Profit Investing

[AdventureE]

How much of your profits do you invest back into your business? Do you take a certain percentage, a certain amount?

How often do you invest back into your business verse putting the money in a personal account? Every week? Once a month? Only when you need it?

[Zach]

I pay myself each week and make sure to set aside some extra money for taxes. I use some of the profits to buy more inventory, but it’s not a large percentage because I find stuff pretty cheap. The biggest limiting factor for growing my business is time, not money.

[Inglewood]

I take out all my money from Paypal every month after the eBay fees are paid. I then keep track of what I spend – I don’t really limit myself or force myself to spend a certain amount a month – if I find something good, I’ll buy it to resell, if I don’t find anything, I don’t buy anything.

At the end of the year I reconcile things, but I know I’m ahead of the game.

[Retro Treasures WV]

I put a lot of it back into buying inventory. I have a full time job but in reality it could end at any time. I have a monumental death pile, but if that day comes I will be able to switch to full time and list like a madman – tripling the size of my store without spending one more dime. I have the dedicated space, all the tools/supplies/infrastructure to be full time. Basically I’ve invested in my own personal insurance policy.

[T-Satt]

We live on the “white meat”…

When I want to transfer money from PayPal, I calculate:

1) Current eBay fees at that time (from Seller Hub)
2) Add $100 for SixBit Subscription
3) Add $500 for Inventory Purchases

And I move over the remainder.

I always want my bills covered first, and money to buy inventory is part of that. If I have to eat less that week, so be it. Cash flow for the business comes first.

[Jay]

Yeah, this is our method too. We know our monthly living expenses and move that money over once a month. The rest is money that pays for inventory, eBay fees, shipping, county/state/federal taxes. This money is also used to fund our other business (rentals). It’s a cash machine to make other money.

I can see how its different if eBay is a “side hustle”. Then you can use profits to take a vacation, send a kid to school, buy a car, fund a retirement account.

But since eBay is our main living, it’s buying our freedom. I honestly don’t know what our hourly wage is based on the number of hours we spend on eBay. Maybe we’d make more per hour working for someone else, but I like that we own every single hour of our lives now. Its priceless.

[T-Satt]

Amen brother.

[AdventureE]

Thank you for sharing how you do your profit investing. It is really helpful to hear how other sellers go about profit investing.

[T-Satt]

No problem! It is always great to get other perspectives!

[AdventureE]

Zach, Inglewood, Retro Treasures WV, T-Satt, and Jay,

Thanks again for sharing about your profit investing. A follow-up question. I was wondering when you consider it a good decision to take from your personal monies for business expenses (especially building inventory and/or your supply base) because your business monies have already been spent for the week or month.

[Jay]

I wouldnt miss a mortgage payment, but we always pass up luxuries to invest more money in our business.

[T-Satt]

I agree with Jay.

One caveat. If you want to spend money for more inventory, make sure you already have everything else listed first. Also, if you are spending personal money for more inventory, be extra sure that the item will sell for a good return, or at least with a quick ROI.

No hoarding… 🙂

[Retro Treasures WV]

All my inventory money comes out of my business paypal account. If something really interesting comes along that requires more money, I have a separate “play money” cash fund I dip into and then repay myself. Anything bought with play money must be listed top priority first so I can pay myself back.

Last time I had to use that account for inventory was when I bought a very large lot of Nike shoes – paid $450 for the lot. I’ve made my money back already and still have plenty of those shoes listed waiting to sell.

[Author]

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