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T-Satt,
I am in the 10X Gross Return 4% STR crowd. This model has worked for me and I see no reason for me to change at this point. What I do see changing is the scaling part. To scake, I would just keep doing what I am doing, just more on a full time basis instead of part time and hire more people. I would just max out at 20,000 listings and this would be about 8X of where I am now. I would gross about $300K per year. I would have 4 employees working about 20 hours each a week. 1 for reasearch. 1 for photos, 1 for listing, 1 for shipping but would cross train so each one could to all 4 areas. I would have everyone cone in at the same tome for 4 hours a day, M-F. I would also rent or purchase a building. I would have them list about 200 items a week for about 40 weeks (December and July would be down time except for shipping). At my estimate, I would have to get items for about 16 hours a week. The rest would just be managing the process. In this model, I would net after taxes about $10,000 per month. Not bad for only working 16 hours a week for 40 weeks a year with some management tossed in.
Mark
“I think you could do better” – by that I meant you could do better with your model than Jadow’s old model – a better ratio of gross to net. But my point is that the margins will get much tighter and leaning towards that model.
Mark
T-Satt,
I see now that your issue is the sourcing. This is not an issue where I live. Wed – Sun I can find more than enough items for a good price. I don’t go to Goodwill or the like very often. I find most of my items at Rummage Sales, Estate Sales, and garage sales. I really stock up at the Rummage sales. The stuff is so cheap and plentiful. Of course, these are seasonal, so I have to be prepared and go all in while they are happening. Sometimes it is just plain exhausting running from sale to sale, but I try to plan for it. I also always try to do the research, pricing, and put in lots for TBL for it asap while I am still excited. I still have over 800 all ready to go in this TBL state, but I don’t do the volume that you do.
The sourcing online will work, but I see that going towards Jadowa’s old model. At his height he had 10 employees and did $2.1M in sales, but only $150,00 net income. So, it worked for him, but it was 60 hours a week work and not so fun. He turned into a manager which he didn’t like. It looks like your model is leaning towards this. If that is what you want, then that is fine. I think you could do better, but still I think your model is shifting that way. How do you see it?
Mark
T-Satt,
One other item you may want to add to step 1 is having processes in place. Knowing you, I think you probably have a process for everything, but most people probably don’t.
As I start to scale my business, I am seeing the need for more processes to be put into place. My Refund process is really working great this year. Last year the process wasn’t so good so it was more difficult at tax time.
I discovered a very good process to implement last week. Not sure if this is what Mike in Atlanta did, but I sorta got the idea from him in a round about way.
I have a bunch of boxes that I have been collecting all stack up in my garage. I decided to break them down, record the size, and put them on a shelf and record that in a spreadsheet. I have had great results already!
I am saving space, time, and money. Those are the big 3 for my business right now.
1. It saves space – They are not taking up nearly as much room as they did before and I am getting my garage back.
2. It saves time – I have already found 2 boxes to use that were the perfect size for shipping. Just looked it up in the spreadsheet and found the perfect box right away.
3. It save money – I save money in getting the perfect shipping box which saves on shipping cost. Also, I don’t have to buy a box I already have.
Mark
T-Satt,
“How to grow the sourcing”. This is a good strategic question and I like to do and talk about strategy.
I am trying to understand exactly how you see your model going for step 2. Can you explain this a little more? What percentage of buying would be in the wild, percentage of Private label, bulk buys, store buyouts, wholesale, etc.? I know it would depend on what you can find, but what would be your ideal?
Do you really want to give up sourcing in the wild and do it only online? For me, I could do some that way if it made sense, but sourcing in the wild is what is really fun to me. And, as far as I can tell, that is where you find the best margins. I see way to many potential issues getting someone to shop for you in the wild. I would only trust family for this, but that is me.
I understand the need to scale and be efficient, but the items are so plentiful and cheap where I live that I don’t think I would need to look elsewhere. Time would be the only factor for me. I figure it takes about 5 minutes to find each item in the wild. Sometimes it is much faster, sometimes slower, but I think that is a good average number. That means I can find on average 12 items \ hour or about 100 in an 8 hour day. Two days of that a week should cover me no matter how big I grew (that I can imagine right now). The average selling price is about $35 – $40 and I can get them for about 10% of that, or $3 – $4 per item. Are you not able to get that where you live?
Mark
06/03/18 – 06/09/18
Total Items In Store: 2,428
Items Sold: 12
Cost of Items Sold: $50 (around)
Total Sales: $ 607 (11 items $346 for ebay + 1 item $261 on TrueGether)
Highest Price Sold: $ 261 (Lot of Covergirl Make up on TrueGether)
Average Price Sold: $ 50.58
Returns: 2
Money Spent on New Inventory This Week: $ 171
Number of Items listed this week: 30This week would have been a bust if it had not been for the Covergirl Make up sale on TrueGether. I can feel the Summer slow down starting to kick in.
Buying inventory this week was great. Similar to how great sales come and go, so do great buys. This week it seemed like I could do no wrong where I went looking for inventory. Perhaps it went well because I went to the more affluent area of town, I don’t know.
The condos in this affluent area had a lot of older people who had great vintage items for sale. My buy of the week was a 1964 Electrolux Vacumn (works great) with attachements, Original receipt, papers, and extra Bag. At first I passed on it because I haven’t bought a vintage vacumn before and didn’t know what they were worth. But after looking it up, I couldn’t get the $7 out of my pocket fast enough. And at the time, I didn’t know that it came with the Original receipt and papers for it. I am going to list it for $250. I also bought a Set of 3 Baseball Bases (also a first for me) for $5 and looks like I can get about $60 for them. I also picked up a lot of 12 vintage C Clamps (also a first for me) for $5 which I think I can get $100. And lastly, a 1960’s Conn Shooting Star Cornet in the Original Case. I have bought a Cornet before, but not this brand.
My low point of the week was when someone bought a coat for over $200, then messaged me to say that it was a mistake. That is the second time an item worth about $200 was purchased by mistake. How do you purchase and pay for an item by mistake?
In both cases the owner only discovered that someone working for them purchased it when I printed a label and they got the message that the item was shipped.
Mark
Katie,
I am going to be down in the St. Pete FL area from June 29th – July 5th.
Remind me the name of the good pizza place.
Also, let me know if there is a good time to go picking.
Mark
T-Satt,
I couldn’t agree more. We have to focus on what we can control. In turn, doing the basics right will generate the sales we need.
I could compare it to sports. In football, if you focus on the basics of good blocking, tackling, establishing your running game, and executing well, you will score points and win games.
I have found the same to be true in this business. If I list, ship on time, delivery a great product, and treat the customers right, all is good and that puts me where I need to be.
Mark
05/27/18 – 06/02/18
Total Items In Store: 2,414
Items Sold: 19
Cost of Items Sold: $50 (around)
Total Sales: $ 532 (480 for ebay + $52 on Bonanza)
Highest Price Sold: $ 85 (Red Wing Boots)
Average Price Sold: $ 28
Returns: 1
Money Spent on New Inventory This Week: $ 22.50
Number of Items listed this week: 41Slower week of sales, but still ok. Bonanza has been on fire for me lately. I have had 5 sales for $190 on Bonanza in the last 30 days. I know that doesn’t sound like much, but when you consider I only had 13 sales total for 2017 on Bonanza, that is pretty amazing! Nothing has changed for me on Bonanza, so I’m not sure why so many sales there lately, but I am not complaining. I just hope that keeps up.
While out at garage sales this weekend, I found a great history book on my town that was written in 1968. It has a large number of pictures from my town from the 1800’s through 1968. What a great find for $5! It will take a while to digest everything because there is so much information in the book.
Mark
Hi Luftmentsh,
The economic effect is called Veblen good.
See the link below.
https://en.wikipedia.org/wiki/Veblen_good
Mark
I was confused about how to keep my Top Rated Status for Free Returns so I called ebay.
Carlo in the Returns department said that this is only for items you list now and going foward. I was confused on this point, I thought it was like 1 day handling, you had to update past listings. He said no, just offer free returns on new items that you list.
He also said that ebay will reimburse you for the label that you send to the buyer for the free return. Now that is something I haven’t heard anyone mention before. Has anyone heard this?
Mark
I have had success with old software and hardware. I am a computer guy and remember a lot of this stuff. Not all of it is good, but I usually know what I am looking at. I was at an estate sale of a guy who had a ton of old computer stuff. I went through the whole basement and took anything I could find of value. I found zip drive tapes still in the package. I found a lot of software that sold. I didn’t make a killing, but it was cheap and I did make a profit. Yes, the more complete it is the better. I still have a lot of disks to go through.
Mark
Doublythumbs,
The only down side on the Strat-o-Matic games is the number of cards you have to count for each team.
Then you have to list of the parts that are in them. So big deal, just time consuming, but it is worth it!
Mark
05/20/18 – 05/26/18
Total Items In Store: 2,382
Items Sold: 20
Cost of Items Sold: $60 (around)
Total Sales: $ 754 (651 for ebay + $103 on Bonanza and TrueGether)
Highest Price Sold: $ 200 (Strat-O-Matic Game)
Average Price Sold: $ 37.70
Returns: 0
Money Spent on New Inventory This Week: $ 44
Number of Items listed this week: 0I went up North in Northern Michigan for a long Memorial Day weekend – what a good time. Had some good sales while I was gone and picked up some nice items. My best find was a Vintage Fisher 202 Futura Series Stereo Receiver with a wood top for $6. I am going to list it for $175.
The wildlife was great up North. I saw Turkeys, Sheep, Deer, Ponies, Horses, and a porcupine (first time for that). We stopped at an Amish Bakery and an Amish Farm. Real nice people with seemingly simple lives. The guy who owned the farm had the job of making shoes for the horses – what a great job. We usually stop at an Amish hardware store – they have unique utensils there, but we didn’t stop there this time. If I could only get them on ebay.
The Strat-O-Matic Game was the last one I had. I had bought a number of games and cards in 2014 for $14.50 and I let them sit till Brian mentioned how well they sell. So I listed some then some more. With this last sell, I have grossed $872 (w\o shipping) on these. I will buy those again if I ever see them.
Has anyone else noticed an uptick with Bonanza lately? I made 4 sales for $162 in May on Bonanza. I only had 3 sales for the year prior to May.
Mark
