easily covered even in the worst case scenario.
My second contingency is my buy to let property portfolio – built up from investment of my employed income to date. My current portfolio of 4 homes generates an income of £17k per year. The profit here can be used to repay the loan if necessary. My third contingency is my professional qualification in accountancy and ability from this to gain employed work if necessary and my current freelance accountancy work which I have which massively cut back on but could be re-entered and expanded if necessary to repay the loan . Overall the loan would help me expand quickly and begin to maximise my business potential and I am then happy to effectively share my gain in profit with the return the investors will get from the backing of my loan.
What do you think the future holds for bitcoin? Is it the modern-day equivalent of the internet or will it fall flat on its face?
I think bitcoin has real potential and will eventually become a currency of choice worldwide in the very long term. It allows for ease of movement of currency worldwide and has excellent potential in the e-commerce sector which itself is the growing retail market.
It has seen slow growth to date, mainly I think due to lack of understanding of it, once it gains some mainstream retail support it will grow and become much more widely accepted.
Does your business accept bitcoin? If not, what do are the chances of that changing?
I trade mainly using paypal or IBAN from this perspective I dont believe direct bitcoin payment is accepted.
Personally I would be happy to accept bitcoin if there was (and this may be lack of knowledge on my part) an easy way to manage and process the transaction, both securely and with the end funds being available to be processed into a bank account or transferred into an other currency as well as being reusable as bitcoin itself.
Thank you for your excellent answers Peter. Potential only have a few more days to invest in this thriving eBay entrepreneur! Go to eBay loan.
Thanks for reading!