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Welcome! How long have you been doing this full time?
Welcome Captain Whakencracker (I also love that handle!)!
Love that you are interested in jumping in full time. How close is your monthly net profit to what you are making at your current job?
Jay: I think for us, we would do it, and our net profit per item would be the same.
We already do Same Day Handling and Free Returns. We can do Free Shipping (just adding the cost in to the purchase price). If we have to go to Priority rather than First Class, the increase of FVF to 20% makes the net profit the same.
We already always ship shoes, jeans, suits, and a some hard goods via Priority. Doing ALL hard goods via Priority (vs FedEx) could get pricey for buyers.
Anyway, looking at First Class vs Priority:
First Class
Sales Price (Including Shipping) – $24
Shipping Cost -$4
FVF (9%) – $2.16
FVF Discount (10%) – ($.22)
COGS – $2.70
Net Profit – $15.36Priority
Sales Price (Including Shipping) – $26.90
Shipping Cost -$6.90
FVF (9%) – $2.42
FVF Discount (20%) – ($.48)
COGS – $2.70
Net Profit – $15.36PS – Our FVF are usually 9%, then 3% for PayPal fees.
The real question would be if there is an increase in sales velocity when selling through eBay Plus, and how our return rate is affected. So far, Free Returns hasn’t impacted us at all, so if that stays constant, I would assume an increase in sales velocity through this program.
If buyers are paying for this service, and they can filter their search results to sellers that are part of eBay Plus, then that keeps us in front of as many buyers as possible.
It would be worth it for us to experiment with it.
Mark: Totally agree, especially with what Dave Ramsey said. I think a good target is 70%. When your side job is 70% of your full time job, then it is a good time to jump in.
Good luck! I’m pulling for you!
Great point!
Almasty: Completely agree. We have seen some degradation in our STR as we have grown, and it appears that it is due to more long tail items in the mix. We are also looking to remove or blow out the really old stuff (bad buys) so that they are no longer in the warehouse, taking up space, taking relist fees, and just generally in the way.
Something I am watching…
Rob: I think on the clothing it will depend on Men’s vs Women’s. It seems that most clothing resellers that have a high return rate are heavy on Women’s clothes. We are mostly Men’s (Women’s is primarily jeans and shoes), and we are still below 2% returns with Free Returns (1.82% as of right now).
In the last 60 days, we have had 11 returns:
Clothing – 6 (All Men’s, 5 “Doesn’t Fit”, 1 “Found Better Price”)
Shoes – 3 (2 Men’s, 1 Women’s, all “Doesn’t Fit)
Hard Goods – 2, Both Arrived Damaged (1 claim filed with USPS, 1 was GSP so we already are covered).I think the key there is that eBay doesn’t punish, but the buyers can. They can filter on Free Shipping, Free Returns, and Guaranteed Delivery. For every filter you don’t fit in, you lose potential sales.
For some items this doesn’t matter, for some it does. It is the buyers who will do the filtering, and eBay provides the tools to do so.
Anytime Mark. And it is always good to think like you are. Ironic that your goal is a 10x inventory level where you are now. Something I have heard a lot (and I do try to do) is to imagine what it would take to grow by 10x. How would you do that? How would you source, list, ship, do admin work, store, etc? It is a great exercise on what it takes to go REALLY big, how you can do it, what you would do. It stretches your mind in ways the day-to-day grind doesn’t.
PS – On the inventory, try cycle counts. Instead of doing it ALL at once, mark off your inventory area into 12 sections. Then count one section each month. Or divide into 52 sections, and count one each week. You still count every area once per year, but not as daunting.
PSS – And on your comment about plans…Amen. And plans are great, but execution is everything. The best part about Veronica is she is great on execution. I can do the plans…I was paid to do them! But sometimes taking that first step is tough. She is great at starting without the need for a plan. We work well together… π
Mark: Sounds feasible, but I would have some things to cover off:
1a) At 20,000 listings, you have some serious issues to deal with. First is tight inventory control. You can’t have unlisted items, and you REALLY can’t have listed items that can’t be found. You need to have an Inventory Nazi (my title at old places I worked as I was OCD on Steroids about the system being accurate with what was on the floor).
1b) You also have to ensure that your shipping personnel can quickly find each item. And when something is put away, it is in the right location, and it doesn’t move unless you move it in the system.
1c) You also have a risk of obsolescence. At a low STR and high inventory, you have items listed that were purchased years ago. Make sure it is still in good condition when it sells (climate control, covered and protected) as well as something that people still want. What sells today may not sell tomorrow. That is the biggest risk of high inventory with low STR.
1d) Solid backup system (I think you are on WonderLister). Make sure it can handle the data, including photos, if something goes wrong. You don’t want to have to redo 20,000 listings. Plus making sure your relisting, refunding, etc. is handled.
2) You may find it tough to find employees to fit the bill. Not always easy to find people that want to work only 20 hours a week. And then having them not work at all for 2 months of the year may make it hard to keep them around. I would consider a contract basis where they take the items with them to work on. This works great for our photographer, who has his own studio. We do a “drop” twice a week, where he drops of the photos and items he took from the last batch, and picks up items for the next batch. I have thought to do this with listing as well (Lister picks up the items from us, does the listing, drops off to photographer, then photographer drops back to us).
All things that can be handled, and I’m sure you have thought this out. Just the things that come to mind for me when I think of that level of inventory and that type of business.
PS – If you lived closer, I would manage it for you. π
MyCottage: “itβs up to each of us to figure out whether or not free returns is a good choice for us, as individual sellers. That answer will vary among us.”
Amen to that…
I can second that issue. I hate that when buyers do want to return an item, eBay makes it difficult for them to navigate the process. I almost wish the buyer would contact me and I could do the return on my end for them.
Just make a happy customer when they are unhappy with the item. That keeps them coming back!
Nope. He is usually pretty tight lipped on details until formally announced. I just like to listen for any new directions coming…
Yep. That is what I like about this forum: diversity of strategy and situation.
If we were all doing the same thing the same way and talking about it…well there isn’t much to learn. But part-time, full-time, long tail, churn and burn, collectibles, records, clothes, shoes, free returns, no returns, free shipping, charge shipping…
In all of that is what works for each person. We choose and implement what works for us…
Jay: For 5 weeks, yes, I could do that. I have a backlog now of Suits and Sport Coats since I’m losing 2 days a week at the other job.
But the search is do be able to go beyond just the hike. The hike is bringing it forward, but I would ultimately like to have a process for sourcing that I can make purchases faster, as well as being able to do this from any location. If we move to a rural location, where the sourcing isn’t as simple, it would be good to have a pipeline that could be sent to us.
Yes, your situation is different. You are working at a 10X model and a 4% STR. Low cost of inventory, but requires a large amount of inventory (7,000+) to get your sales amount. You have a lower burn rate with no mortgage and no kids. For us, we have much less space unless we pay for it (doing that now with one storage unit), and with a mortgage and 2 kids, we need to have the cash flow coming in quicker. So we run at a 5X model with a 13%-15% STR.
So ultimately, it isn’t just the hike to cover…it is a model that requires less time for the same cash, and is more location independent.
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