Greetings from Utah

[Utahbill]

I’m Bill and I live in Salt Lake City, Utah. I have a full time job and I have been selling part time on eBay since 1997. Right now I have two eBay stores. One store focuses on used items and collectibles; the other sells licensed major league sports items that I source from wholesalers (including iPhone cases):). I no longer buy new inventory for the sports store and I am selling off what I have. I am focusing on increasing the number of listings in my other store with the current goal being 500 items. That’s where the magic starts, right? I will be retiring in two years and will do eBay full time then.
I have listened to the podcast since the beginning and love it. I am a forum lurker who posts occasionally. I am going to become more active in this forum and hope to make a contribution.

[Jay]

Hey Bill. Seen you around. Glad to meet you.
Is the wholesale stuff not profitable?

[Utahbill]

Wholesale items can certainly be profitable, and lots of people make a good living with that business model. However, it didn’t work for me. I had no problem sourcing items and picking items that sold well. I was selling almost $10,000 a month, but I was going deeper into credit card debt each month. Not good! I didn’t really get a handle on this until I implemented Outright bookkeeping software in a serious way. It gave me a clear picture of what was happening.

Here’s why it didn’t work for me:

High cost of inventory to keep the shelves stocked. If you want, to sell a lot you need a lot of sku’s and quantities of them in stock. This keeps a lot of cash tied up.

I’m a one man show with a full time job and didn’t have the time to handle all that’s required. Buying stock, counting and shelving it when delivered, working with companies on missing, damaged, or incorrect orders, listing it all on eBay, shipping sold items each day, dealing with customer services problems and returns, adapting to eBay changes and requirements etc. etc., and CONTINUALLY monitoring the competition was more than I could, or maybe was willing to do.

Competition on eBay is fierce and the margins are razor thin; you have to do volume to make money. To compete, you have to be at or very near the lowest price. Remember if you can get the inventory so can others and they will. As volume increases all the issues I have mentioned become even more challenging.

I burnt out. It wasn’t fun anymore.

Having said all that, it’s by no means impossible to solve these issues and be successful at this business model.

However, the end game is being “king” of a warehouse and having a bunch of employees. In my mind, this is building your own prison. I evaluated where I wanted to be in the next four or five years and being King isn’t it. Empire building is not for me.

So, now I am getting back to my roots and doing what I love, treasure hunting. There’s nothing like scoring at yard sales, thrift stores, and estate sales etc. It’s all about the hunt right? I have made a profit each month since I stopped buying wholesale inventory. Now, I just need to get my inventory up so that it will provide the extra income I need to supplement my pension. This will allow me to retire in two years and truly be free.

[Jay]

Agreed. I can imagine that running a successful wholesale business is all about staying on top of where your item is in search. It’s definitely not “list it and forget it”!

When you talk about razor thin margins, can you offer an example of how thin the margins are?

[Utahbill]

Here’s an example of a somewhat typical margin, but of course it varies from item to item.

NFL Banner sells for $22.98

Cost including freight $15.74
eBay and Paypal fees $2.60
Packaging $0.11
Postage $2.60 (free shipping)

Leaves a profit of $1.93, but if you sell a thousand of them it adds up.

[Jay]

Yeah, that business model sounds like multi-level marketing. You’ll make tons of money if you sell a whole lot of stuff. And you need to keep charging to your credit card to keep the pipeline open.

I think you’ll much more enjoy the treasure hunting way of scavenging. More profit.

[skydog]

Hi Bill. I am semi-retired (ebay is my”hobby job”) and have a store of about 500 items. I could most likely handle more, but prefer to work only about 2-3 hours a day (not including shopping!). I feel this is the ideal PT job since you can go on vacation mode and shut it down when you want.

Your 2 year plan sounds like a sound one. Carry on!!

[Utahbill]

Thanks for the encouragement. I like to travel and go on vacations. So, the fact that I can turn eBay on and off whenever I like is key. Like Jay and Ryanne, I am a fan of extended handling time. Making money while on vacation is great.

Good sales and good hunting to you.

[Author]

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