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Wow, take me to the burn unit…Your depth and cracker-jack analysis doesn’t surprise me.
Jay, You’re not seeing the forest through the trees. You’re still focusing on the quick sale kick. Price and quantity of the sale. I’m focusing on the quality of the sale. What it contributes to the bottom line. I will go out on a limb, without even knowing your financials, to say that I am confident that I am more profitable than you. Why would I say that? Because of the spread between our STR is so large, I have a greater advantage right out of the gate. Likewise, your inventory at 5500+ is so large, that your margins would have to be so equally massive to out strip the benefits of my smaller inventory of 300+ items.
Why? You spend $300 a month for you store. You’re STR is anywhere from 4.4-20% (I’m being generous on the 20%). Based on your # of sales, to maintain the same level of ROI, you are paying anywhere from $1.20 – 2.0+ per item. Even before it sells. A factor to consider when sourcing. Whereas, I spend $60 a month for a store and with a STR of 30% and given the level of my sales, my cost of listing an item is less than 0.49c. So when I buy something, I figure an additional 0.49c to its cost.
Now let’s include the detriments of your large inventory with low STR. You never have disclosed your total inventory cost that I can remember, however, you often use the figure of $3 an item. So let’s use that. Average 5500 items at $3 a pop, that’s $16,500 in inventory. If you stopped adding to your inventory today, everything being equal, it will take you 5 years to sell, at a cost of $18,000. 20% over its cost. Which is fine.
Again, whereas, I will for sake of argument, match the $3 cost per item. At $900+ in inventory, it will take me 1.5 years to sell at a total cost $1080. Still 20% over its original cost, but I will have 3.5 years’ head start of using my $ for other alternative investments (Read compounding).
I believe the reason you don’t see it, is that you are seeing increase sales, although your sales are not keeping pace with the level of increased inventory. At some point in time, by continuing down this path, you are going wake up and find yourself inventory rich and cash poor. You want to see it sooner? Stop listing new items. Soon you will be robbing Peter to pay Paul.
I’m going to forgo the personal attacks and only say yes. I do have many financial books and a degree to boot. I’ve been using them in my personal and professional career for 36+ years. You can easily check my career history on the sec.gov website where I have cut my teeth in finance, managing millions of $ and poured over what seems to be thousands of financial reports and investment proposals.
I can also say that focusing on selling on eBay, or ecommerce for that matter, has only been a short journey of just over 2 years. Even though I have been selling on eBay since early 2003. Hardly a score card I would want to be judged on. This journey is not to supplement my income, only to find a suitable alternative investments. I’ve made my $ already. I’m just looking for a place for it where it will work hard for me using the tools and knowledge gained over the decades.
I do practice what I preach, both personally and professionally. And will take any opportunity to express my passion to whoever will listen and on any platform that will allow me to. How 36 years ago, not yet entered college and no assets to speak of. $98 in the bank and just under $1500 in a mutual fund account, have since, with 10 years remaining until, officially hitting retirement, have met 73% of my retirement goal, accumulated 2 houses with mortgages, 3 vacation properties (1 in Hawaii, 2 in Florida), 2 apartments, 3 fully owned vehicles (under 4 years old), currently putting 2 kids through college at $89k a year, and lastly, still able to save 10% a minimum of our income.
How do we do it? We didn’t hit the lottery. We came from blue-collar families with no rich uncles. We didn’t have 6 figure incomes. We didn’t sell a business or received large inheritances and we both have been let go of our jobs at some point in our careers. The secret… WE STARTED EARLY. We really didn’t know then, what we know now, but we followed 3 simple steps to building our wealth. We made it, we saved it, we invested it. We did what we had to do. SPOILER ALERT: It really kicked in 22 years ago when we started with $25 a month into an education fund 6 months before my first daughter was born. It was $25 I didn’t think I could afford.
These tools are not new. No secret behind it. You can even find it on Mr Mustache. But you need to understand it and do it.
My passion for finance is that it is fundamentally relevant to all that goes on in the modern world. I preach on the premise that all personal financial crises are self-inflicted. If you need to work, then work. If you need to educated yourself, then educated yourself. But stop living like life is a dress rehearsal for something better down the road. You don’t get a second chance. Do what you need to do first to secure your future for you and your family, then, and only then, can you have a choice between CHOOSING to do something then HAVING to do something… Building wealth is easy… keeping it is hard.
I think I overstated my point.
Jay, I see that you’re still not grasping the concept of compounding or not connecting the dots. You came to some unrelated conclusion based on looking at items in one of my stores and without knowing what or when I paid for an item and what my Total COG’s are. All key factors in understanding and the application of compounding.
I guess we could crudely calculate a Sell-Through Rate (STR) of each other’s store and compare numbers and argue in some way that my 39%+ vs your 12%+ is validation of the discussion, but this would be misleading taken in its entirety and says nothing of what we paid or how long we have held it.
For simplicity sake, without any numbers, let me try putting it another way that maybe better understood. The concept of compounding is not something as sellers, we decide to do or not to do. It’s applied automatically. Its affect (+ and -) is based on the frequency of sales. If your inventory level doesn’t change and you want to increase ROI to the bottom line, you increase the number of sales. Decrease ROI, do less sales. Changing the frequency of compounding.
And the reverse is true when changing the inventory levels. Increasing inventory with level sales causes lower ROI. Lowering inventory, higher ROI.
So extending this to personal finance to further help in the understanding. If a person is looking to borrow money and is looking at 2 different loans with the same interest rate and payment periods, but one has a higher APR than the other… it means the frequency (compounding) of the loan payment calculation on the one is higher than the other. All things being equal.
You are correct. Holding to a long-tail, list-it and forget-it sales practice has worked for you. It’s a given. In aggregate, you sell items for more than what you paid for them. But at what cost? (its rhetorical). Only you can answer this because you need your balance sheet and P&L statement details to answer this question.
But the practice of throwing more inventory at the wall and seeing what sticks is IMO a waste of money and feels like working harder, not smarter. I agree again, sales will increase… but at what cost? (again, rhetorical).
I prefer to be proactive in my approach in working smarter. I work with the inventory that I have and when I add to it, have answered everything I need to sell it. I actively market and watch my SEO metrics closely and react to them when I need to. From minor listing revisions to complete overhaul. In finding alternative sales channels when others don’t work out. In seriously question holding something for 18 months and lastly, not afraid to accept failure by cutting something lose at any price. Even donating it back for the price I paid for it. And yes, to bring it back to our topic, try to sell more frequently. It may sound like a lot of work, but surprisingly it takes less time in a month than listing 10 items.
So my answer to the original post… ROI per item is irrelevant without considering how long it will take to sell the item. Because it is the ROI to the bottom line that is more important than the ROI per item in building wealth and equity.
You want more light? Remove the umbrellas and point the lights at the subject. Much like your top light. The point of the white translucent umbrellas, used properly, is to diffuse the light reducing the glare and harsh shadows giving a softer look.
Also, in looking at your picture, the light source is shoved too far into the umbrella. Can you see the dark edges of the umbrella? In normal use, the umbrella should illuminate the umbrella completely. Only with smaller subjects and tight spots do you move the light source into the umbrella.
I’d suggest doing a google search on product photography lighting. You will find the preferred lighting for product photography are light tents and softboxes (my preference) but the concepts are the same when using translucent umbrellas. Not to be harsh, but if you are going to spend the effort and money into a setup like yours, it’s best to spend a little time in using them correctly. You will have a better quality pictures and the knowledge will help when you have odd shaped or reflective objects.
I appreciate what you’re trying to say, but you are not fully grasping the concept. I feel you are associating the concept with a business model that dictates a need for high frequency selling. This is furthest from the truth. Thinking this way is like tripping over dollars trying to pickup nickels.
I agree it takes the same about of time to list an item regardless of its price, but when you include the frequency of selling the item, your margin becomes less of an issue.
Take for example 2 sellers that have $5 to start out. First seller purchases a lamp for $5 and is confident he can sell it for $100, but it may take a year to sell. The second seller, purchases 5 pieces of clothing at $1 dollar each, with the expectation she can sell them all within 60 days (2 months) for $5 each. On a per item basis, Seller 1 has a ROI of 1900% while Seller 2 has an ROI of only 400%, less than 5x that of Seller 1. On the face of it, some people would gravitate to the higher ROI. Both sellers commit to reinvest in their inventory. At the end of a year, who is going to be better off? Due to the compounding frequency of 6x a year, Seller 2 will have sales of $3,125 compared to $100 for Seller 1. Even if it took Seller 2 six months to sell her clothing, she would still be ahead by $25. So ROI is not a singular determining factor.
It’s the same concept that is taught in personal financial planning for retirement and wealth management. The sooner you start saving, the sooner you will be financially secure. Earning 9% annually, a person that is at age 25, puts away $1200 a year ($100 month) for 30 years (age 55) will have accumulated $179,490 with only setting aside a total $36,000. A person that waits until they are 45 will have to save almost $12,000 a year or $118,000 just to equal the person that started at age 25. $36,000 vs $118,000?
The whole concept is about helping reaching one’s financial goals. Earning a respectable income, being able to quit one’s job earlier, not having debt, building equity, starting a new business, having that F*** Y** money. Whatever the case maybe. But just remember, holding out for the top dollar or selling slow moving inventory than need be, puts you further behind. You will have to list more and thus invest more into your inventory just to keep up. $36,000 vs $118,000?
So back to Salt’s original post. “…best prices to sell at that’s worth your time and a realistic low end ROI?” Depends how long it will take me to sell. I’ve been known to go from estate sale directly to an auction house in the same day because I can sell certain items quicker within 2 weeks at an auction house than I could in my store, eBay or CL.
It’s not about listing more, it’s about selling more.
Previously on this forum, I showed that often times, simply doing a search using just 4 words and changing them around will result in a different result. So yes, there is some credence that suggest some ranking of the order of words.
Interesting question, but don’t you think it is important to also consider how long it will take to make that $20 sale? How would your answer change if it took 1 month for that sale vs 1 year?
If I paid $10 for the item and sold it in 30 days for $20 and plowed my profits back into the business and purchased more $10 items and resold my inventory every month, by the end of 12 months my total sales for the year would be $10,240. Now that sounds a lot better than waiting a year to sell an item for $20
What I’m getting at is the concept of compounding. A key concept every seller should understand in building wealth and equity. If you have a car loan, mortgage, savings account… then you should already be aware of the concept through APR.
Now the above example is an over-simplification of a simple but effect concept in building wealth and equity. The more frequent periods, the higher return value. Also a concept that cautions against having stagnate and “long-tail” inventory – regardless of its cost.
Jay has a point. A seller would really have to be a tool to be fully kicked off the system. I know of only one person that had done so for not shipping something they sold. She was a first time seller and thought the process was easier than expected.
Personally, I’ve been suspended once for 3 of 5 days from doing any new listings (Ya! mini vacation). Honestly, it’s so many years ago, I don’t even remember the reason.
And although there are no limits to the number of accounts an individual can have (I have 11), doing so for assurances of having them for backup purposes for such event seems fruitless. eBay tends to have a bead on all associated accounts of a given seller ALONG with accounts from related family members.
I’m an advocate of having multiple selling channels with only one as a primary. So if you consider yourself a business owner, this question should be directed to what channel would you jump to in the event that eBay access is lost?
If you have business policies set, you should be able to see those listings with free shipping set.
Yes. You can assign the same to multiple items.
You didn’t mention if you already use the SKU (custom field). If not (although you should for inventory control), you could assign a code to group listing together using this. making it easier to sort and bulk edit.
Picking Pair is correct. For the translucent white fabric, the umbrella’s outside should be pointed at the object. Much like a the use of softbox. The way you have them set up are for reflective umbrellas which are commonly used for flash.
After graduation, a group of us and a few others, attempted to form a partnership with a similar purpose. At the time, the state of Michigan was using single family homes to house individuals under state care. They would pay for all of the improvements for handicap use. Including any repairs. When the lease was done (min 10 years) they would also pay for construction to have it put back. Could never get the project off the floor.
Two of my mates went on and did it on their own. Huge success.
Bottom line. Everyone needs to have the same fire and passion to even remotely work.
I hear ya! Until the big man shuts you down. So it’s list sell… list sell… list, removal, hand-slapped… [REPEAT]
As my 80+ year old aunt once said to a police officer when she was pulled over for speeding “The only reason you pulled me over was you couldn’t catch the others.” Yep. She was ticketed… her first.
Respectfully, Callused Hands
