[T-Satt]

Nope. She would have (and has) done exactly what you did!

[T-Satt]

Ok, a ton of math would go into all of that, but let me run through some of my numbers.

We are looking at a part time person to start, doing photography and some basic listing info (measurements, condition, etc.). I have a Listing Sheet that I created a year or so ago that we have used in the past, when I would do photos and fill out a listing sheet with pertinent data, and then Veronica or I would do the listing later.

For 16 hours of work per week, at $12/hr, doing 6 listings per hour (very doable) that would add 12 hours of work to Veronica and I per week (doing the listings, pricing and submitting). That would increase our profit by $19k for the first year (from a base of no employee).

If we swap the hours (meaning that we do the same amount of work per week, but we replace doing listings all the way through with some work of just doing listings from the sheets they provide), our profit increases by $9k for the year from the baseline.

If we hire a second person @ $12/hr to just list, and that is an addition to our normal listing work, our profit increases by $8k for the year from the baseline. This could also work if the same person does the 16 hours of photography and then adds 12 hours of listing (one solid person for 28 hours per week)

So all in all, at a reasonable efficiency rate, we are net profitable in all scenarios.

Full time is a different ballgame. Now you are increasing your cost, and requiring a substantial amount of additional sourcing work (to keep them busy) and shipping work (assuming an increase in sales volume), but at $35k per year, you will need a serious level of output to make it worth it.

As a What-If, a full time person at $16/hr for 40 hrs per week (48 weeks, my model is still basic at this level), doing 4 listings per hour of work (better than my 3 since they don’t source, but only 4 as some of their work is prep and ship), costs $35k per year and is an increase in profit of $13k over the baseline.

So it will come down to what you want. Increase in profit…or freedom of time? I can keep it profitable, but you will have to measure to make sure that it works. Plus you have to factor that to make it profitable, you are increasing your volume, which increases your shipping time. Veronica and I have our shipments at an average of 5 minutes per item. I do shirts/pants/jeans in 1-2 minutes, but Veronica’s hard goods take a lot longer. If you are doing mostly hard goods, you need to figure out how much of that extra cost is going to shipping, but that task does not increase your listings per week (and hence your revenue).

This is why I use my spreadsheet do do dynamic modeling. The extra labor piece that I have bolted on still needs work, but based on my Kentucky Windage, it is pretty solid so far.

[T-Satt]

Amen brother.

[T-Satt]

Doublythumbs: You can send all those ornaments to Veronica when you find them. She LOVES listing those!!!

[T-Satt]

We live on the “white meat”…

When I want to transfer money from PayPal, I calculate:

1) Current eBay fees at that time (from Seller Hub)
2) Add $100 for SixBit Subscription
3) Add $500 for Inventory Purchases

And I move over the remainder.

I always want my bills covered first, and money to buy inventory is part of that. If I have to eat less that week, so be it. Cash flow for the business comes first.

[T-Satt]

I agree on the profit per hour calc. I never do that on a weekly basis, because the time I spent that week is not related to the sales that week. A few items may sell in the current week, but it is definitely the vast minority. Putting on my Accounting Geek hat, technically all the hours you put into your listed inventory should be part of the value of your items until they sell. That is the Fully Absorbed cost of your inventory: The cost of the materials as well as the cost of the labor to make them available to sale (and getting really technical, adding an OH cost as well). No one does that in this line of work, and not even an Accounting Geek and Spreadsheet nerd like me really feels like calculating that each month.

I have done studies of our processes in the past to get an accurate measure of how many items I can get done in 1 hour beginning to end (shopped to shipped). And in my forecasting tool, I forecast on the lowest level possible (I like to win on the upside). I know that on the low end, from shopping to shipped, I can do 3 items per hour.

I also know that in my profit per item numbers, the lowest ever average that I have had is $10 per item, we are well above that now, but I still like to forecast using $10 per hour. It helps factor in unknown issues and it is a nice round number.

Using that, I know that at the lowest, I’m making $30/hour all-in. Realistically, I think the number is closer to $40-45.

The interesting part is now that we are forecasting for a new employee, we are carving back into the numbers to get an accurate picture of the profit per hour we can expect based on their productivity, given (low) assumptions on their initial output. And we grow from there and make them more efficient, and tweak the process. And we see how to focus our hours on the highest value tasks.

[T-Satt]

It was this week’s show, #707. There are 9 parts to that show. Listen to Segment 6…

[T-Satt]

ITunes was how I heard it. Most recent episode…

[T-Satt]

I agree on all points. Hopefully Premium and Anchor stores would get the tools as part of the package for that store subscription. That would be worth having.

And anything that saves time. I love spreadsheets anyway, so I’m sure I would still tinker, but getting access to the data would be huge…

[T-Satt]

One of them called in…not sure which. I can’t keep straight who had which store!

[T-Satt]

I just heard your story on eBay Radio. I laughed when you started telling the story!

Scavenger Life made me feel like an insider!

[T-Satt]

Thanks for the info. The concept of Blockchain is very intriguing, and it’s uses going forward in currency, smart contracts, etc. could become mainstream in a decade or so.

Veronica and I watched a documentary on Bitcoin on Netflix (Banking on Bitcoin I think) that was interesting. The more I read and see, the more it starts to make sense how the reliability will be gained by users. That is the key.

Whether Bitcoin makes it or not, it is the underlying theory and execution that I want to learn more about.

[T-Satt]

It will be part of my numbers every week.

[T-Satt]

Solid ASP Geoff! Nicely done!

[T-Satt]

I was just thinking the same thing! Wow!

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