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Hi guys I think I know the answer to my question by doing the math but I wanted to run it past folks who perhaps have been in my shoes.
I finally opened an eBay BASIC store in early March and went from occasional sporadic eBay seller over over a decade to a deliberate effort to transition to HEAVY part-time and potentially full time. I managed to utilize the 250 free store listings and also some promo listing offers to maintain right at 500 listing for the majority of the latter part of March. I am ending the month with 82 items sold and just a tad over $5000 in gross sales. My goal is to reach 2000 listings in the next 60 days and potentially topping out at a goal of 5000 active listings. I sell collectible items, a diverse mixture. My gross sales goals are $15-$20000 a month by the Fall of 2017. I have the inventory to reach my initial goal and access to maintaining a 5000 item store month in month out. I typically spend between $1000 and $1500 a month on inventory and expenses alone not counting eBay fees.
Long story short, is the only way to truly work my plan and make my plan work, is to upgrade to a Premium eBay store. The math seems to work. Your thoughts, ideas, feedback and suggestions. (First time caller long time listener)
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Certainly the math is there, but also watch traffic reports (assuming you categorize properly). You may be able to take advantage of your strengths and boost revenue by having multiple stores. Especially when you start surpassing the ceiling of the premium store with higher listing fees.
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My gross sales goals are $15-$20000 a month by the Fall of 2017.
If I understand correctly, you’re extrapolating up to $20k in gross sales when you have 5k items, based on your current sales. This math didn’t work in our case.
When we started, we were making $2k a month on just 500 items. But now that we have over 5000 items in our inventory, we certainly are not making 10x the profit. Not even close.
We’ve debated why sales do not exponentially grow as your inventory grow. Some people say eBay puts a limit on your sales so other people get a chance to sell (crazy talk). Other people say there just becomes a point of saturation if you have multiples of the same kind of thing. Other people say this is just the nature of any business as you expand.
Bottom line: looks like you’re building an awesome business. Your income will certainly grow as you list more, but be careful about blue sky thinking. For us, having the large inventory allows us to stop listing for weeks at a time and still have consistent sales. People with small inventories have to always, always, always be listing to make their monthly income.
By the way, if you made $15k-$20k a month on eBay, what would you do with that money? That’s a lot of extra income.
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Jay thanks for your input. I am thinking late Fall of 2017 to achieved gross sales of $15-20k a month. My costs of goods and expenses actually will be higher by then as well so I am hoping for a net profit after cost of goods (inventory), supplies, mail miscues (those times where you try the “free shipping” aspect and the final price fails to cover, as well as eBay and PayPal’s take that I will end up in the $6000-$8000 a month realized income. That would allow me to go full time and maintain a 5,000 item inventory premium store as an individual seller. I may be shooting a little high but these are simply my goals. If I fall more toward the $10000-$12000 range and the $3000-$4000 income I will just have to continue to refine the system and raise my completed sales avg per item from the $60 range. After I began the basic store on March 8th and took my listings from the 125 or so items to 480-525, the views, watches, and sales increased rapidly. Perhaps by adding 1500 to as many as 4500 consistent listing to my store inventory over the next 6 months the numbers will not quadruple but if I experience anything like the growth I did going from 125ish to low 500’s I will be very very pleased. I will let you know how things go.
Another thing about my business model is that I mainly source from local auctions and heavily online to leverage my time. Interestingly enough I currently have set a 3 day handling time on my shipping and I have had zero complaints since I did that. Often I am able to ship ahead of that cushion and the customer responds very favorably. While many a breaking their necks to be “Top rated” and ship same or next day I disclose that I typically ship every three days in my listings. Hasn’t been a problem over the last 90 days of actual ramp up and lowers my stress immensely.
PS …I believe I have listened to everyone of your podcasts over the years and they have been a great source of motivation and plain speaking vs the hype that surrounds the community sometimes.
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Sounds like a plan. As long as you keep an eye on your costs vs profits, you’ll be fine.
Our sales definitely seem to skyrocket in the early days of building our store. But again, the sales did even out when we hit about 2000 items.
We actually started a second eBay store to spread out our inventory. So we now have a second store with about 1300 items which makes us about $2k a month.
Our main store (5500 items) has been doing great the last several months, but the slower summer months are coming where we cannot expect to make as much as we are now. Tat’s the other important note: sales are not always consistent from month to month and there’s nothing we can do about it. That’s just the retail cycle.
So we always make sure our expenses can be covered by our weakest sales months.
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Ugh Summer…you are correct wise one!
I will say one of the greatest things I learned from Scavenger Life is that what appears to be very banal items are wonderful bread and butter sales of $20-$40 that really delight when you wake up and see multiple ones of that type sell through. I made the mistake years ago of always hunting for the home run items and that is not a great business model. Often times I have found that I discover new niches by simply throwing items up for sale that I would have never considered in the past. I am currently working a new niche that is a solid 2-3-4 times the money with an occasional home run. It is a highly competitive niche but each item while when they were new had an exact MSRP, in the used / vintage market they range from $40-$300 completed depending on the overall condition. These are items that have a large following and can be sourced from as little as under $10 to as much as $100. I have bought the item in ranges as such and have experienced that type of return commensurate with their condition as perceived by the end user / collector. To answer an earlier question you posed as to what would I do with the money once I achieve those lofty goals, …… TRAVEL and source on the road as I have seen you and Ryanne do. I can’t think of a more enjoyable way to combine two of my favorite things.
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MEF: You definitely have the mindset and the thoughts about the numbers to make this work. To your original point of whether to upgrade, I would see what you pay in your basic subscription fee plus your individual listing fees (the ones above your store limit), and when you are paying more each month than what you would with the next level up, time to level up. If you aren’t already crossing that line, you will be soon.
We have the Premium store now, and on the yearly subscription we pay $60/Mo. With the extra listing fees above 1,000 we are around $90-$130 per month total. The anchor store is $300/mo at the base, so we can’t justify it. We just keep looking at that number until we need to hit it.
As for the full time and forecasting, I would look to a spreadsheet solution where you forecast each month:
your beginning listing inventory
plus new listings
less sales
calc ending listing inventory (which carries to the next month)
sell thru rate (percentage of beginning inventory that sells)
average sales priceThat should forecast your revenue per month. Through on your expenses (using your listing activity above times an average purchase price per month for inventory costs), and you can see how things will look. Update each month with your actuals and you can refine your business and your forecasts.
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MEF: One other item that will help your sell thru rate…always list. I have tracked our numbers each month, and with only a couple exceptions, when we generate more listings than in the previous month, our sell through rate increases. When we list less items than in the previous month, our sell through rate decreases. The only exceptions we have are in November (always an increase with the holidays) and January (always a decrease with the holiday hangover).
Though we are full time, we have been somewhat sporadic due to my contract work, which sometimes is 0 days a week, sometimes 2/wk, sometimes the whole week, and our listing numbers show that variability. But without fail, the one thing you can control is how much you list. And our numbers always show that the more we list, the more we sell.
To get to your level, it will take a LOT of listing, but it can be done. I’m forecasting to be consistently over the $10k/mo revenue line starting in Sept of this year for the first time, but our average selling price is around $21-$22 per item (before shipping cost), so we need bigger volume or bigger pop per item to get bigger in 2018.
Keep cranking and let us know how you are doing. Hope you get there! We love to see goals and hard work produce success!
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