From the April 1999 issue of Startups

Q: I'm starting a computer-resale business and am attempting to research all aspects of setup, purchasing, licenses, reputable wholesalers and so on. I would appreciate any information or advice.

A: A successful computer-resale business requires experience and a business plan. Here are some resources to get you started:

  • Dakota Micro (http://www.laptopsetc.com/sellcomputers.htm), a computer wholesaler in Memphis, Tennessee, provides a quick guide on how to put together your own computer-resale business. Call (901) 368-3771 for more information.
  • Starting Your Business (http://www.toolkit.cch.com/text/P01_0000.stm) takes you through the process of starting a new business, from thinking about and planning it to actually doing it.
  • First Steps: How to Start a Small Business (http://www.sba.gov/starting/steps.html) takes you through the process of developing a business plan. For more information, contact the SBA at (800) 8-ASK-SBA.
  • Entreworld.org (http://www.entreworld.org/Content/SYB.cfm) includes the resources you need to build a good foundation for your business.
  • Entrepreneur magazine (http://www.entrepreneurmag.com) gives expert advice on management, marketing, technology and more. You can also order the book Start Your Own Business (Entrepreneur Media Inc., $24.95) on this site.

    Once you've put together your game plan, you need a resale permit. The National Association of State Information Resource Executives, an organization for information-resource executives and managers nationwide, has a directory of government agencies that grant permits listed by state on its Web site (http://www.nasire.org/stateSearch/index.cfm).

    "The hard part is finding the right specialty distributor to match your own specialty market," says Kevin King, owner of Disk-Count Data, a computer-resale business in Sacramento, California. "Choosing the wrong distributor could [put you] out of business very quickly. Part of getting good pricing is making sure you're buying from companies whose primary business is selling direct to licensed resellers--not a company that says it's wholesale but sells to end users at the same price."

    In 1986, King started his business with just $1,500. Today, Disk-Count Data sells the Computer Resellers Kit, an ongoing software subscription service that contains a comprehensive listing of wholesalers in the United States and Canada. Subscribers receive monthly updates. For information, visit http://www.rs-kit.com or call (916) 381-8746.

On The Level

Q: I've found a fantastic product with sole source rights in the United States and Canada. I'm looking to set up a direct (multilevel) marketing plan. Where do I get the necessary information to properly and legally do so?

A: Michael Sheffield, president of Sheffield Resource Network, a Tempe, Arizona, management consulting and product sourcing company for the direct-selling industry, says start-up steps and costs include registering with various states; trademarking your business and/or product; buying or manufacturing your products; maintaining inventory; designing packaging; developing a distributor kit and materials; hiring a staff; and advertising.

Four states-- Wyoming, Massachusetts, Louisiana and Georgia--require multilevel companies to register prior to starting operations, says Kevin Grimes, an attorney with Grimes & Reese PLLC in Idaho Falls, Idaho. For details, contact the secretary of state or the attorney general's office in those states.

If you plan to do business in more than one state, consult an attorney about foreign corporation statutes--state laws that require you to register as a foreign corporation if you do business in a state outside the one in which you're incorporated. An attorney can also tell you if you need to collect and remit sales tax to the various states. Last but not least, you should have an attorney or other qualified expert review your distributor-compensation plan to ensure it's in order.

  • The following organizations can offer additional information:
  • Multi-Level Marketing International Association (http://www.mlmia.com) is a nonprofit trade organization for the network-marketing industry. Call (949) 854-0484.
  • Direct Selling Association (http://www.dsa.org) is a national trade association for companies that manufacture and distribute goods and services sold directly to consumers. Its Web site includes industry facts and a code of ethics for the industry. Call (202) 293-5760.

    Contact Source

    Grimes & Reese PLLC, (208) 524-0699, http://www.mlmlaw.com