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T-Satt Love to share, I am sure I will get a couple of great advises and recommendations heheheeh
Which report you want to see? For me it is just a matter of generating on QB.
I too break down by platform, each one is under the top level cost center (I am about to change the numbers, not decided yet).
“So are you applying a standard cost for your expense types and capitalizing to your inventory? And then allocating variances somehow?”
Not a plain flat standard cost, more like expected expenses. The variances enter in an Operations subline to even things“For me, the only COGS I would care to report are Inventory (Purchase Price only) and Shipping Expense. For us, Revenue – COGS – Shipping would be Gross Profit. All other lines are Operating Expense. Again, you can argue some other lines like Labor and Packaging, but since I only use Quicken and Excel (not QuickBooks, that is overkill for me right now), I want to keep it simple.”
Hmmmmmm, After these chats I am seriously considering to reclassify shipping expenses as operational instead of COGs. I have a CPA i have like a contract, however I build my CoA myself and he or his team ever argued with my methodology. However after what you and MDC Galleries commented, I took a look in some books and, at the high level, all of them say the way I am doing is WRONGI still have a few things on Etsy and Grailed, however I am phasing out.
I keep the sites I can synchronize since they don’t demand anything in terms of extra effort.
Like Sue said like a year ago, Etsy is very good. People there buy things I cannot sell on eBay (Arts and Antique for the connoisseur for example), however the income does not pay comparing the fees.I also diversify having a second LLC for my Engineering Consulting. Even though there are contracts that last a year, others that last a month, usually the pay is just crazy (remember Istanbul? I got $33k per each month I was there plus a few days working from home).
I was building a backlog of contracts but I decided to not take the “cheap” ones so the volume is much smaller.
Fantastic MDC Galleries, this is what I do and for the reasons you mention. At the end it is more money in my pocket than if I was running as individual.
Also, a question if I may: do you mind elaborate a bit on “And also include the procurement cost divided by the number of items per procurement trip. [the $.56 IRS per mile divided by how many items that trip] or use the procurement as expenses.” This piece I did not understand and apparently do not have knowledge on.
Thank you
Right on T-Satt!!!!!!
Getting ticky-tacky hhehehehe, from my Revenue (or income) I have 3 cost centers with actual revenue: Sales, Income Resulting from Sales Shipping and Refunds. That is my gross revenue or total income.
The for COGS I have 7 cost centers that basically reflect your items above.
However, I have one COGS cost center for delivery and one for the Fees. I attribute the variances on an annual basis and then apply to inventory. On these two items I think I am making mistakes.
Anyway, from the gross income minus COGS I have my Gross Profit.
Then I have other 7 cost centers for non COGS expenses (here is an evidence I am doing something wrong because one of the CCs is for Fees and Comissions, I think this is where the darn eBay fees would also go).
Then subtracting that from Gross Income I have Net Operating Income (which in my case would equal a non GAAP metric, the EBITDA and Net Income.
My rationale for both shipping and fees seems to be wrong since one way or the other they are operating costs and no way materials.
I think I will change it in my Quickbooks.
For now I make my Net Income = Net Profit because I do not have the ITDA part of EBITDA heheheMDC Galleries: far from comparing sizes since my store is small, I have my domains, same name as my store, with some content.
Did not develop it further since I wanted the cash flow to pay for it, but I plan to. Not as the store, possibly as a portal to eBay and branding.Actually those came before eBay since the business idea was other and I liked what Jay and Ryanne do and gave me the idea to fund the business through eBay
Sea Shells
Wanted to bring this topic since December, I am so lazy, more that I was, not even email I am managing to write.
Anyway, I continue to find stuff in my house. One day I will get to my toy collection (actually already sold 2 of my Kinder Egg collections).
I have in my studio a corner in the music shelf with statues and other music related items I buy from places like N’Orleans.
At the very bottom I had two really large shells I collected with my family one in Cayman and the other in Grand Bahama.
One Sunday I saw them inadvertently and too some pictures and listed. Before the end of the Sunday they were sold by someone in Saudi Arabia, full price, priority international.
Also, in the description I had the origin description and how I collected them. 🙂
It seems this is a segment to explore
Hello Bonnie 🙂
I have very similar strategy on organizing folders. I have a domain and a handful of email address I use to administrate the store.
So I have folder per item number (eBay code).On the other hand I had a handful of cases where buyer asked me to ship to a different address: for example, a lady purchased a collector’s Harley Davidson vintage T Shirt (those made for/by a store located in a specific city). She lived like in Tennessee and asked me to ship to her boy friend in Texas. I even made a special package for that. Result: 5 stars for me.
There was one case in another country I was kinda afraid but it worked fine.I think I was lucky because all of these cases they used the own transaction to communicate with me officially.
Investment Diversification
First a curiosity: Ryanne mentioned that probably diversification comes from the stock market, so please let me add some curiosity about the topic:
Diversification is mentioned in the Bible, in the book of Ecclesiastes which was written in approximately 935 B.C.E.
But divide your investments among many places,
for you do not know what risks might lie ahead.Diversification is also mentioned in the Talmud. The formula given there is to split one’s assets into thirds: one third in business (buying and selling things), one third kept liquid (e.g. gold coins), and one third in land (real estate).
Diversification is mentioned in Shakespeare (Merchant of Venice):
My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate
Upon the fortune of this present year:
Therefore, my merchandise makes me not sad.The modern understanding of diversification dates back to the work of Harry Markowitz in the 1950.
🙂
Also, My line of thinking is similar to Jay’s: if you will do the same on two or more platform you are just wasting precious time.
Also, I agree that it’s potentially good strategy to sell specific category on expert sites (antiques and decorations on Etsy, Men’s ultra Fashion on Grailed, Women’s fashion on Posh, etc). If one is able to put similar dedication that Jay and Ryanne put, It is possible to maximize return by doing so.Does not work for me though.
About PayPal reversal Threats
I have yet to respond to Bonnie from California response to me but, in my experience, the 3 cases I mentioned I had the buyers stating never received or never authorized transaction, after the threatening messages they immediately opened transaction not authorized directly in their Credit Card, which reflects on PayPal.
My presumption is these cases all fall into the same type of “scam” (more people willing to take advantage than intentional Scam)
T-Satt,
Possibly this is just an example for the sake of the conversation.
Just to comment on your example, the “correct” gross profit margin varies for different types of businesses (I think when you talk gross profit you reference to EBITDA, right?)
To simplify the conversation let me use net profit, meaning the moneys you pocket after paying everything including taxes, debts, raw material, whatever cost you have to have the product sold.
For retail, unfortunately the margin is at the 2-3% level because of the Amazons and Walmart. But we are also retail not in the same category, possibly, and in average, we are in the specialty retail. We should aim to the 35%-40% net profit (I am sure it is possible, on average, an eBay store have that level of net profit since we can buy something for $10 and sell for $100 and, on average, after all expenses and taxes, still have that money to pocket).
Now I hear you in your example. I think you hit the nail on the head when you bring the hrs/labor to the discussion. This is often left out when folks are discussing models.
T-Satt,
I have over $200k invested today. Most in stocks and thematic funds.
At the end of the year it totaled around #135k.
I have investments from The Lending Club to Managed Accounts. On a day over day view, this is what I dedicate my time the most.
Please notice this is where I withdrawal from to pay property taxes and property insurance, and it continues to grow.Even though I am just a croach, the results are always positive and beating the market, imagine if you do dedicate more time and grow your expertise.
I “believe” in passive income. Possibly my concept is different. I call passive income for example you have a second property and, let’s say, all included, your gross $3000 each month and get net profit after tax of around $2000. The renters are there for 10 years and don’t even dream of leaving.
You have to do barely nothing, even have the automatic transfer to savings or other investment.We can draw several different scenarios, but you get the gist of my interpretation.
Also, cross dressing, oooops, cross listing (hehehehehe) for me has been a negative experience. There are 3 sites that synch with eBay, the others I tryed (Etsy and Grailed) are not bad if you really put into them. Grailed specially for men fashion apparel you make really big bucks, however the challenge for me was/is focus. Let’s assume it is possible to have Jay/Ryanne level of success on Etsy just for this conversation. I think you would have to dedicate same effort.
For me what it did was just take my focus away from eBay and, worse, several cases I forgot to remove items from eBay and had to cancel the sale after the fact.
Cheers
PH
Me too. Before that it was crazy, could not even believe the things I was selling. Really slow.
I have 2 years of data already, I am testing whether I have any predictable seasonality on the things I sell.
Toys R Us stores are closing nationwide. Buy to sell these items.
From:eBay
Sent:Apr-05-18 07:27Many Toys R Us stores are closing near you and offering deals on inventory popular with eBay buyers. Below is information about some of the top trending items available at many of these retail locations:
Friends, I received message above from eBay a while back. Follow a list of recommendations. We have 2 of those very close and many others around 30 from my house.
The thing is the “sale” price is horrible. The end price you would pay would never sell on eBay (generalizing because I focused only on items recommended by eBay and a handful of others I am sure I can sell).
Someone else tried this?
Business Policies
When Ryanne started to pound harder on the policies, I too decided to give it a grasp. The first step was painful, but so painful, but know is like Nerdvana.. Wow, it is really great.
Now I started to receive all messages that my Top Seller plus whatever whenever is in jeopardy. And I cannot understand why. The one time this happened they were very precise, pointing to my defect rate and which were the items that impacted that. Now I am in the dark, assuming this is the 30 days free returns thing.
This weekend they sent me another email to help me how to improve and get the stamp back after I lose it in June, they listed 39 items for me to change the price, like it was a mandatory thing and one specific item I had to adjust the policies (and it uses the standard policy of the shop: same day, 30 days returns, etc).
Even though for me these changes are exactly what Ryanne mentioned in the Cast today, the issue is when I get lost not knowing why.
Tax, Mint, Accountants, etc.
Folks, up until 2005 I used H&R Block for my (then) family/personal taxes. That year specifically they got me a bill of over $16,000 to pay, it was when I have up on them.
Afterwards I started to use Turbo Tax and it was just fantastic.The thing is, years later when I had opened 2 or 3 businesses, I hired 1800Accountants and they found me so many mistakes where I could be getting money back. In summary, it is worth every penny the ~$300 per year since what I get in return easily pays for the investment. Even though I have the entire Tax legislation and buy that humongous Tax book every year, does not compare with what these IRS-certified CPA know what and how to do it legally.
Today Mint, Quickbooks, Quicken, Turbotax are all the same company. For my personal finances I use Mint, and it connects EVERY FRIKKIN’ THING, any account (gas card account, all bills even local power and water companies here in FL, insurance, etc. etc, loans, blah blah blah including my sons’). It is fantastic first for personal/family planning (a month ago I mentioned how I loved MS Money and its discontinuation was like breaking up with the love of your life). Houses and Cars it keeps market value updated and you can compare with how much you paid and with whatever loan you make.
For the Quickbooks for my today’s 2 companies, even the e-assets (thing Bitcoin and Domain name) it keeps up to the market value x what I purchased or invested on).
I just love all of these
