The Business Researcher Newsletter
February 27, 2006 Volume 9 Number 2
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Hello,
Welcome to the February issue of the BR Newsletter.
We continue to strive to upgrade our content and services. This month we migrated our web site to a new server. While the prep work was extensive the actual transfer went remarkably well. If I sound surprised by that fact it is because I, like most entrepreneurs, am suspicious of IT "upgrades" that are "easy" and "seamless".
The result of the new server is that the site now loads much faster. The enhanced performance is especially apparent within the Stats Link Canada database. (http://www.statslinkcanada.com)
Also new this month is the printer-friendly PDF version
of the BR Newsletter. Many of you have been suggesting this option for
some time so here it is:
http://www.gdsourcing.com/newsletter/Newsletter9-2.pdf
In future issues the printer-friendly link will appear in the table of content as it does above.
I hope you find this issue helpful.
John White
GDSourcing - Research &
Retrieval
The following site summaries were added to the GDSourcing web site over the last month.
ISP Planet
Site:
http://www.isp-planet.com
Site Summary:
http://www.gdsourcing.ca/works/ISP-Planet.htm
New and information on the ISP sector worldwide. Includes a ranking of
top ISPs in Canada.
Hill Strategies Research Inc
Site:
http://www.hillstrategies.com/
Site Summary:
http://www.gdsourcing.ca/works/Hill.htm
Data on the arts and culture sector in Canada.
International Olympic Committee
Site:
http://www.olympic.org/uk/index_uk.asp
Site Summary:
http://www.gdsourcing.ca/works/Olympics.htm
Data on Canadian Olympic metal counts and participation by Olympic
year.
The following statistics were released by Statistics Canada over the last month. We have listed those releases we feel are of the most interest to Canadian entrepreneurs.
Very few of these
statistics are available on-line. The URL listed is a direct link to the
press release associated with the data. It provides contact and ordering
information.
If you want to purchase
any publication related to these releases please see our web site:
http://www.gdsourcing.com/works/StatCan.htm
We offer a 20% discount on most Stats Can publications and a 10% discount on Stats Can electronic products. For more information you can reach us at contact@gdsourcing.com. Put "StatsCan" in the subject line of your e-mail.
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For a complete list of all Stats Can releases click here: Stats Link Canada |
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AGRICULTURE
Potato production
2005 (revised)
http://www.statcan.ca/Daily/English/060113/d060113c.htm
A
Geographical Profile of Manure Production in Canada, 1981 to 2001
http://www.statcan.ca/Daily/English/060113/p060113.htm
Agriculture value added account 2004 (revised)
http://www.statcan.ca/Daily/English/060118/d060118c.htm
Farm business cash flows 2004 (revised)
http://www.statcan.ca/Daily/English/060118/d060118e.htm
Farm Financial
Survey, 2004
http://www.statcan.ca/bsolc/english/bsolc?catno=21F0008XIB
Blue skies for blueberries 1980 to 2004
http://www.statcan.ca/Daily/English/060130/d060130c.htm
Fruit and vegetable production Fall 2005
http://www.statcan.ca/Daily/English/060210/d060210e.htm
Wool disposition
and farm value 2004
http://www.statcan.ca/Daily/English/060215/d060215g.htm
Hog
Statistics, 2006
http://www.statcan.ca/bsolc/english/bsolc?catno=23-010-XIE
Sheep
Statistics, 2006
http://www.statcan.ca/bsolc/english/bsolc?catno=23-011-XIE
Cattle
Statistics, 2006
http://www.statcan.ca/bsolc/english/bsolc?catno=23-012-XIE
BUSINESS SERVICES
Industrial Research and Development: Intentions, 2005
http://www.statcan.ca/bsolc/english/bsolc?catno=88-202-XIE
Canada's retirement income programs
http://www.statcan.ca/Daily/English/060207/d060207b.htm
Surveying and mapping services 2004
http://www.statcan.ca/Daily/English/060208/d060208b.htm
Provincial distribution of federal expenditures on science and technology
2003/04
http://www.statcan.ca/Daily/English/060210/d060210d.htm
Survey on Financing of Small- and Medium-sized Enterprises
2004
http://www.statcan.ca/Daily/English/060221/d060221b.htm
CONSTRUCTION
Investment in non-residential building construction Fourth
quarter 2005 and annual 2005
http://www.statcan.ca/Daily/English/060117/d060117a.htm
The age of Canada's public infrastructure 1963 to 2003
http://www.statcan.ca/Daily/English/060130/d060130b.htm
Real estate
agents, brokers, appraisers and other real estate activities industries 2004
http://www.statcan.ca/Daily/English/060131/d060131c.htm
Building permits
Annual 2005 (preliminary) and December 2005
http://www.statcan.ca/Daily/English/060206/d060206a.htm
Private and public investment 2006 Intentions
http://www.statcan.ca/Daily/English/060223/d060223b.htm
EDUCATION
Commercialization of intellectual property in the higher education sector 2004 (preliminary)
http://www.statcan.ca/Daily/English/060127/d060127e.htm
Registered apprenticeship training programs 2003
http://www.statcan.ca/Daily/English/060207/d060207g.htm
The lesser known private colleges 1993 and 2003
http://www.statcan.ca/Daily/English/060217/d060217c.htm
HEALTH
Access to health care services January to June 2005
http://www.statcan.ca/Daily/English/060131/d060131b.htm
Seniors' health care use 2003
http://www.statcan.ca/Daily/English/060207/d060207a.htm
Predictors of death in seniors 1994/95 to 2002/03
http://www.statcan.ca/Daily/English/060209/d060209a.htm
How Healthy are
Canadians?: Annual report 2005.
http://www.statcan.ca/bsolc/english/bsolc?catno=82-003-SIE
Accessing first-contact health services 2003
http://www.statcan.ca/Daily/English/060213/d060213a.htm
Aging, health and work 2003
http://www.statcan.ca/Daily/English/060222/d060222b.htm
Mortality, summary
list of causes, 2000
http://www.statcan.ca/Daily/English/060223/p060223.htm
HOSPITALITY
How technology and global conditions affect the Canadian travel industry
http://www.statcan.ca/Daily/English/060112/d060112c.htm
Annual Survey of Traveller Accommodation
2004 (revised)
http://www.statcan.ca/Daily/English/060206/d060206c.htm
Travel arrangement services 2004
http://www.statcan.ca/Daily/English/060208/d060208a.htm
Food services and drinking places
http://www.statcan.ca/Daily/English/060217/d060217d.htm
INFORMATION TECHNOLOGY
Annual Survey of Software Development and Computer Services
http://www.statcan.ca/Daily/English/060126/d060126b.htm
JUSTICE
Offences against the administration of justice
1994/95 to 2003/04
http://www.statcan.ca/Daily/English/060111/d060111a.htm
Maintenance Enforcement Survey: Child and spousal support 2004/05
http://www.statcan.ca/Daily/English/060125/d060125a.htm
Legal aid 2004/05
http://www.statcan.ca/Daily/English/060207/d060207c.htm
MARKET
Multipliers and outsourcing: How industries interact with each other and affect GDP
http://www.statcan.ca/Daily/English/060112/d060112b.htm
Population estimates by marital status and legal marital status, age and sex
2002-2005 (July 1)
http://www.statcan.ca/Daily/English/060120/d060120b.htm
Labour market shifts in manufacturing, construction and natural resources
2002 to 2005
http://www.statcan.ca/Daily/English/060127/d060127c.htm
Population Projections for Canada, Provinces and Territories, 2005 to 2031
http://www.statcan.ca/bsolc/english/bsolc?catno=91-520-XPE
Estimates of the number of census families July 1, 2005
http://www.statcan.ca/Daily/English/060206/d060206b.htm
Financial and taxation statistics for enterprises
http://www.statcan.ca/Daily/English/060207/d060207d.htm
The Impact of Macroeconomic Conditions on the Instability and Long-run
Inequality of Workers' Earnings in Canada
http://www.statcan.ca/bsolc/english/bsolc?catno=11F0019MIE2006268
Labour Force Historical Review on CD-ROM 1976-2005
http://www.statcan.ca/Daily/English/060220/b060220a.htm
PRIMARY
Electric power generating stations 2004
http://www.statcan.ca/Daily/English/060112/d060112e.htm
Coal production 2005 (preliminary)
http://www.statcan.ca/Daily/English/060213/d060213e.htm
TRADE
Quarterly Retail Commodity Survey
http://www.statcan.ca/Daily/English/060111/d060111b.htm
New motor vehicle sales December and annual 2005
http://www.statcan.ca/Daily/English/060214/d060214a.htm
Canada's trade in beer 2003
http://www.statcan.ca/Daily/English/060215/d060215b.htm
Monthly Survey of
Large Retailers December and annual 2005
http://www.statcan.ca/Daily/English/060217/d060217b.htm
TRANSPORTATION
On the road again,
a profile of truckers 2004
http://www.statcan.ca/Daily/English/060127/d060127b.htm
Road motor vehicle registrations 2005 (preliminary)
http://www.statcan.ca/Daily/English/060202/d060202b.htm
Aircraft movement statistics 2005 (preliminary)
http://www.statcan.ca/Daily/English/060203/d060203a.htm
Large urban transit December and annual 2005 (preliminary)
http://www.statcan.ca/Daily/English/060215/d060215f.htm
Trucking industry 2004
http://www.statcan.ca/Daily/English/060213/d060213b.htm
Railway carloadings December and annual 2005
http://www.statcan.ca/Daily/English/060221/d060221d.htm
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References in this article have been sourced from the Stats Link Canada database |
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We have all heard the story of the person who found a Picasso at a flee market and sold it for millions but if you are thinking of starting a business in the Second-Hand sector your success will need to be based on more than a lucky find. Any dabbler can make a bit of money buying and selling used merchandise. We have all had the thrill of earning a few dollars from a garage sale. If however your are intent on a successful sustained second-hand merchandise business you need to do your research!
The Second-Hand and Antiques sector in Canada now generates more than $1.4 billion a year in sales. Between 2000 and 2003 it experienced some of its most rapid growth in recent history. Sales grew by 33.2% more than doubling the rate of overall retail growth (15.1%).
Since 2003 however it has slowed dramatically. This short-term "surge and slow" appears to coincide with the initial popularity of online auction sites such as eBay and then the consequent maturing of the online second-hand market. It is worth noting that despite the slowing rate of growth the market gains have not disappeared. Overall second-hand commodity increases are simply more in line now with typical sales growth at second-hand merchandise stores.
Source Statistics Canada
Source Statistics Canada
The financial performance of second-hand merchandise stores has never been particularly spectacular. Since 2000 when store sales grew by 3.4% annual growth rates have dropped below 2%. During that same period the percentage of business that were profitable hovered around 60%, well below the retail average of 68%. Among profitable small second-hand retailers the average annual net profit is $24,500. Entrepreneurs in this sector are generally pursuing a passion as opposed to raw profit.
The key to operating a successful second-hand merchandise business is to focus in a specific area. This could be a specific product type, product style, collectible category etc. Start by looking at what your interests are and where your knowledge base lies. The only way to make money at this type of business it to recognize profit opportunities - products that are undervalued which you can then in turn resell for a profit at their true market value. Do not underestimate this skill. It has nothing to do with "lucky finds" and everything to do with knowing where to look, what will sell and when to buy.
I have a friend who deals in high-end silver. She watches eBay and estate auctions closely and purchases when she recognizes a profit opportunity. She then resells the items in other off-line auctions or directly to silver dealers and collectors. The business model would not work if she did not have a strong knowledge of silver values both on eBay and among local collectors. The added benefit of specializing is that she has developed a solid reputation within the local market as a reliable source for quality silver. Dealers now often approach her to find product for them. The sale is made before she even buys the item.
Once you have determined the types of products you have the greatest understanding of you need to conduct research into those product types. One of the best ways to do this is to look at auction records. Prices captured at auction are generally below retail market value but they can act as a barometer of demand and pricing pressure.
All reputable auction houses publish their auction results a few days after an auction has closed. These are made available to anyone who requests them. In some cases it will simply be a printed page with lot numbers and sold prices on it. In this case you will need to view the auction catalogue to know what each lot represents.
Some auctions houses however are now posting their results online. Many are integrated with images from the original catalogue which makes researching market demand and valuation extremely easy. For example see the Ritchies web site: http://www.ritchies.com/apps/index.cfm?page=auction.results It provides you with the estimated value as well as the sale price. Lots without a sale price did not sell.
You can also view auction results in eBay. Search for the product type you are interested in selling then in the left column search panel click on "Show only: Completed Listings" The results page lets you know how many people bid on items (you will note that many items have 0 bids), whether or not the item sold, the final price, shipping costs and the end date. There is even a feature that lets you "view similar active items", in other words what is currently being bid upon.
From these sources you first want to determine whether or not your chosen product types are selling. If they are selling what prices are the items achieving? Are they selling at a price that allows you to have a profit margin high enough to be a viable business model.
You also want to figure out what products and product features are attracting the most bids? Profit margins are important but so are rapid turnover rates. They are vital for any type of retail business but especially for second-hand merchandise. No matter how cheaply you source a used product, you do not want to become stuck "storing" it. Storage costs money and will impact your margins and business success.
Talk directly to appropriate dealers, vendors and retailers at various venues. Are there certain products types or features that are in demand and selling well. Identify opportunities that exist and that match your expertise. By talking directly to people you are not only researching the market but expanding your business network which in turn will help drive business in the future. If you can source hard to find product that these merchants are looking for they may turn from vital contacts to steady clients. If you are planning on selling a product line that is entirely different to their business, you may be able to secure future referrals from them. Never underestimate the power of networking!
Your research should also include the "first-hand" retail environment. In some cases your market will be looking at second-hand merchandise as a cheaper alternative to new. In this case you will want to have an clear understanding of overall demand and current retail prices. In other cases your market will be looking for products that are no longer available in the first-hand market. Again you will want to have knowledge of the first-hand options that might be considered comparable or inferior.
For basic information on gift product sales you may find the MarketPulse reports from the Canadian Gift and Tableware Association of some interest. These reports identify trends for specific product types sold at gift stores (e.g. Framed art & prints, photo frames, formal tabletop, collectibles, Canadian-made, figurines, small furniture). Many of these retail products are also sold within the second-hand sector. These reports include information such as the % of gift stores that stock these items, best selling price range by product type, and % of stores that plan to buy more of specific product types in the next 12 months. See: http://www.cgta.org/cgta_retailnews_marketpulse.asp
If you are selling non-gift type second-hand merchandise you should look for similar retail reports that are related to the first-hand market. The easiest way to do this beyond first hand knowledge (talking to vendors and suppliers directly) is to use a periodical search. Relevant articles will help to identify key players in the market as well as purchaser participation and trends.
You can conduct a periodical search in your local library or via their web site. All you need to access these databases from home is a valid library card. To find your local library on-line see: http://www.collectionscanada.ca/gatepasse/
Used Merchandise stores fall under the NAICS code 453310. This distinct code lets you access appropriate financial benchmarks for this store type. These let you gauge performance against an industry standard or help you to establish reasonable cash flow estimates for a business plan.
The Performance Plus web site (http://www.sme.ic.gc.ca) provides 2002 benchmarks for incorporated and unincorporated small businesses. There is no charge to access this data.
Canadian Industry Profiles also cover Used Merchandise stores. These profiles provide the most current time series data on business counts and financial performance that are available. For more information see: http://www.gdsourcing.ca/CIP/CIP-44-45.htm
Canadian Market Estimates can also be of assistance for two used merchandise categories: Antiques and Collectors' items (e.g., stamps, coins). These reports are based on an annual survey of household spending. They provide insights such as in 2004 households with income over $100,000 a year represented 76.6% of the antique market and that 4.3% of Canadians reported purchasing Collectors' items. For more information see: http://www.gdsourcing.ca/SBDC.htm#CME
Prior to 2003, the Canadian Market Estimates reports covered the expenditure category: Used Computer Hardware. If you would like further information on this data please e-mail me at contact@gdsourcing.com
In addition to the resources listed above there are a number of niche guides that can assist
you. They cover everything from eBay strategies
Serious money can be made by serious entrepreneurs in the second-hand sector. You need a passion for knowledge and the drive to pursue it. Like any business venture thorough research is vital.
Competitive Intelligence is a vital part of business research. According to a Statistics Canada study, one of the major factors that contributes to the failure of new micro businesses in Canada is underestimating the strengths and market share of your competitors.
If you are importing products into Canada, the Industry Canada Importer Database can be a useful research tool for competitive intelligence. (http://strategis.gc.ca/sc_mrkti/cid/engdoc/index.html) It provides a list of the top 80% (in terms of $ value) of companies importing goods into Canada, by product, by city and by country of origin. It also identifies market concentration which is the number of businesses that make up various percentage shares of the overall import value.
For example the following market concentration table is
provided for the product grouping:
3924900040 - Flower pots, of plastic
| Number of Importers | Value of Imports ($CDN) | Cumulative % of Imports |
|---|---|---|
| 3 | 11,398,477 | 44.81 |
| 6 | 15,636,846 | 61.47 |
| 10 | 18,473,496 | 72.62 |
| 17 | 20,333,778 | 79.93 |
| All | 25,439,975 | 100.00 |
In other words 3 companies account for 44.81% of the total import market for this product. This helps you to identify whether your marketplace is dominated by a few companies or whether concentration is less pronounced.
The report also lists the following companies as making up the top 80% of businesses in this product grouping:
| Company Name (alphabetical order) | City | Province | Postal Code |
|---|---|---|---|
| CANADIAN TIRE CORPORATION LIMITED | Brampton | Ontario | L6T 4L5 |
| COSTCO WHOLESALE CANADA LTD | Ottawa | Ontario | K2E 1C5 |
| DURACO PRODUCTS INC | Forest Park | Illinois | |
| FIELDS STORE A DIV. OF HUDSONS BAY | Richmond | BC | V6V 1W1 |
| GARANT GP | St.-Francois-de-la-Riviere-du-S | Quebec | G0R 3A0 |
| HOME DEPOT OF CANADA INC | Toronto | Ontario | M5B 2M6 |
| I T M L INCORPORATED | Brantford | Ontario | N3T 5M8 |
| JACK VAN KLAVEREN LIMITED | St. Catharines | Ontario | L2R 6Z4 |
| LA MAISON DES FLEURS VIVACES | Saint-Eustache | Quebec | J7R 4K6 |
| PLANT PRODUCTS CO LTD/LES PRODUITS DE PLANTE CIE | Brampton | Ontario | L6T 1G1 |
| POTTERY EXTRAVAGANZA (CANADA) INC | Mississauga | Ontario | L5T 1N8 |
| RENO-DEPOT INC | Montréal | Quebec | H2R 2Y8 |
| RONA INC | Saint-Laurent | Quebec | H4R 1P8 |
| TIMM ENTERPRISES LIMITED | Oakville | Ontario | L6J 4Z5 |
| UFG SUPPLY SALES | Burnaby | BC | V5J 5E2 |
| WAL-MART CANADA CORP | Mississauga | Ontario | L5N 1P9 |
| WESTGRO SALES INC. | Delta | BC | V4G 1B6 |
You will note that the information about the companies is limited. No financial nor import share detail is provided. These companies, listed alphabetically, simply represent 80% of the import market. The reason for the suppression is primarily to protect confidentiality. Despite the scant detail however this is still a valuable competitor list as it identifies the key players in the marketplace.
The Importer Database also allows you to search by product and country of origin. So for example if you want to know the top companies importing Electric Toy Trains from the U.K. the Importer Database tells us that the total value imported from the U.K. in 2004 was $344,254 and the top 80% of importers were:
| Company Name (alphabetical order) | City | Province | Postal Code |
|---|---|---|---|
| ACADEMY PRODUCTS CANADA INC | Concord | Ontario | K4K 2T4 |
| BRITISH SCALE MODELS (CANADA) LTD. | Vancouver | BC | V6S 2C2 |
| BRITTANIA MODELS | New Westminster | BC | V3M 1E5 |
| DON'S HO SERVICE (95) | Moncton | New Brunswick | E1G 1T3 |
| FEDERAL EXPRESS CANADA LTD | Mississauga | Ontario | L4W 5K6 |
| LINTON'S ROUNDHOUSE WAREHOUSING INC | Burlington | Ontario | L7L 4X8 |
| MODEL RAILWAY IMPORTS | Oakville | Ontario | L6J 5C1 |
| P. M. HANSEN LTD. | Richmond | BC | V7A 4S5 |
| WM. K. WALTHERS, INC. | Milwaukee | Wisconsin |
The product detail is provided at a 6 and 10-digit HS level. If you are not familiar with the HS coding system, the database allows you to search by keyword at a 6-digit level. Make sure that once you click on an appropriate 6-digit code you also click on the "Drill down to HS10 product code level" button. It will let you know what further product detail is available. With the plastic flower pot example above we started with the HS-6 code 392490 - Household & Toilet Articles NES - of Plastic. We then drilled down to 3924900040 - Flower pots, of plastic.
If you are still uncomfortable with HS codes look at the
About Product Codes section:
http://strategis.gc.ca/sc_mrkti/cid/engdoc/about_product_codes.html
The Importer Database can also be used to identify the top 80% of importers by city or by country of product origin. This portion of the database however does not include product detail. It is only useful if you want to identify the top importers within a certain jurisdiction or from a specific region. So for example the total value of imports by companies based in Welland, Ontario is $213.2 Million. The top 80% companies are:
| Company Name (alphabetical order) | Postal Code |
|---|---|
| ATLAS STAINLESS STEEL | L3B 5R7 |
| BOSCH REXROTH CANADA CORP./CORPORATION BOSCH REXROTH CANADA | L3B 5X7 |
| GENCORP CANADA INC | L3B 5R9 |
| VESUVIUS CANADA INC. | L3B 5P4 |
A similar report could be generated to determine for example the top companies importing from Argentina.
This resource does not provide you with all the competitive intelligence you will need to succeed as an importer or wholesaler. It does however provide you with a good starting point. Now that you know who the major players are you can use readily accessible resources such as the Internet, periodical databases and publicly available financial information (e.g. SEDAR: http://www.sedar.com) to start researching the individual companies directly.
Each Business Researcher Newsletter ends with a collection of five statistics related to Canadian small businesses.
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Click here to see the latest Canadian Small Business stats referenced in the Stats Link Canada database. |
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1. What % of Canadian business owners reported greater stress levels now as
compared to one year ago?48% (Global Average 57%)
Source: Grant Thornton (Feb 2006)
2. What was the average number of holiday / vacation days taken by Canadian
business owners last year?
17 days (Global Average: 16 days)
Source: Grant Thornton (Feb 2006)
3. What is the total IT (hardware, software & services) spend projected for Canadian
small businesses in 2005 & 2005? What is it for medium and large businesses?
|
Total Canadian IT Spend by Business Size $Billions |
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| 2005 | 2006 | % change | |
| Small | $12.9 | $13.0 | 2% |
| Medium | $23.9 | $22.9 | -4% |
| Large | $4.6 | $4.9 | 7% |
Source: Ipsos-Reid (Feb 2006)
4. How fast has self-employment grown since 2003?
+8% (double the rate of growth in the number of paid employees)
Source: CIBC (Jan 2006)
5. How many Canadian small businesses do their accounting manually?
Nearly one million
Source: Intuit Canada (Jan 2006)
G D S O U R C I N G - R E S E A
R C H & R E T R I E V A L
* www.gdsourcing.com *
contact@gdsourcing.com *
Copyright 2000, 2001, 2002, 2003, 2004, 2005, 2006 GDSourcing - Research & Retrieval. All rights reserved. You may circulate this newsletter freely as long as GDSourcing is clearly credited as the source. We encourage people to subscribe directly. There is no charge for this newsletter. A subscription form is available at http://www.gdsourcing.ca/newsletter.htm