10/21/2018 at 9:42 pm #50481
As mentioned a few weeks back, in the next three or four months, I’m planning to transition from part-time reselling to full-time. This thread will serve as a sort of journal as we (my wife and I) make some big lifestyle changes, and work towards buying back our time.
A bit about us:
– We’re Canadians
– We sell on both ebay.ca & ebay.com (CAD, USD)
– Ages 37 & 42. Two cats, no kids.
– Started selling on ebay casually in November of 2015. Started ramping up around July 2016.
– We both have full-time, professional, long term (8 & 13 years) jobs.
Current stats: October 21, 2018
Total Items in Store: 1,397
Total Items in Store: 518
Total listings: 1,915
– Currently pushing to hit at least 1,950 listings before the end of October.
– Working on slowly expanding our offerings on amazon.ca & amazon.com. Consistently profitable, replenishable, RA products are the targets. Lean/mean.
– Targeting January 31st as date to give notice at day-job.
– Targeting end of May 2019 as date to move to a more rural location, in another part of the country.2+
10/21/2018 at 11:55 pm #50493
I love the idea of this diary to document the process.
–when you sell Do you own your current home and will you pull equity from it?
–Are retail arbitrage products on Amazon becoming successful for you? “Consistently profitable + replenishable” seems like a white elephant unless you really have a super unique sourcing for nw items.0
10/22/2018 at 8:12 am #50500
– We own a home in a major city, that is currently being rented to tenants that would like to stay long term. They’ve been in it since June, and we’ve owned it since 2015. It doesn’t currently cash flow at all, but we build about $1,000 in equity each month that it’s rented (all else remaining equal), and break even otherwise. We’ve currently got about $40k in equity in it. Still debating selling to pull the equity out, or keeping it for a while. We should have enough cash to make the move and make a substantial (25-50%) down payment on our next home without touching the rental house. Currently, we live about three hours from our rental property, and are renting a house.
– As far as replenishables on Amazon, I’ve found one or two brands with multiple product lines that I can easily find, and consistently sell a few per week each. They’re low (high) enough sales rank that they don’t seem to draw much attention from other sellers, but are popular enough that I’m able to average around 30% profit after fees/cogs/shipping/etc. Not my favourite business model, but a few hundred dollars of profit per month is hard to ignore. I’m six or seven months into consistent returns/income here. The stream may dry up, but for now, I’m milking it.0
10/22/2018 at 9:45 am #50511
Smart. Unless you need to, I’d never sell property since it’ll most likely always up in value if you hold long enough.
That’s an interesting strategy Ive never heard of on Amazon. Focus on items that aren’t super popular but “under the radar” steady sellers. Most those guys seem to always be fighting to get the top sellers and that’s where the car crashes happen. Hey, find ten items that make you $500/month and you have a good living. Are you doing FBA?0
10/22/2018 at 10:33 am #50527
Yes, FBA only. I send in two or three big boxes a month, and the money spits back out every two weeks. At this point, profit is $500-700+ per month. Not bad for 30 minutes of running to a local store, and an hour or so of labelling/packing per week. Just another income stream.0
10/22/2018 at 10:35 am #50528
Winchester – really interested in your story! As a Canadian, that is the same age group (a few years older) and situation as you (2 professionals, married, no kids as well, but we have 6 cats….) and looking to go full-time anytime now.
The number of listings you have is amazing for working full time still – my wife and I are at about 550 as of this weekend, but we seem to sell as much as we find some weeks (which is great!).
We’ve already bought out next home. Currently living in the Niagara Region and moving north a few hours to cottage country in Ontario (Lake Huron) once dying company eliminates me.
Looking forward to hear how things go for you!0
10/22/2018 at 11:41 pm #50581
Thanks Inglewood. We found a few lots of items that are/were easy/fast to “sell similar” with, and it let us set a good base of listings quickly. Of our 1,900+, probably 800-900 are hats, ephemera, and patches. The other 1,000 are comprised of a bit of everything; clothing, vintage/antique items, car parts, housewares, coffee mugs, you name it.
In the evenings after work/supper, if we have nothing pressing to do, I’m either listing, preparing drafts, or researching items. I’ve gotten pretty good at “Netflix & eBay”.0
10/31/2018 at 11:25 pm #51046
End of another month. We hit 1,950 listings yesterday, just making our goal for the month.
Three months until I’m planning to give notice. Aiming for at least 2,300 listings by then. Working backwards, I’m setting a goal of 2,075 unique eBay listings by the end of November.
In the meantime, I’ve been working on an Amazon deal that could have significant potential to my bottom line. I won’t get into too much detail until I know if it is coming to fruition or not.0
11/17/2018 at 9:39 pm #51883
We met with the bank on Thursday to make sure we could get approved for a second mortgage, based on the lower income we expect my wife to bring in, and what I realistically expect my eBay/Amazon income to be. Fortunately we’ve been banking cash, and have some substantial bonuses/dividends/etc coming in before we move/buy, so it sounds like we should be able to get approval, while keeping our rental property.
Currently at 2,010 listings total. On pace to hit 2,075 by the end of November as targeted.
Amazon keeps chugging along consistently, and I’m just waiting for Amazon to update the listings for the new product I’m getting ready to send in before I can see how sales pan out on it. Crossing fingers.
44 more days at the office before I can give my notice without jeopardizing my bonus/dividend. Not that anyone is counting…0
11/18/2018 at 9:16 am #51885
What is the second mortgage for? Operating money while you move and transition to eBay full-time?0
11/18/2018 at 1:00 pm #51887
Good question. I suppose I should have specified;
Maybe more appropriately, I should have called it an additional mortgage. We’re keeping the exisiting mortgage on our rental house, and will be getting an additional, new mortgage for the home we’ll personally move into. If we really scraped, and dipped into our retirement savings, we could pay cash, but I’m hoping to put 40% or less down on the new house. I want to preserve as much liquid cash as possible as a rainy day fund, and to invest in other income streams down the road.
Having the bank give us a soft yes, and acknowledging that we’re in good enough shape financially to make it happen is a relief (moreso for my wife than for me. I knew we could make it work one way or another).0
11/18/2018 at 2:23 pm #51888
Got it. A mortgage on your second home. That’s makes total sense since interest rates are still historically low.0
11/18/2018 at 4:30 pm #51891
In faith, I’m surprised you told the bank about your ebay plans. I probably would have touted the 9-to-5. But it sounds like you were convincing! 🙂0
11/18/2018 at 8:00 pm #51901
We went to them with very realistic numbers, and we’re fully transparent. My wife will be taking approximately a 50% pay cut, and I’ll be taking a 60-70% pay cut (in the beginning). We could/would have the ability to buy the second house cash if forced to do so, and I think that alone helps greatly.
Fortunately, I have been claiming my eBay/Amazon income on my taxes, so I’ve got hard numbers and tax returns to back up my projections. Had I been flying under the taxation radar, I think it would be a much tougher sell.0
11/18/2018 at 9:03 pm #51904
Fortunately, I have been claiming my eBay/Amazon income on my taxes, so I’ve got hard numbers and tax returns to back up my projections. Had I been flying under the taxation radar, I think it would be a much tougher sell.
This is a great point. Those sellers who try to hide all their income on their taxes make it difficult to access credit.0
11/19/2018 at 9:42 am #51917
Love this story and journey!
When you move to eBay/Amazon full time, do you expect that you will increase your weekly purchases of inventory by 50%? 100%? How are you funding that extra capital expense to keep the business flowing?
Also, what is your normal STR? Looking to see how soon you should start to see returns on your increased listing activity. Would you expect to see significant cash flow returns in 4 months? 6 months?0
11/19/2018 at 4:18 pm #51993
Hey Troy, answers/comments:
“When you move to eBay/Amazon full time, do you expect that you will increase your weekly purchases of inventory by 50%? 100%? How are you funding that extra capital expense to keep the business flowing?”
With amazon, I’ll purchase as much as I have time for, and as much as the market will bear. With the exception of the odd RA clearance item, or toys in Q4, 90% of my amazon stock is replenishable items. The kind of things people run out of, and pop online to order more of. Every time I send in boxes to FBA, I’ll try one or two more products to try and go wider. So far, it seems to be working, and is somewhat consistent.
If I can pad out my bottom line with a few hundred dollars a week in consistently selling items, it’s ideal. To this point, I’m maybe spending about $1,000-$1,200/mo on inventory, and am turning about 30% profit on that investment, on average. As I go wider, this may increase, but I don’t have plans to spend $10k on a new private label item, or a big wholesale purchase any time soon, so capital isn’t a huge concern.
“Also, what is your normal STR? Looking to see how soon you should start to see returns on your increased listing activity. Would you expect to see significant cash flow returns in 4 months? 6 months?”
Seems our normal sell through rate hovers around 1% each week. As we’ve been ramping up our listing, it seems to be slowly trending upwards (possibly due to the Q4 rise though). We get most of our items pretty cheap, and one of the great benefits that I guess I haven’t really mentioned yet, is that we buy our items in Canada, but sell the majority of them on eBay.com, in USD. So if I buy an item for say, $3cdn, and sell it for $25usd, instead of a profit before fees of $22, it works out to more like $27.50. The exchange gives me about a 25% bump in income right off the bat.
I don’t expect to see any sort of explosions in cash flow, but do anticipate over the next two or three months to see a slight/gradual rise. When I go full-time in February(ish), I’d hope to see it accelerate a bit more. For now, I’m ok if things don’t pick up substantially until January. Anything that sells between now and January 1st will be taxed at my current marginal rate, which is much higher than it will be next year, so I’m ok with getting our inventory numbers up, in anticipation of future sales, just as much as increasing our income now.0
11/20/2018 at 9:16 am #52036
Ok, so capital isn’t an issue. I know that many people when they go full time (ourselves included), we knew that we were going to have to increase our weekly purchasing, so we needed the capital to do that. I was wondering how you had that covered off, but sounds like you do.
And your STR was the other side of that equation from a cash flow perspective: how soon will your increase in purchasing start showing increases in sales? (and a recoup of your initial cost). For us, we are a 5X seller (we get 5X our purchase price in sales price) and we are in the 12%-16% STR. So for us, if we make a large investment in inventory, we can only expect to see 16% of that increase in sales in the first month. At 5X return, we should expect to get our initial investment back within the second month (sold 32% of the items at a 5X return which equates to 160% of the initial investment).
This is one area that I always want folks to think through before they go full time (and sounds like you have this covered). What is your cash requirements when you increase your purchasing, and how soon will you get that cash back (and start showing increases in profit).
If you are a 4% monthly STR, it takes much longer to see the increase in sales from any increase in purchasing. But if you are a 10X ROI, you get more cash on each sale.
I ran some quick numbers, and if two different sellers make an initial purchase of $1,000:
4% STR, 10X ROI – Recovers initial purchase cost in 3rd Month (12% sold, $1,200 profit)
12% STR, 5X ROI – Recovers initial purchase cost in 2nd Month (24% sold, $1,200 profit)
Pretty close, with a nod to the faster STR. What we want to avoid are low STR and low ROI:
4% STR, 5X ROI – Recovers initial purchase cost in 5th Month (20% sold, $1,000 profit)
Doable, and a lot of businesses can do it, but it requires more capital up front, and solid processes to avoid leakage costs…
What kind of ROI are you getting on your RA items? We never seemed to do very good with them. ROI was too low and fees killed us…0
11/19/2018 at 4:22 pm #51994
“This is a great point. Those sellers who try to hide all their income on their taxes make it difficult to access credit.”
We have been planning to make the jump for some time now, and as a result, I’ve been claiming my online income for just this reason. We hoped to not need much by way of credit once we made the leap, but I knew if we did, they would want to see income history/trends. I don’t mind paying taxes on my income, and the thought of the government finding out and asking for back-taxes down the road is/was terrifying to me. No surprises…0
11/19/2018 at 4:30 pm #51995
I don’t think I’ve fully explained our current shipping process(es) at any point, though they’re a HUGE deciding factor in where we will eventually purchase our new home.
As a Canadian, Canada Post is often very expensive, and tracking/insurance are costly. I looked for alternatives, and found our current process:
We ship 2-3 times per week, and have a mailbox address in the nearest state to us (about a three hour drive away). We print USPS shipping labels with the US address as our return address. Then, we pay a local CBS (Cross Border Shipper) to drive our packages across the border, allowing us access to USPS/etc in the states. Their fee is generally pretty nominal (around $1cdn for a package under 2lbs), and USPS rates/tracking are WAY more seller-friendly.
As sad as it may be, in many cases, if a Canadian purchases from us, we can pay to have it taken to USPS, and pay the shipping costs in USD, for LESS than the same package would cost in Canadian dollars though Canada Post.
As a result, when we purchase our next home, we’re hoping to be a maximum of 30 minutes from the US/Canada border, and to make the trip across around twice a week. There is some paperwork, and some hoops to jump through, but it’s do-able.0
11/23/2018 at 12:45 pm #52197
Hey T-Satt, on our RA items, we’re averaging in the 25-30% ROI range, factoring in everything but income taxes (COGS, shipping, fees, etc).
I am VERY selective with what I buy and send in. When I send my shipments, I restock my replenishables, and try to send in one or two new test items (also replenishables) to try and broaden my reach. I do scan clearance sections/etc, and buy/send in items with a decent ROI, but I never go very deep on them. ROI’s on that stuff ranges from 0-75% generally, but are often one-off, quick hit items.0
11/26/2018 at 10:51 am #52271
Very impressive. Getting a 30% ROI after shipping and Fees is very solid, and all the listing work was done up front when you are just sending in more of something you already listed.
12/03/2018 at 11:48 pm #52620
– We slightly surpassed our November listing goal of 2,075 total listings (we hit 2,080 on November 30th). Aiming for at least 2,150 by the end of December. We’re travelling for the last two weeks of the month, so we’re targeting less for the month than usual. 2,150 should put us within striking range of my original stretch goal of 2,300 by the end of January.
– Amazon continues to slowly expand for us. We keep rolling the profits back in, and expanding our offerings. Some RA, lots of replenishables, and recently, an exclusive deal bringing a new gourmet health/snack food to Amazon in both Canada/US.
– For November, we lived solely on my wife’s income, and the online income(s). We banked 100% of my day job income in a separate account, and were still able to hit our monthly budgets, even though it was a spendy month (new winter tires, a new laptop, more clothing racks, etc). Pretty eye opening to be able to get by without my 9-5 income without much struggle. We plan to keep doing the same going forward.
– Starting to watch real estate listings pretty closely in our target areas. Pricing is very reasonable for the most part. We’re looking for something with a bit of land, within an hour of the border, and an hour of where my wife’s family is, so rural areas primarily.
– We haven’t told my family that we’re moving closer to them yet. Right now, we get to see them 1-2 times a year, for a few days. Once we make the move, we’ll be a four or five hour drive away. Looking forward to telling them at Christmas time.0
12/04/2018 at 11:05 am #52638
Excellent progress! Anytime you can have the discipline (and the mindset) to live frugally, you have less stress and more freedom. Not that you want to have limiting beliefs on what you can do, but having the knowledge that you can do with less is very freeing.
Keep up the work! I’m inspired by your journey!0
12/11/2018 at 8:30 am #53095
Two (three) small selling milestones of note in the last few days:
– On Amazon, we’ve passed, and have consistently stayed above $2,000 in sales on a rolling 30 day window in both Canada Cdn$) and the US (USD$). Still at a 25-30% profit margin. Conservatively, converted fully to Cdn$, that’s around $4,500/mo in sales, and $1,125/mo in profit. Some of the boost may be the Q4 rush, but I’m pretty confident we can hold these numbers going forward.
– Our main eBay account popped above 1,500 listings for a day or so (then some stuff sold).1+
12/11/2018 at 9:58 am #53101
Great numbers again – are you getting a lot of gun-shy potential buyers scared to pull the trigger because of Canada Post? I seem to be getting one a day messaging me and my sales have been slightly lower then expected.
I think the media is doing a very bad job on what they are reporting on shipping times – the comment “parcels won’t be delivered until March” keeps coming up in articles I read, but it’s not in the proper context, yet nothing I’ve shipped or bought has been lagging not more then a day or so more then usually expectations with Canada Post. I blame the media more than Canada Post or the union….
Congrats on the 1500 – I’m using you as my goalposts for 6+ months out…0
12/11/2018 at 10:17 am #53103
If I’m your goalpost, I’m going to have to push harder. Can’t make it too easy. Haha
We list primarily on .com in USD, and ship using a CBS via USPS, so I haven’t been getting any questions/concerns around Canada Post. I’d estimate that 80% of our sales go to the US, 10% to Canada, and 10% internationally. Last week was one of our best weeks in months.0
01/09/2019 at 5:13 pm #54840
Been a bit since the last update:
I am unofficially done with my day job. I won’t be officially done until late February, but I’m running out the clock with some time off. Working my butt off to get our stores ramped up, and to pad out my Amazon sales in anticipation for when the career pay stops coming in, and for when we make our move east at the end of May.
While we were back east over the holidays, we saw a few houses, talked to a few home builders, and looked at some land. Not sure if we’re going to build or buy yet, but exploring all of the options. Most excitingly, and ebay related, I’ve been starting to shop prices on building an office/warehouse/storage building. Looking at stick built, steel, etc. If we end up buying a property that requires us to build an ebay building, the plan is to have it fully self-contained (minus plumbing). Heated/insulated, with dedicated areas for storage, listing, photographing, and packing. In a perfect world, it would also have a roll up door so that I could pull my truck in for loading/unloading purposes, but that might be asking too much.
Fell slightly short of our listing goal of 2,150 listings by the end of December (entirely due to travel). We’re sitting at 2,152 (1,509, & 643, respectively) as of this moment. Still pushing to hit my original goal of 2,300 by the end of January.
Starting to work on finalizing our numbers for 2018, in preparation for a visit with our accountant in late March. Looks like we did roughly $30k on ebay, and around $24k on amazon (both gross). Hoping to get these into the range of $50k on ebay, $60k on amazon for 2019.
In personal news, we’ve booked two trips in the coming months:
My wife is travelling to Vancouver Island for work at the end of January, so I’m using some travel rewards and my new-found weekday freedom to join her. I’ll have a few days to explore new-to-me thrift stores, and possibly do some retail arbitrage while she’s working during the days. Planning on taking my postal scale, laptop, and Dymo in hopes of sending some FBA shipments in (assuming I find something worthy).
We’ve also booked a two week trip to El Salvador in mid-March. We’ll be spending most of the trip with some good friends of ours, and are looking forward to some much needed down time. Coincidentally, we’ll be there for my 39th birthday, so I’m dubbing the trip my “Freedom 39” trip.1+
01/10/2019 at 9:05 am #54863
The ability to travel anytime we want with minimal planning is definitely one of the biggest plusses to this lifestyle. Also nice to be on a trip and decide to stay longer if we feel like it.
Looking forward to more updates. Maybe when you guys buy your new place and get all set up, we could record a conversation about this journey.1+
01/10/2019 at 9:47 am #54866
I’m really enjoying @winchester38‘s story. Looking forward to the updates when you are done your job, and what type of place you find.
I’m excited for you – as mentioned before, you are several steps of my goals/ambitions and it is nice to follow someone on a similar journey. Good Luck!1+
01/10/2019 at 10:55 am #54875
Keep up the updates, and I’ll second an interview on a future Scavenger Life podcast. Would love to hear about the journey!1+
01/10/2019 at 7:19 pm #54905
Jay, its a date. Sometime in the summer maybe, once we’re landed, and figure out which way is up!
Tomorrow, we’re sending a family member to view a home that was just listed for us. Fingers crossed it goes well enough to warrant a weekend trip back across the country to view it in person!2+
01/11/2019 at 12:32 pm #54929
- Location: Washington State
Yeah Winchester – welcome to the other side, you’re doin it! Enjoy the ride man>>>Keep your eyes peeled for Bob Ross paintings on a gold pan there in the Vancouver island area!
01/14/2019 at 6:16 pm #55135
Thanks for the shout out on this week’s podcast!
Trying not to get our hopes up, but we just put in an offer on a home. Sent two separate sets of in-laws to view it for us, and had them FaceTime us through. Made the offer conditional on me flying out to view it in person once we’ve got an accepted offer in place.
Smallish place on 3.5 fully treed acres. Small, desireable, quiet community about 30 minutes from the nearest city, 30 minutes from the US border.
Fingers crossed we strike a deal, and I’m on a plane before the week is out.
- This reply was modified 1 week, 1 day ago by Winchester38.
01/14/2019 at 6:51 pm #55143
How much is the offer?0
01/16/2019 at 1:38 am #55224
- Location: Richmond, Calif.
Winchester, congratulations on making an offer on a new place. There is a lot you will be able to do with “3.5 fully treed acres”. Does it have space for your online sales office and storage or will you have to build something.0
01/17/2019 at 6:23 pm #55332
Well, we’ve walked away from the deal, and are back to searching for a property.
Jay, we had offered $155k for this one. It was listed at $179k, but comparable properties pegged it’s value closer to $165k. After some back-and-forth dancing, the sellers wouldn’t sell for less than $175, and we just couldn’t justify overpaying.
Steve, to answer your question, we’re hoping to end up with at least two acres. If whatever property we end up buying doesn’t have an area that’s ideal for ebay/amazon/storage/packing/listing/etc, we’ll likely look to build an additional building to house the business.
Back to shopping…
In the meantime, and back to the topic of ebay, we’ve passed the 2,200 total listings mark (1,551 on one account, 654 on the other). Should be able to hit our original target of 2,300 before the end of this month.0
01/18/2019 at 9:45 am #55346
@winchester38 – just an FYI for you. About a month ago I was debating subscribing to a U.S. (.com) or Canadian (.ca) store on eBay. I have found out that if you subscribe to a Canadian Store, you also get a U.S. Store included.
For example, I have a basic .ca store, and I not only get 250 Canadian listings, I get 250 U.S. listings for $20 a month (with annual subscription).
I believe you mentioned you had a U.S. store – if so this may save you some extra $ every month.0
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