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“If you ain’t first, you’re last” is the key. I’ve been playing the RA game for the last few years and got burned a bit a few summers ago. In Canada, McDonalds released various sauces like “Big Mac Sauce” at grocery stores, I bought about 48 bottles for $4 each and the first three sold easily for around $40. Then the market got flooded. The price dropped, and I was stuck with 45 bottles of something I don’t really like to eat. I ended up donating the rest to the food bank.
I learned to play it safe on items like that – just buy a few, and I could always buy more if it remained hot.
Now, almost all the RA we buy is something we could use. For example, I bought 10 big and tall shirts last week – but just in my size. I’ve already sold one, and need to sell 3 to make a profit. Any shirt I don’t sell, I’ve made sure it is something I would wear. So if I sell 3, great, if I sell 9, I’m well in the money, if I don’t sell any, I have some nice new brand name shirts to wear one day. This is something I do often, so I know I’ll do great, and the odd shirts that don’t sell I’ll use eventually…
Another RA item I just listed is a discontinued specialty men’s shampoo – again, bought it cheap enough that if I have to use it, I’ll just have a couple months of shampoo to use up and it was cheaper then the shampoo I usually buy. The scent isn’t something I really like, but bearable if I lose out on the gamble. In this case I bought 15 bottles for $1 each, and see others have sold them for $20+. I have mine at $18, and I sell one, I’m safe.
I’d hate to be stuck with something I couldn’t use in quantity from a bad RA buy again. I wouldn’t have gambled on the Monopoly games in large quantities at $20 like the video has.
I think that almost any business has no issue getting rid of “garbage” if someone wants it – dumpster rentals are very expensive and the less often they need a pick-up, the more they save as well.
You just need to build a relationship with the business owner. Businesses that get a lot of courier items like pharmacies have lots of packaging to get rid of. If you know your local delivery/mail drivers, they probably know places for you to ask.
Packaging materials should be part of your cost of business if you don’t have a free source. In the end it is an annoying expense, but is part of the deal when you need to ship an item.
I would say the $20ish purchases that turn into $100 quickly (less than a month) are once or twice a week. Most of my purchases are under $5, and the sweet spot would be around $2 (just based on my averages). My wife is the opposite – she is into designer fashion brands – rarely finds anything under $10, but the reward is high on every sale she makes. Majority of my sales are the $2 or less items going for $20 to $30 on a consistent basis (1-3 daily at my current inventory)
Right now, I’m limited on my scavenging time, therefore, I take what I could find. It would be interesting if my purchasing shifts as I get deeper into the full-time transition. It will be interesting to compare my numbers 1 or 2 years down the road.
It would be an interesting conversation – scaling is a challenge especially if you depend on the income. As I am currently not dependent on eBay income, it will be interesting to see what happens when the switch is flicked and I am. Luckily, I’ll have a at least a year of slowly declining income after losing my job to master things – I know others have an instant change.
I’m personally OK with paying a high price for inventory if the returns are high. For example, I went shopping at lunch and found a few items that others may consider a high price paid:
-a hockey jersey for $17 – I’ve sold several the same for $90-$100. Should sell in less than 1 month at that price, but I could push for $120 or more, and the same has sold for $160 recently. The more I ask, the longer my $17 investment sits, but at the low end of $90, minus say $15 for fees, I’m left with $75 or a $58 profit in a few weeks. $17 is also a lot of money – once my situation changes, I could easily live off that for a day. Would other scavengers make this “investment” or see it has a high price to pay? I’m curious.
-on the other end, I bought a remote control for 50 cents. I sell several of this same remote a month for $20. This is a “no brainer” to me – copy a completed listing, a couple photos, and done.
With the hockey jersey, I invested 34x as much as the remote, to make about a 3x return. The return is still good on the hockey jersey, but obviously the remote would be a better investment if I could get more of them – and if I had the choice between 34 remotes, or the jersey, I would choose the 34 remotes for the same investment. The jersey will also take more time to photograph, and listing may be a little longer.
I think it is an interesting conversation – tie up funds with a sure bet, or wait for a sure bet that will pay off more…or take both bets like I did.
Thanks for the tip on the Marine Vinyl…I’m constantly going to the dollar store to replace my Bristol board backdrops as they get smudges, dirt, or dinged up from use. I’ve tried felt, cotton sheets, painted wood but hoping this is my answer for a strong, cleanable, and easy to store photo background. Looks hopeful!
The capital needs of our business has been the most interesting part. I wouldn’t say we underestimated it, but it seems to be an interesting challenge as we are expanding beyond where we have been in the past.
It is not only inventory cost, but also investing in “equipment” such as shelving, bins, etc. to store the extra inventory; and if you count “time” as capital, we’ve been putting in a lot more time to reach our goals. Space (storage) has been the challenge as we grow, and thinking about how to organize our inventory.
The other capital I would say that we are spending is to learn – we slowly are buying little tools to make things more efficient, trying different things (at the expense of time and a bit of money) to try and become more efficient, and taking a few risks on different categories and larger items we would have left behind in the past.
The business is completely self funding so far – this month is starting off very well, and we hope to turn a decent profit this month even with all the capital investments we’ve had to make to expand.
I’m still using a Compaq Presario from 2001 (I bought it open box then from what became Staples) running Windows XP to print all my shipping labels…the thing won’t die!
My main eBay computer is an Acer Laptop from 2014 – it is also my TV’s PVR, and I stream all my media from it (music and video). It has been running 24/7 for years with no issues. I’m thinking of replacing in the next few years as when I’m downloading video, listening to music, and listing on eBay all at the same time, it is starting to chug along. I’ve tried an iPad I just got for Xmas for eBay work, but find it takes a lot longer – still like the computer.
I find my local thrifts are split into those that have anything worthwhile overpriced (and some even print off ridiculous eBay listings that are unsold to put on the item!), and those that are reasonable.
From a scavenging perspective, I just go to where the sourcing is good, and avoid the annoying places. There are places where I walk in and I can’t find anything at a reasonable price these days, however, other places I leave with 10-20 items I know will sell and I don’t have to do too much hunting.
The best places seem to be volunteer, non-profit, charity stores. Value Village, Savers, Goodwill, and any other “chain” place seem to be mostly unreasonable, but still they miss the odd item.
There are certain areas of electronics I dabble in, and my best advice is to pay less than what it would sell for if you had to sell it for parts/as-is/needs repair if you can’t test it fully when you buy it.
Also, get to know your electronics category – certain areas have higher issues. For example, about half the cassette players (Walkmans up to cassette consoles) don’t work completely when I bring them home. Where other items, such as video game consoles or remote controls, typically work 95% or more of the time.
Some of my best buys have been electronics, but most of my worst buys have been electronics. I’ve really narrowed down what I want to get involved with over the last year as the time to test, repair, and clean some items isn’t worth the profit it use to be. Prices also seem higher when sourcing, and the sales prices on some categories has gone down significantly.
Good point Jay – our average item cost was C$2.66 (or US$2.03) in January. It may be something to watch (I do not have it on a spreadsheet, but it is an easy thing to add).
Our sourcing at the moment is about 85% thrift, 15% RA. We’re scoping out some local auctions, but based on there websites, it looks overpriced (unfortunately, the auction houses are in a tourist area and may not be the best for sourcing).
We tend to look at items in different ways when we buy – we typically want to buy at 20% the sale price or less, but occasionally if there is something I can flip quick (and I mean in days), I will spend higher (up to 50%). January’s numbers were all below the 20% number.
Thanks for pointing it out – it’s another interesting number for us to track with our progress.
I think the interesting part of this month is the change of mindset when expanding. We’re not too worried about the net profit, but the future size/potential of the business.
What we are thinking is if you compared it to a traditional business, say a convenience store, when you start up there is a huge amount of costs involved to get the business off the ground – inventory, equipment, and learning how to operate. If someone wanted to start a convenience store today, they would have a huge investment up front to get started – they can’t do it slowly or nobody would come in. However, with an online business, we can build up slowly, re-investment the profits to grow, and the payoff one day will be a fully-stocked turnkey business that has already been paid for. Then we can decide to go into maintenance mode (replace items that we sell), expand at a slower rate (so we have enough income to support us when required), or even slow down if we hit our income goals.
In the next couple months we will easily cross our minimum expectations for income. Then, the challenge will be to build up to where we have a comfortable income level, and then decide if we want to continue to expand. I’m personally all in for expansion when I’m not dependent on the income, but I can see the current pace burning us out when the weather turns nicer.
Diversification of income sources is also something we are looking into. One of my other hobbies that I make some income off of is installing OTA TV antennas and components – unfortunately, it is a business that will not work in our new location as I don’t think many people would pay hundreds of dollars for a setup to only get 1 channel (CTV2 at that)…so that side gig will disappear. We have a few ideas that we are looking into but I think we need to understand our new “local market” better before we jump into anything.
I’m excited for this month – I see similar results and expansion that we had in January continuing and the numbers have been very positive (a little better than expected). I can say the results, and hard work have made us very happy and we have a good outlook going forward.
One set of tools I find helpful is all the Shop Vac accessories that are sold – I have about 50 different small attachments by Shop-Vac that fit onto a non-Shop Vac vacuum I use for cleaning. These attachments are not the cheapest at full retail (usually $10 for a pack of 5-10) but having a collection of them is very helpful to clean anything that is full of dust/dirt easily.
Some of the attachments with hard bristles are really good for cleaning off stuck on dirt quickly.
Would have liked to see that! I just can’t figure out what animal his hair came from – I’m guessing several grey squirrels.
Interesting feedback on the thrift store scene in Victoria – I would have thought the opposite with all short term Navy stays, dying retirees, but maybe the cruise ships and tourism may bring in too many tourist scavengers to the area. Or maybe the high mortgages force families to shop thrift stores…I would have picked it as one of the best areas to pick in Canada myself.
Good luck with the retail end! Lots of clearance going on this week and next. Waiting to see what Hudson’s Bay is going to offer this week as the next few weeks (actually, now through March) they dump almost everything and offer crazy discounts on top of the sale pricing.
January 2019
Still a few hours to go in January, but the focus this month has been on eBay after the holidays from work ended for me on January 7th. We have spent the last 3 Saturdays sourcing, and every Sunday listing. The results are interesting in that we didn’t make that much money this month, but we have grown considerably. It’s also been a very good learning experience.
We started January 1st with 125 items in our store. We ended January with 316 items in our store, with 42 sales through the month. Therefore, we have listed a whopping 233 items over the 3 weeks! We have about 50 items still to list as well. We are VERY happy with this progress. Our target was to hit 500 for the spring (April) but think we can hit that sooner.
So what do the numbers look like with this type of growth? Well, not great for the bottom line, but for the future we’re expecting a good payback. We spent $1000.65 on new items, fees, and supplies, and made only a $269.77 profit. Out of the $1000.65 we spent on the business, just over $200 was on eBay fees, gas, boxes, storage bins, and a female mannequin – the rest (just under $800) went to the 233 listed items and about 50 currently unlisted items.
This month we also started to take up our prices on some of our bread and butter items – we have a few items we buy for $1 or $2 that consistently sell (and run out of stock) at $15 – we decided to raise these up to $20 going forward. Still making sales, but instead of selling immediately, we’re keeping up with supply.
Our challenges next month are not much different – our goal is to continue to expand with whatever time we can afford. We are going to go scavenging 3 out of the 4 weekends, and the long weekend we have coming up on the 18th will be to get re-organized and list our unlisted items we have collected by that time. One challenge that we are falling behind on is storage – I like a very specific grocery store bin that they stopped making in the early 2000’s – hope to find more. Also, I can see at 500+ listings we will need another shelving unit.
I’m still employed – not sure why myself, but I am still sitting in an almost empty warehouse 9-5 M-F, listening to the winter wind howl against the doors in the darkness of the warehouse. All the lighting where I work is on motion sensors, and most of the day it’s dark except the glow from my monitor and clock radio. I probably had 30 minutes of human interaction in person this month, and maybe another hour on the phone…the rest of the day has been creating draft listings, doing research, and waiting. The good part is that building my store and not depending on the income is actually a really good thing – by the time I’m redundant, I may have enough income coming in to cover my future bills, which we have estimated at $800-$850 per month. I think we are well on the way.
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