When we started selling on eBay in 2008, we had no idea what we were doing. If there were online tutorials or Youtube videos about eBay, we didn't know about them. There were the eBay Forums, but they were mainly full of negative stories of how eBay was actively trying to destroy sellers. (It never made sense to us that people were selling on the platform if they actually believed this.)
So because we were ignorant, we were looking for a low risk way to begin. This meant we chose to spend very little on our inventory. We found local church thrift stores overflowing with donations that had "bag day" sales to move their inventory. We found yard sales with many items for under $1 because people just wanted the stuff gone. We found auctions where entire households were sold off in a couple hours, and we could buy boxes of stuff for under $10. We found estate sales that discount 75%+ on the last day, allowing us to fill our car for the cost of a meal.
This is why we called ourselves Scavengers because we often were buying the items that no one else wanted. But this didn't mean these items were worthless. If we did the research and put these items in the right context so the right buyers would find them, we could make serious money. We became very good at selling something for $30+ that we bought for $1 or less. And every month we would even sell items for over $100 that cost us just as little.
Since we've always been frugal and rarely go out to eat in restaurants, we always have $30 to spend on inventory. We've never wanted to buy an item and not had the money. We've never been in the position of needing to liquidate inventory so we could have more cash to buy more items. We've never put inventory costs on credit cards. This is how we discovered our "list it and forget it" strategy. It doesn't matter to us when any particular item sells, as long as something sell each day. We learned that if we had a large enough inventory, then items do sell every day. Our experience since 2008 has proved our strategy to be effective.
Time is our big investment. It takes time to take a pile of "junk" and figure out the value of each item. Takes time to photograph. Takes time to write a proper description that will attract the right buyer. This is certainly much more work than just scanning and sending into Amazon, but the profit margins are incredible with very low risk.
One question we're always asked is: "If you could buy an item for $50 and make $500 quickly, wouldn't you do it?" Of course! But we find these opportunities very rare. Could you jump in your car right now, go to a thrift store or auction, and buy up these miracle $50 items that will sell for $500? For some reason, people are willing to give away items worth $30, but items worth $200+ have too much value to just let go. We do find these deals from time to time, but they're rare for us.
Some sellers really know a particular niche and have learned to pay big money for lots of specific items. They know how to part out the gear, or refurbish it, or simply know the items true value. They may pay $1000 for a box of items, knowing they can make $5000. Knowing a niche deeply is a real advantage.
Our point is simply that not spending much money on inventory takes one less stress out of running a business. Your miles may vary.
Here are the links we mentioned in the podcast:
--This is the blue tooth scanner we just bought to scan books for Amazon:
--Chris the Dollar Flipper sent us a link to this video of a kooky eBay seller.
Our Store Week August 14-20, 2016
- Store #1
- Total Items in Store: 4,134
- Items Sold: 32
- Cost of Items Sold: $55
- Total Sales: $1,315.81
- Highest Price Sold: $175 (Golf Bag)
- Average Price Sold: $41.11
- Returns: 0
- Money Spent on New Inventory This Week: $25
- Number of items listed this week: 80
- Amazon FBA Store
- Number of items sold: 16
- Amazon total sales: $209.35
- Amazon FBA Fees: $71.31
- COGS (shipment to FBA included): $25
- Net profit after COGS: $113.04
- Sold 0 items for 0 ----------
- Store #2
- Total Items in Store: 1104
- Items Sold: 2
- Cost of Items Sold: $3
- Total Sales: $139.99
- Highest Price Sold: $100 (vintage lamp)
- Average Price Sold: $69.99
- Returns: 0
- Number of items listed this week: 0