12/09/2017 at 7:50 am #28430MikeParticipant
I was feeling a little down with where my eBay business was going. I have had a store for 11 months and doing well but not what I hoped. I started doubting myself and wondering what I was doing wrong.
I decided to compare my numbers to Jay and Ryanne’s (The Gold Standard) to see how bad I was really doing. This isn’t a smart thing to do but here goes.
I took the last week numbers from the blog
Weekly Sales: $1,846.88
Monthly Sales: $7,387.52 (weekly * 4)
Number of items: 5,878
Weekly Sales: $551.07
Monthly Sales $2,204.27 (weekly *4)
Number of items 1,675
Heres where Math kicks in. Hold on to your hat!! Jay /Ryanne have 3.51 more items than I do. If I multiple my numbers by 3.51 I get
Weekly Sales: $1,933.84
Monthly Sales: $7,735.34
Number of items: 5,878
What??!! But I suck! Granted this is a very high level calculation. I am in no way comparing myself to them. But… I am not doing too bad.
Please don’t burst my balloon. I know there are other factors and this only took me 2 minutes. Yet it was all the motivation that I needed. My attitude has changed 180 degrees.
Time to keep listing
12/09/2017 at 8:56 am #28434
This is good math. You’re doing good!
I would look at the kind of items you’re selling. At 1600 items in your inventory, you obviously know how to build a strong business. But it looks to me that maybe you need a more diverse inventory, especially loaded with higher dollar items. I havent seen your store, so cant be sure.
I just know that there are scavengers here with stores your size that often make as uch as we do because they are selling fast moving items, or items that sell for big money.
The biggest downfall I see in sellers in your category is continuing to focus on junky, low dollar items.
12/09/2017 at 4:53 pm #28458rescuedrelicsParticipant
Hmm…never thought to do that kind of math. Puts things in a new perspective. I’ll start thinking that way next time I’m down on my numbers. I also try to remember that someone making less money than myself or have less items, wish they were in my shoes. Or that at one time I was wishing I was making as much money as I’m now. Like in the beginning making $50 a month to me was amazing. It’s hard sometimes to remember where you came from.
12/09/2017 at 5:04 pm #28470
I remember when making $100/day seemed a fantasy. It’s definitely good to be grateful. The big key for us is making sure our expenses don’t proportionately rise with our income.
12/10/2017 at 11:21 am #28495
Agree with all points. I would also say to compare YOU to YOU. What were your numbers after 3 months? 6 Months? When climbing the mountain, it is helpful to look back at where you started…
That is a great extrapolation to compare your numbers to J&R. Comparing stores is never easy. We all have different styles, items, methods, etc. The most important thing is how you evolve your business, where you are going, and what you can accomplish.
You got me curious though…I’m a math nerd…
We were at 1700 items in our store last week. Doing the same math, J&R were 3.46 our size…meaning our extrapolation of monthly income would be $33,345.55 for the month.
Gotta make that happen!!!
Hey, Craigslist Hunter does that level of income, so it is always possible!
12/10/2017 at 11:33 am #28496
Just curious. How transparent is Craigslist Hunter with his revenue.
–Is he making that much gross profit?
–I know he has a lot of overhead (employees, storefront, etc). Do you know how much he actually makes after expenses?
That’s our challenge when think of scaling up.Its all about taking on more expenses and moving pieces that eat into our time.
12/10/2017 at 3:00 pm #28523
Ok, I’ll try for a fourth time to post this…
No, I don’t know the Gross or Net Profit on his eBay business, but he did just recently show his eBay Revenue numbers, and for the past 60 Days, his Revenue was $103k. Assuming a 20% Net Margin, that is $10k per month. Going down to 10% margin (where I was in the Manufacturing Industry), that is $5k per month.
And since this is a sideline to his other outlets (CraigsList, Retail), that is a nice income stream…
12/10/2017 at 3:07 pm #28524
Understood. He’s a great guy. I’m glad he’s successful.
It’s my dream for a guy like that to post his expenses.
Paying people is expensive!
12/10/2017 at 3:54 pm #28536
True, but if you are getting value from their work, it is a net positive to the bottom line.
I think you said at one time that you can get 6 listings per hour from your assistant, and you paid $15 per hour? That should be a net positive for you, if it is adding to your current listing work.
We are going to be hiring a photographer very soon, and I’m doing that dynamic forecasting now. If X cost per hour yields Y extra listings per week, what is the target range for cost and for their output to keep things profitable and yield an increase in the bottom line.
PS – How did you do your payroll calcs for your assistant? Yourself or your accountant? If yourself, did you use a payroll service or did you calc using a spreadsheet?
12/10/2017 at 4:39 pm #28538UtahbillParticipant
One cool advantage he has is people bringing him inventory throught the front door. This is the only advantage I can see to a brick and mortar store.
I would not want to be chained to a bm store. Even if you have empolyees, when someone doesn’t show up, guess who gets to run it?
12/10/2017 at 4:43 pm #28539
Agreed. But I think we can all agree that finding inventory isnt the issue. It’s the processing and listing. That’s the bottleneck.
Ultimately he seems to have found the right equation. he has fun and makes a bunch of money. Thats awesome!
12/10/2017 at 4:55 pm #28540
Though Veronica and I are somewhat tied to our store as well. When we are gone, who will do the shipping? We can do what we have in the past, extend handling time.
But if we have an employee that can ship for us? Store keeps churning and we are on vacation…
12/14/2017 at 8:14 am #28767simplicioParticipant
Craigslist Hunter is interesting to watch because he’s consistently willing to pay way more for inventory than I am. If I can sell something for $100, the most I’ll pay is $20. He seems to be OK going up to like $50. Maybe he makes it up in volume but IDK…
Cool to see your numbers! I would say there are two other critical pieces of information: (1) net profit/costs, (2) time invested.
12/14/2017 at 10:18 am #28776InglewoodParticipant
I personally like to calculate how much time I put in, and how much profit I am making to give me an hourly rate for my work.
Because I work a full-time job, I’m only doing things part time but my numbers this year are $303.21 profit per week, with an average of 12.25 hours per week put into eBay activities (sourcing, listing, shipping, etc). That gives me a hourly pay of $24.75.
I think the hourly rate is a good number for someone to go by – that way you can figure out if you scale your business, and are looking for a certain income level, how much time you need to put into doing the work.
For me it was also a good exercise to see how I was doing vs. what I am getting paid working for someone else – with a pension, medical insurance, paid vacation days, and consistent income, for me it isn’t worth going full time on eBay yet. However, I have figured that if I retire early at a reduced pension, it would make sense.
It also gives me a good number to see how I am doing month to month as the inventory mix changes, and seasonally – for example, my sales are slower now during the weeks leading up to the holidays, therefore my effort is not worth as much as compared to other weeks/months where my sales are higher.
It’s just another metric – I see numerous ones on this site, but it is my favorite one to let me know how I am doing with the time/effort I have to put in.
12/14/2017 at 5:43 pm #28804
I agree on the profit per hour calc. I never do that on a weekly basis, because the time I spent that week is not related to the sales that week. A few items may sell in the current week, but it is definitely the vast minority. Putting on my Accounting Geek hat, technically all the hours you put into your listed inventory should be part of the value of your items until they sell. That is the Fully Absorbed cost of your inventory: The cost of the materials as well as the cost of the labor to make them available to sale (and getting really technical, adding an OH cost as well). No one does that in this line of work, and not even an Accounting Geek and Spreadsheet nerd like me really feels like calculating that each month.
I have done studies of our processes in the past to get an accurate measure of how many items I can get done in 1 hour beginning to end (shopped to shipped). And in my forecasting tool, I forecast on the lowest level possible (I like to win on the upside). I know that on the low end, from shopping to shipped, I can do 3 items per hour.
I also know that in my profit per item numbers, the lowest ever average that I have had is $10 per item, we are well above that now, but I still like to forecast using $10 per hour. It helps factor in unknown issues and it is a nice round number.
Using that, I know that at the lowest, I’m making $30/hour all-in. Realistically, I think the number is closer to $40-45.
The interesting part is now that we are forecasting for a new employee, we are carving back into the numbers to get an accurate picture of the profit per hour we can expect based on their productivity, given (low) assumptions on their initial output. And we grow from there and make them more efficient, and tweak the process. And we see how to focus our hours on the highest value tasks.
12/14/2017 at 6:11 pm #28810
When you think of hiring a worker, what is your math?
For the person we would want to hire full time, we’d have to pay her $35k a year. W-2 employe on the books. This is the only way she’d work, but she’d be worth it. Not just a mindless lister, but someone who we could trust to ship and run our business for a month at a time while we travel. But $35k is a huge amount of money at our level.
–How much do you think hiring a full-time worker would be?
–How much increase in your yearly gross profit would you expect?
–Or do you assume the worker just cuts down on your time spent on the business, so less money but more time?
- This reply was modified 3 years, 11 months ago by Jay.
12/14/2017 at 11:02 pm #28825
Ok, a ton of math would go into all of that, but let me run through some of my numbers.
We are looking at a part time person to start, doing photography and some basic listing info (measurements, condition, etc.). I have a Listing Sheet that I created a year or so ago that we have used in the past, when I would do photos and fill out a listing sheet with pertinent data, and then Veronica or I would do the listing later.
For 16 hours of work per week, at $12/hr, doing 6 listings per hour (very doable) that would add 12 hours of work to Veronica and I per week (doing the listings, pricing and submitting). That would increase our profit by $19k for the first year (from a base of no employee).
If we swap the hours (meaning that we do the same amount of work per week, but we replace doing listings all the way through with some work of just doing listings from the sheets they provide), our profit increases by $9k for the year from the baseline.
If we hire a second person @ $12/hr to just list, and that is an addition to our normal listing work, our profit increases by $8k for the year from the baseline. This could also work if the same person does the 16 hours of photography and then adds 12 hours of listing (one solid person for 28 hours per week)
So all in all, at a reasonable efficiency rate, we are net profitable in all scenarios.
Full time is a different ballgame. Now you are increasing your cost, and requiring a substantial amount of additional sourcing work (to keep them busy) and shipping work (assuming an increase in sales volume), but at $35k per year, you will need a serious level of output to make it worth it.
As a What-If, a full time person at $16/hr for 40 hrs per week (48 weeks, my model is still basic at this level), doing 4 listings per hour of work (better than my 3 since they don’t source, but only 4 as some of their work is prep and ship), costs $35k per year and is an increase in profit of $13k over the baseline.
So it will come down to what you want. Increase in profit…or freedom of time? I can keep it profitable, but you will have to measure to make sure that it works. Plus you have to factor that to make it profitable, you are increasing your volume, which increases your shipping time. Veronica and I have our shipments at an average of 5 minutes per item. I do shirts/pants/jeans in 1-2 minutes, but Veronica’s hard goods take a lot longer. If you are doing mostly hard goods, you need to figure out how much of that extra cost is going to shipping, but that task does not increase your listings per week (and hence your revenue).
This is why I use my spreadsheet do do dynamic modeling. The extra labor piece that I have bolted on still needs work, but based on my Kentucky Windage, it is pretty solid so far.
12/15/2017 at 7:28 am #28838
I like this conversation because it is a big step hiring full-time or even part time.
–Is 19k/yr the net profit increase after you pay the helper? So $1.5k/month?
–Is the $12/hr helper a contractor or W-2 employee? If W-2, then add another $2/hr for taxes (our experience).
–Who do you imagine will work only 16 hours a week at $12? That’s $192/wk gross pay. After taxes, they’re take home pay is approx $150/wk. Maybe students, retirees, or stay-at-home moms? I only ask because we struggled with finding someone we could train and keep on for a long period of time to avoid the churn of retraining temporary workers. Our current helper (who we love) got a full time job because she needed more money and reliability. We’d have to pay $35k to match what she gets paid now.
–We wouldn’t be worried about more shipping because we’d teach the helper how to ship. That’d be part of the full-time hours. I’d be fine at breaking even if we were able take a step back on a lot of the day to day details. I know you’ve spoken of being able to go away from a month while someone else ships (and I assume lists). But the challenge/responsibility of taking on a full time worker is a big one for us. Not someone we could turn on/off like a contractor or temp employee.
12/15/2017 at 7:41 am #28841
Yes, the $19k per year is after the pay for the person. My forecast is dynamic, so if I add hours to the helper, the cost increases for the year for their labor, as well as increasing the number of new listings for the month. By increasing the listings, the cash requirements for purchasing more listings increases as well.
Yes, $12/hr is an employee. I added a 15% payroll tax to the base rate to cover the employers portion of FICA/Medicare and to cover FUTA/SUTA.
Right now, the person we are looking for is only a photographer. Yes, we are expecting this to be extra income for someone like you suggest. In fact, a student would be perfect, as we can work around their schedule, and they can work around ours. We aren’t looking for someone to do this full time, as we need to grow into the position first. If we find that perfect person and we need to grow to keep them, we can deal with that.
12/15/2017 at 8:04 am #28842
Understood. So you’re thinking $10.50/hr to employee, plus $1.50/hr for taxes ($12/hr total wage expenses).
When do you think you’ll pull the trigger and try to find a helper?
12/15/2017 at 8:08 am #28843
No, $12/hr to the employee, $1.80 for taxes. I have my calculation based on their base rate ($12/hr), but I gross up my labor expense by an additional 15% to cover payroll taxes. So if I flex up for a $16/hr employee, my payroll taxes increase as well.
Looking to have someone by end of January at the latest.
12/15/2017 at 10:45 am #28857Retro Treasures WVParticipant
So basically I compare everything involving my time in life to selling shoes now.
Example: Change oil in car? Do you know how many pairs of shoes I could list in that time frame? Not worth my time!
Anyways, here is a basic breakdown of my hourly profit for shoes based on my method.
Assuming I follow a shopping trip for 10 pair of run of the mill shoes at my average selling price.
Shopping time: 30 minutes.
– Really it’s less than that – 10-15 minutes for the shoe section – but its a nice round number that includes travel time. Travel time is usually tied to another errand so I typically don’t count it.
Listing time: 50 minutes (5 minutes per pair)
-I can really crank the shoes out. I can usually do 7-8 pair draft listings (everything but photos) in 15-20 minutes. I save time by using “sell similar” during my research for a sold listing that way the basic title and item specifics are already populated. I just edit as needed to match my pair. Photos is 2 minutes a pair. I have a very specific order I take photos of shoes so I can do it very quickly. In all I have about 5 minutes total a pair in listing.
Pulling from inventory: 10 minutes.
– I have an inventory system and my shed is right outside my house. I use the classic version of the ebay site on my phone in the browser so I can see my custom SKU’s and pull all the items to ship quickly. I throw them all in a bin and bring it back inside to my shipping station. I have 3 day handling on all my items so I only ship 2-3 times a week. I don’t like making one-off trips to the shed. I also don’t sell enough volume to justify daily shipping.
Shipping time: 30 minutes ( 3 minutes a pair)
This is where the rubber meets the road. Shipping is super easy. They either go in a padded flat rate mailer or a USPS tyvek mailer. I’ll ship expensive or really nice shoes in a USPS shoebox. I use a DYMO 450 label printer that really speeds up the labeling part. I pack, then weigh (if needed), then print label, seal up package while label is printing, then slap on label. 3 minutes per pair is easy and actually on the high end. I can do 2 minutes an item if I’m really rolling and everything goes smoothly. I can crank out 20 shipments in less than an hour easy if it’s all clothes and shoes.
So an hour and a half total time for 10 pair of shoes. My average selling price is in the $35 range for shoes and my average COGS is $5. After fees, average profit is $25. We’ll go ahead and bump that down to $20 for this example to be conservative.
So total profit on 10 pair is $200. Divide that by 1.5 hours.
Profit per hour: $133.33
And this is why I think of everything in terms of shoes!
Currently I’m really into jeans and men’s shirts. My average profit is much lower, but my COGS are a fraction (most stuff is $1 each rather than $5+), and the space they take up is much less. I can fit 25 clothing items in a bin compared with 10-15 for shoes. Without going through the numbers I’d guesstimate my profit per hour on clothes is more like $50/hour. It does sting knowing that my time to list is longer on clothes (measurements) and my profit is lower, but I’m working on diversifying my inventory for a more steady income stream.
12/15/2017 at 8:10 am #28844
So to be extra clear, at $12/hr for the employee, my labor expense is $13.80/hr. If the employee is $16/hr, my total labor expense is $18.40/hr.
12/15/2017 at 8:13 am #28846
Understood. That’s good pay for a student just looking for some part time work. We also know that it’s serious cost to the bottom line.
Looking forward to hearing how it goes. We havent had many people here hiring helpers and discussing it.
12/15/2017 at 8:26 am #28849
I’ll let you know how it goes.
It will be a cost, but it is increasing profit as well. That is why I have my forecast dynamic to see how productive they need to be to make it worth the cost.
Labor is not just a cost to a business, but it is a revenue generator (if done correctly). Especially at this stage. If I am not increasing my bottom line by having an employee, then it isn’t worth it.
But the flip side is true as well. If I’m not willing to invest costs into the business that will make the business more profitable…then I shouldn’t be in business (or accept the one that I am in).
As the saying goes: If you want to go fast, go alone. If you want to go far, go together.
I want to go far…
12/15/2017 at 8:35 am #28850
True. It’s really is the big question we always have:
–are we trying to make more money?
–are we trying to get more of our time back?
In a perfect world, we do both.
This is why I laugh at the “Empire Building” in reselling because it often just looks like much more work than I’d want to do. Employees can mean you sell more, but it can also mean a lot more managing, solving problems, buying inventory to feed the beast. More money then looks less appealing. The empire becomes a sweat shop.
12/15/2017 at 8:47 am #28851
It is only a sweat shop:
1) If you let it
2) If it isn’t who you are
Self awareness is key. There are a lot of people that should NOT go into business for themselves. It ain’t easy, it can be stressful, there are lots of problems. To run your own show, you might as well be a janitor: cause you are cleaning up crap all day.
I have always run my own show, even when I worked for others. I OWNED my job, and busted my butt to do it the way I wanted. When that wasn’t enough, I quit and Veronica and I took this to the next level: solopreneurs.
Now we want to level up again, and put our talents to work on the areas that we are good at (and that we love to do): Solid sourcing and how to run a business. I love running businesses, so adding people is just natural to me. We both love the hunt.
And with the leveling up, we will make sure that we are doing this in a way where we keep the parts of the job we love. I could take my side and do sourcing only (truly) if I wanted, and never touch photo/listing/shipping. I would not make a lot per item, but I would essentially be paid to shop and manage employees. Will I do that? Probably not…but I know I could (and there are pros and cons to that model).
Veronica does not want to go to that level, but she loves shopping and she loves researching. So if we get someone that can get photos and shipping done, she can stay in the parts of the business that she loves.
Big key when adding to your business…outsource what you hate and keep what you love (and are hopefully good at). Then it isn’t a grind, it is something you enjoy.
And then you ain’t working…you are living…
12/15/2017 at 8:51 am #28852
I think you just came up with a new SL slogan: “outsource what you hate”
12/15/2017 at 9:01 am #28853
I would love that. Move your life to be what you love, have others do what you hate (because they probably love what you hate).
I love numbers and handling business “stuff”. Other hate it…and that is a business.
My sister-in-law LOVES to clean…others hate it…and that is a business.
I was contacted on Instagram this week by someone offering up their skill at photo editing. He sent some samples and they were really good. Some people hate (or can’t) get their photos to that quality, but he can…and that is a business (and something I’m considering).
12/15/2017 at 9:58 am #28854InglewoodParticipant
I don’t know if you have looked into programs in your area where if you hire employable persons with various disabilities, that the government would handle most of the taxes, as well as a portion of the pay (where I am it is 50%) if you hire someone with a disability.
I’m not sure how widely available these programs are, but something to think of if you are just looking for someone to take photos, edit photos, type out listings, print labels, etc.
12/15/2017 at 10:09 am #28855
We have some areas we are looking at, I will look for that as well. Our church has a similar program that we are looking into.
Especially if we go with someone to just list, that would work out great.
Thanks for the tip!
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