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Tagged: ROI ROT inventory expense
- This topic has 19 replies, 4 voices, and was last updated 3 years, 1 month ago by
ebaymom.
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07/12/2018 at 10:59 pm #45274
Anonymous
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Almasty posted here https://www.scavengerlife.com/forums/topic/he-not-busy-being-born/#post-45264 about rules of thumb for costs of scavenged items versus expected returns. Here’s my take (for anyone who cares):
My rule of thumb for sourcing bought inventory–my guiding, limiting criterion, based on what I’ve learned from the masters is:
Buy stuff I expect will sell for no less than $10, at a price that will average around 1000% return (minimum) before expenses.
But at the low end, I have a much higher minimum ROI % expectation, which falls off as purchase price increases.
Above $25 it’s really academic, because I almost never spend that much for a single item.
I don’t stand around in thrift stores calculating ROI, but here’s a simple spreadsheet that captures my gut “calculation” and the resulting chart:
And hey, I discovered Imgur supports pdf files! Neat.
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07/13/2018 at 7:16 am #45293
Yeah, a lot of the paper inventory I have already purchased (which is quite a bit, in the thousands) has quite a good ROI – purchase for $.10, if even that high, sell for $10-30+. I will continue to list those items that I already have, but since I have so many now to sort through (and I am tossing or re-lotting about 1/3rd-1/2 as it is now), I am not actively purchasing ephemera at the moment. I will once again when I have my unlisted inventory under control.
I’m thinking more in terms of books for Ebay to change my criteria permanently on – it is incredibly easy to purchase a book for $1, sell for $10-15. However, I have the unlisted inventory problem to contend with, as well as major burn out. If I churn through what I have at that price range (as well as continue to toss anything that does not meet my criteria), I will eventually erode my unlisted inventory completely and have nothing bugging me to get done other than what I go out that day to find to sell.
By then (1 or 2 years in the future), I will have already started to build up a steady supply of $25+ items that I will have also been listing during the entire time I was also listing through the unlisted items. If I train myself now to stick to these purchasing patterns in the future, I will not go back to picking the as good ROI, but realistically just low-hanging fruit. Luckily, the $10-15 is the sweet spot for the casual book buyer, so I will sell a lot of it down and won’t have to worry about it taking up too much space for too long.
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07/13/2018 at 7:28 am #45295
Anonymous
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Almasty, do you sell “popular” book titles? I shy away from books, really, because, well, they’re so plentiful, I guess. Any time I’m faced with a huge amount of something, I lose perspective on the value (in a whole forrest, how much is one lousy tree worth?). I do pick up specialty, rare, out of print stuff, same as J talks about, though.
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07/13/2018 at 8:33 am #45301
I have an entirely separate Amazon business that is my real “ft” job. That’s where all the “popular” stuff goes. I don’t like discussing Amazon ‘cos that’s how I really make a living, and at this point in history it is TOUGH with an insane amount of competition, and almost impossible if you don’t do FBA, like me (yay).
Ebay was meant to duplicate the Amazon business, which it does on some weeks. Otherwise, it is pretty much my other ft experiment business, even at the stage of having 9,000+ items currently listed. It is the weird store with 35% or more unique one-offs that can sell within an hour of listing, or 10 years.
Yeah, books and ephemera are really all I can deal with on a daily basis. They are their own beast. Clothes, the same. I have several bags of clothes to list on my tiny “everything else” store, and I just can’t. There’s only so much time in a day.
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07/13/2018 at 8:46 am #45304
Anonymous
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9000+ items? That’s like experimenting with carpentry by building yourself a house! š
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07/13/2018 at 9:11 am #45311
Haha, yeah. After dealing with it for so long, I have come to a complete understanding of the importance of the very long-tail vs. methods to bring about faster sales. What to stock, what not to stock.
It is pretty much now the autopilot experiment store, not the actively trying new things store. I have been doing this way too long even on Ebay for any of it to be a surprise anymore.
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07/13/2018 at 9:15 am #45313
Anonymous
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Doesn’t sound like you’re enjoying the experiment, tho.
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07/13/2018 at 9:23 am #45317
Just doing this forever burnout. Like the midlife crisis of reselling.
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07/13/2018 at 9:38 am #45322
“midlife crisis of reselling”
I like that! It can feel like that sometimes!
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07/13/2018 at 10:03 am #45325
I feel like 99% of the energy going into the discourse on reselling is about how to get started, bolos, troubleshooting, fake tax avoidance conferences for resellers to hang out with their friends or youtube mentors & gurus, not anything about the actual substance or consistancy of reselling for the long-term, or how it fundamentally alters your life as a person, and even attempts at conversation about it lead straight back to the expected 99% of discussion.
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07/13/2018 at 10:07 am #45326
Yep. Going full time is a commitment, just like anything else.
Sizzle sounds great, but Steak is what we live on…
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07/13/2018 at 10:28 am #45327
Anonymous
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So as a veteran to a newcomer, what’re the substantive issues that occupy your prime brain real estate?
Taxes?
ROI?
STR?
ASP?
Free returns?I’ve been blathering on with mathematical analysis this week, which for me as a beginner (and a recovering engineer), is helpful to quantify the business, but I do detect a fair amount of “that and $5 will get you a cup of coffee” from the veterans.
So is there something meaningful, above the nuts-and-bolts of the machinery of eBay, that can be said, or is it all just noise?
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07/13/2018 at 11:04 am #45330
Here is my perspective:
First and foremost, 99% of your thoughts need to be positive and optimistic.
After that, 90% of your time should be thinking about:
1) Buying good items at a good price
2) Efficient processes for listing, photoing, storing, and shippingNow, that first item is pretty loaded. What is a good item? What is a good purchase price? This is where your ROI, STR, and ASP come in. To Jay’s point, 99% of items will sell. The question is when and at what price?
So everyone is really running the entire spectrum of store types on eBay. I think the two ends are High Long Tail and Churn and Burn.
Jay and Ryanne are High Long Tail: Sell for 10x return at a 4% monthly STR at a solid ASP (I say about $35+ ASP).
Churn and Burn will sell for a slightly lower ROI (7x-10x) at a 30% monthly STR but at a $12-$18 ASP. These are usually a lot of low end clothing sellers that buy at sub-$1, Sell at $10, and churn out volume.
I think the rest of us are somewhere in the middle. Our store is more 5X return for 15% STR for $25 ASP. So we try to get the most we can for our items, but at a price that will still keep the cash flowing in on a solid STR. We have long tail items that we hope to get high dollar for as well as lower items that we can move quick.
I know of 1 seller that is at a much higher ASP ($50+), around a 15% STR, with a 2x-3x return. I know of another that is $80+ ASP, with a 2X-4X ROI, at a 15%-30% STR.
So what you buy and how much you pay will be determined on your business you want. You can spend $10 to make $100, but it may take 2-5 years for the return. Are you willing to wait? You can spend $1 to make $10 in 3 months or less, but is that enough return for the work of listing, photoing, and shipping? Or is it somewhere in the middle. And…do you like selling the things that you sell?
My perspectives on the numbers (ROI, STR, ASP) are that they only show what type of business that you run, and that by seeing what your numbers are, you can see what your work will return to you in profit if you continue to run the business in the same fashion. Whether you want to continue with that path is entirely up to you. Or if you are not happy with that return, you can change your process, or buy different items, or sell differently, etc.
I would say after all of that, most business decisions that I run through are predicated on how much capital do I have to spend, how much time I have to list, and how much storage I have available…
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07/13/2018 at 11:11 am #45332
Yeah, you definitely have to love what you do, and come about it from a perspective of abundance vs. one of scarcity. That is definitely the key. You also have to work very hard for an indeterminate amount of time to get yourself settled – go out, buy stuff, list it, sell it, package it well, ship it quickly. Over and over and over ago. On your own.
I think the ones more likely to fail at this business are the type that are overly anxious, not capable of working for themselves, and unable to be repetitive in the right way to do this (at least at first). Of course, what you do first with online selling will not be necessarily what you end up doing a year later. Still, you need something to work from at the beginning to get you over your initial ?
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07/13/2018 at 11:30 am #45335
Anonymous
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Nice, T-Satt. I think you just wrote the cliff’s notes for SL the book.
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07/13/2018 at 11:31 am #45336
LOL!
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07/13/2018 at 11:06 am #45331
Other than internalizing the higher ASP I want to move forward with, and just working hard on listing my backlog of inventory, none of those numbers are actually concerning at this point.
Taxes – I manually set aside the expected taxes each month I expect to pay at the end of the year (with fees for not paying quarterly), not a big deal at all.
ROI – Only in terms of my current goals for higher ASP, which I have already internalized and will do when I am out sourcing
STR – Don’t care.
ASP – Already internalized, but will still have a lower asp as I list through all the unlisted stock that I already own that may be lower than I would like to get and hold onto in the future.
Free Returns – I don’t offer free returns, so it doesn’t bother me at all.There are quite a bit of unspoken concerns that can be said for doing this in the long-haul. I have thought about creating a podcast to do so, but I have realized my target audience would probably be less than 10 people, if even, so there’s no point. I have also thought about writing out articles, but less people would care to read them than to listen in a podcast format that’s not “how do I get started?” sort of tawk.
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07/13/2018 at 11:29 am #45334
Anonymous
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I don’t know, Almasty, I’ll bet you’d be surprised at the size of the audience for “post-grad” eBay discussion.
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07/13/2018 at 11:38 am #45338
Almasty and Luftmentsh: Post-Grad EBay? That is this forum! š
Jay and Ryanne always said they were the Advanced side of EBay. Beginners are welcome, but their purpose here was aimed more at the more advanced side of EBay.
PS-I would read! Iām old school!
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07/13/2018 at 12:27 pm #45342
Almasty, I think you should start a thread or category… “Full Time Sellers Lounge” or something to that effect on here where you can dialogue freely about the concerns you have with your business without getting dragged into “analysis paralysis”. I enjoy reading people’s experiences and thoughts who have successfully done this full time and long term, like Jay and Ryanne. It is very inspiring and you have much to offer.. and of course, burn out is very real for anyone in the business as long as you have been. It is hard for me to hit my goal of listing 5 items a day, let alone mega-listing everyday of the week to maintain 9000+ items – that is amazing to me! Ebay is hard work – and can be so frustrating, and so much fun at the same time. I do feel like I am working eBay full time for only part time pay – (even though I am ‘small potatoes’ right now) I think about it all day everyday and it permeates all aspects of my life always – so I can only imagine what is going on in your world on a daily basis!
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