Business Loans

[Ashana]

I know debt free is ideal here, I’m always striving for this, but I’m kind of seeing a business loan as betting on myself. Do any of you have advice?

I’m coming to an end for financial support, but Ebay has yet to provide enough to pay my bills. I am confident about it, but it’s more of a matter of when things sell. I don’t intend to give up, I’m just facing a money flow situation.

I know that if I could pay myself hourly it would relieve the stress on my partner.

I’m sure I can convince my partner to hold on a little longer, but if I don’t look at my options I could potentially hurt my relationship. He is fully supportive of Ebay. I just don’t want to take advantage of good will and not pull my weight.

This all said, I’m expecting the next Quarter to be much better, and I can wait to find out. I just like to think about things ahead of time.

Thank you!

• This topic was modified 3 years, 10 months ago by Ashana.

[Jay]

–Is then business loan just to pay your daily expenses like rent/food/fuel?
–Or will the loan help you by more inventory or another way to expand?

–How much will you borrow and at what rate?
–How do you plan to pay it back?

–How many items are in your store now?
–What is your monthly average net profit after COGS?

[Ashana]

Well I have a few goals, Ideally I’d pay myself just enough to pay my living portion which is around $1000/month (rent, insurance, food, taxes). All other money would be used to Pay the the loan back, buy new inventory, and possibly look into new storage options. Currently I use my master-bedroom as my office/storage area (14’x11′).

I’m thinking 20K would be all I’d want to borrow, and I have not done too much research on rates, but I’m hoping for something under 10% (this is probably a pipe dream).

I’d pay back the loan using the profits from the sales, hopefully, over the next 1-2 years, with a higher payment than required.

Currently at 765, about to hit 800, Pushing to get to 1000 in the next few weeks. It’s taken me a bit to get really organized and now my system is set up for optimal listing.

Average Net profit is about $20-25 per Item, I’ve only sold 33 items in the last 31 days. (I am always looking for higher quality items, and many of my newer Items are much better quality than my older ones)

unfortunately, they tend to be more obscure clothing items. I love selling vintage dresses, but because they aren’t super popular brands, it seems take awhile for people to find them. Also, I only just started listing a lot in July, which seems to have been a really slow month in general. I have started to offer Free Shipping on anything under 1 lb. In addition, I give measurements for all clothing items.

[Jay]

Unless you take out an equity loan on a house you own, the only way I see you getting a business loan is through Working Capital: https://www.paypal.com/workingcapital/
Based on your current sales, I dont see them loaning you $20k.

I would not recommend taking out a business loan just to pay your living expenses. I especially do not recommend taking out a loan and using the loan to pay back the loan. Because if you arent making money now, you wont make money in six months without a change in your strategy.

If you’re listing obscure vintage clothes that doesnt sell quickly, then continuing this kind of selling will not make you more money. Clothing is super competitive. Vintage clothing is even more so. Sellers who do really well in this market are marketing all over Instagram which is another job in itself.

If you sold 33 items at even $20/each, that’s $600. You’re not far from $1000/month if thats your minimum goal.

My advice:
–Working two 8-hour shifts a week for $15/hr makes you about $1000 month. The rest of the week you can pour into your eBay business. No loan needed.

–Change up what you scavenge and sell. We have the cool weird stuff and vintage clothes, but we also have a lot of common bread and butter items. Shoes are a great source of sales. Our goal is to not be precious about what we sell as if it reflects on our taste, but to find and sell things that will make us money.

–We had to be honest with ourselves about how much we could make with the time we could commit. Work 40 hours a week for several months, and money should come in. But if we work only 10 hours a week, its not a surprise that we wont make much money. It’s definitely not easy. It’s work like anything else.

[Ashana]

Thank you for your advice! I’m pretty motivated to live as debt free as possible. I have bread and butter items too.

You also just made me realize that I could take a part time position with the local Community Association. It’s a little freeing when I’m thinking of only paying my bills. While I’m not sure $15/hr exists in my area for part timers (as full timers barely get this), I think it will achieve the goal of contributing to my bills and being more engaged in my new community.

And I agree with you about the Instagram situation, I’m working on my Instagram. When I tried Poshmark, I realized any effort I was considering putting into it, would be better served on Instagram.

I’m continuing to work hard. I just underestimated how certain aspects of my life would blend and take priority when working from home. Including the work it took to be organized enough to work. I had to switch rooms to provide a better space for my business and keep it out of my personal space. Reorganization takes time and I was also undoing some bad beginner mistakes from when I was part time. (I.E. INVENTORY DATA!!!). I spent a good portion of the last few weeks going though old boxes and verifying).

I have ton’s more to do before actually looking for a part time situation. If, by the time I get everything new listed, I’m not not making enough to pay my bills, then I will. I’d prefer to be able to volunteer that time.

[Jay]

Cool. Jobs arent bad, especially if you enjoy them. We still do work from time to time for other people.

But if jobs are paying less than $15/hr, I can almost guarantee that you could make that much on eBay by working the same exact hours. But you actually have to be either scavenging, photographing, or listing for that time.

Here’s the sure fire way to earn $15/hr on eBay. Go to several Goodwills every morning and but the best shoes you can for <$5 pair. Choose mainly name brands, or vintage shoes that are well made. Go home and photograph and list those shoes that day. Its totally not glamorous, but you will make money. This is how we did it for the first two years of our eBay business. We added winter coats to our scavenger trips soon after. Listed 20 items a day.

[almasty]

Yikes, a 20k loan. Agree with the advice given here.

Since you’re selling vintage dresses, maybe cross-post them to Etsy if you aren’t already doing so?

I definitely agree with getting a job, even a p/t one, before depending 100% on selling online to pay for your bills. When you work f/t or p/t, you have to treat the hours you spend outside of working as another p/t or f/t job in order to get to the point of being able to quit all outside forms of work. If you put 20-40+ hours of work a week into your main source of income, you need to put another 20-40+ hours a week into your Ebay job.

Working from home can be distracting. You just need to make sure that you are treating Ebay as a job, like you would any other job. There are always dishes that need to be washed, or laundry, or maintenance tasks on the house, or 1,000,000 reasons to not just sit and focus and work. I think when you first start working on Ebay, you need to create rules for yourself that mimic an actual job that you can follow, at least for the first few months until you get the hang of it. Then, you can take it a bit more easy.

[Zach]

A 20K debt burden would just increase your stress. I would not recommend it.

The joy of being an eBay scavenger seller is that your inventory costs should be very low. The challenge of this job is increasing your knowledge of what to sell and putting in the hours to make the necessary income. The knowledge part just takes time and experience, and there is not a lot you can do to rush it.

If you have a college degree, you might look into substitute teaching as a part-time gig. If no degree, you could still probably be a substitute para-educator. The requirements for these jobs vary by state. In either case, you can work a very flexible schedule (picking the days you want to work) and make a decent part-time income.

[Author]

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