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Week of 11/12-11/18
Total Items in Store: 1,669
Number of Items Listed: 98
Number of Items Sold: 120 (includes 4 Bonanza, 2 TruGether, 10 Etsy)
Weekly STR: 30%
Total Product Sales: $3,462
Cost of Items Sold: $804
Gross Profit for Week: $2,321
Highest Item Sold: $140 – NEW Model Trailways Concord Stagecoach Wood Model Kit
Competition: Highest Priced Sale: Veronica CRUSHED the week and Veronica leads for the year 26-19.Best. Week. Ever.
We had another Grand Slam Day on Tuesday (had a sale on all four platforms). Our expansion onto Etsy by leveraging SixBit has been solid as well, with 13 items sold since we started in late October. By using SixBit to have the info from our eBay listing, and just making the necessary changes to make the Etsy listing, it has made listing on Etsy efficient and profitable.
Our listing number took a little bit of a hit this week as I had to make an unexpected trip up to Missoula to pick up my dad and bring him down to Denver for a few weeks. 25 hours of driving in a 37 hour period…I feel like Bandit Darville…
We are dealing with some interesting shipping issues. We have a pair of Rock Revival Jeans that went to Saudi Arabia…but haven’t arrived. Tracking as stopped in Dammam since 10/24. We are most likely going to have to eat a refund, and I will just keep checking the tracking to see if they arrive.
Then we have a pair of Lucky Jeans that were shown as Delivered, but the buyer asked to have them sent to another address. He says that the original place refused the package and that they are supposed to be sent back to us. We will send on and bill him the second shipping charge if we get them. Tracking now shows as Forwarded, so we are watching it.
THEN, we have a pair of Rock Revival jeans that the tracking says “unable to deliver item, problem with address”. Buyer messaged us and we are on the lookout to see if they are returned so that we can verify the address and resend the jeans.
Very strange how they are all hitting now…but you know how things move in threes…
Going for the Adjacent Possible is always the best strategy. Just keep making the next improvement, the next goal, the next milestone, and suddenly you are running a good sized business.
When we did 30 day listings, we tried to cull out the bad stuff regularly. Now our plan will be that once a quarter, we will look at the oldest 10% of items to refine, reprice…or recycle.
So, I don’t see anything in what you are telling me that is an outside restriction for doing your forecast. I would continue to ramp up, and track your STR each week, and see what your trend is.
Just to be clear, my last set of percentages are my increases in sales dollars year over year. So I’m forecasting Q4 2017 to have 37% higher sales dollars compared to Q4 2016. So while my STR for Q4 2017 is 19% vs Q4 2016 of 20%, I’m slated to make 37% more in revenue. Lower rate, but on a higher inventory, so more revenue.
How I calculate STR…
Calculating STR is always easy, but comparing them is the challenge. I do everything using a monthly STR. So I’m looking at the rate of what 30 days worth of sales is compared to my inventory. When looking at the total units I sold for a month, just divide the total units sold for the month by the inventory in that month. (it should be the average inventory for the month, but I just use the beginning inventory for that month).
When looking at my week, I take the sales units for the week, divide by 7 days, then multiply by 30. That tells me how many units I would sell in a month if that week’s rate was for an entire month. Then I divide that by the inventory quantity at the beginning of the week.
For the quarter, I divide the quarter units sold by 3 (back to an average month, and divide by the average inventory for the quarter (here I took the average, since it can change by a lot over three months).
I always do this so that my rates are always in the same time frame (monthly). If my STR for the past month was 19%, but the last two weeks have been 18% and 17%, I know that I am trending down. If they were 4.5% and 4.25%, it is hard to quickly compare that to last month of 19%.
All my STRs are in units sold right now, since I like to see the STR and the ASP. The one downside after I thought more today about using $ STR is that if you are going down or up, you can’t tell if it is by volume or price. I’m an old cost accountant, so I am used to looking at what is a volume variance vs a price variance. So the more I think about it, using Unit STR and ASP lets me compare two different items over each time period. That way I can see if my improvement is via increased velocity or increased price.
Agree. Dollar wise, the increase is nice. Here is the increase on quarterly sales dollars for the last eight quarters. The increase is Year over Year (meaning Q1 2016 sales dollars compared to Q1 2015 sales dollars, Q2 vs Q2, etc.
Q1 2016 – 70% Increase
Q2 2016 – 39% Increase
Q3 2016 – 7% Increase
Q4 2016 – 9% Increase
Q1 2017 – 1% Increase
Q2 2017 – 31% Increase
Q3 2017 – 66% Increase
Q4 2017 – 37% Increase (using forecast for Nov & Dec)The growth is worth it, just plan on a degradation on STR, and keep an eye on if you drop waaaay too much. When we slowed in 2016, it made us look at listings, move dead inventory that were just bad buys (we held the items that still showed promise), and had us look at freshening up our old listings. We will be doing some more freshening during Thanksgiving and Christmas weeks (easier to freshen than list new, but still productive).
I agree. Your 10% per week would be 40% per month (which is very nice!) and would be closer to what we were when we were a smaller store (see my Q1 2015 numbers I posted).
As a placeholder, you can look at the slide we had the more we grew and forecast accordingly I don’t know if others that are tracking that and have some similar results they can share, but if we can get more people to post that, we can see if there are some trends that we can follow.
PS – One thing to look at is are you selling items that are vastly different or at a much lower price that would drive that increased velocity? Can you continue to find these items and keep that velocity up? And is that Average Selling Price one that you can live with for the work that growing your store would entail?
I always look at STR and ASP together. I can look at STR and increase it if I slash prices, but ASP suffers. Hence why I’m starting to also calculate STR on dollars, not items. Meaning I have started to calculate the STR on $ of sales as a percentage of $ of inventory listed. That is a more accurate calculation anyway, and encompasses ASP into the STR. There will still be degradation based on an increasing store, but it would remove any “games” I can play with pricing to show an increased STR. At the end of the day, STR is not what we are looking for…it is profit.
Agree. The concept of starting higher and then running sales has been on my mind, and a potential area for us to experiment with in 2018.
We aren’t strict pricing on a 4x model, it is just what we average. We research every item to price the market. With my clothing, I usually have a pretty good known price after research. But I have thought to start increasing my price to factor in a sales discount price and see if that speeds velocity.
You make the great point on the profit margins. Most Manufacturing companies run on 8-12% net profit. Grocery stores are 1-2% profit. But they do have demand. People will always eat…
We run a basic 4x model, buying at $5 to sell at $20 on average. We are beginning to look at if we deploy more capital, can we get a lower return (3x or 2x) but have a higher dollar return per hour worked.
Comes back to the 3 T’s…Time, Talent, & Treasure. Time is the only one you can’t get more of…
Not really. Whether Veronica’s or mine, we average $5 per item. Sometimes cheap, sometimes more, but we always seem to average $5 COGS.
Excellent analogy with the blacksmith and the fisherman. I absolutely love that!
Absolutely true as well. Between the two of us, Veronica is much more the fisherman, and I am closer to the blacksmith. Still true that in the strictest sense, we are at the mercy of what is for sale (something I am wanting to try and control better in the coming year), but it is much easier for me to find and sell items than it is for her, at least in this area. The farther away from large cities that we go though, it is much more the non-clothing items that we find which is her wheelhouse.
This is also the reason I went down this route. I do have some enjoyment for the clothing, but I also like that it is more available.
Maybe for us, we are both fisherman…but she and I are fishing different waters with different bait.
dearmila: Excellent post! I agree with the batch process, as I have found it to be much more efficient overall. When I started listing, I did one item all the way through, and it took FOREVER. Now, we use batches to be more efficient, as well as to not burn out.
For me, Monday is my prep day in the morning, steaming and cleaning items for the week, and I do any weekly admin work. I sometimes am able to list on Mondays, sometimes not and use the afternoon for jobs around the house. Tuesday through Thursday is hardcore listing, Friday is either listing or sourcing if it is yard sale time, Saturday is sourcing, Sunday is off.
I use a lot of batch process in my days as well. I do my daily admin work in the morning, then list 10-15 items (photo/measure/draft list, then photo edit, then price and submit). Hike and lunch, then do another batch in the afternoon.
I can also attest to what sonia said about the non-linear progression of your STR as your store grows. The larger your store is, the more long tail items you will have and it lowers your STR. For some basis on our store:
Q1 2015 Avg Inventory – 354; Avg STR – 41%
Q2 2015 Avg Inventory – 530; Avg STR – 26%
Q3 2015 Avg Inventory – 641; Avg STR – 23%
Q4 2015 Avg Inventory – 834; Avg STR – 26%
Q1 2016 Avg Inventory – 1086; Avg STR – 20%
Q2 2016 Avg Inventory – 1250; Avg STR – 14%
Q3 2016 Avg Inventory – 1266; Avg STR – 12%
Q4 2016 Avg Inventory – 1345; Avg STR – 20%
Q1 2017 Avg Inventory – 1372; Avg STR – 20%
Q2 2017 Avg Inventory – 1501; Avg STR – 20%
Q3 2017 Avg Inventory – 1627; Avg STR – 16%
Q4 2017 Avg Inventory – 1713; Avg STR – 19% (currently)When we started having the lower STR in Q2 & Q3 of 2016 was when we started to analyze our inventory and decide if we needed to purge out bad buys to keep the dead weight from dragging our numbers down.
I think you can keep in a more linear fashion if you are willing to consistently analyze your slow moving inventory and see if you made a bad buy and just need to remove, or accept that it will take some time and you want to hold on for the good price.
I still forecast our store with one STR for the entire store, but this non-linear function has been something I would like to forecast better by calculating an STR by type (clothing, collectibles, etc.). Since our store has seemed to stabilize, I don’t think it is worth my time (I would rather be quickly close enough than taking a long time to be dead on in my forecasting).
So, when you are running your numbers for the future, forecast a degradation in your STR. I always try to keep some storm clouds in my forecast and not just all sunny skies.
Retro, we made a recipe recently and thought of you. Easy to do, makes a lot, and very tasty.
We will tweak this going forward. We like a more hearty soup (more stuff, less liquid), so when we make this again we will double the corn, beans, and chicken. And we will quadruple the quinoa. We also add chipotle powder, cumin, and chile powder to taste.
This recipe made enough for 6-8, and if you double the other items, it will be even more.
Retro, shoot me an email at tsatterf@yahoo.com and I can send you a couple of my recipes. Most of mine make 4 quarts, but you can expand to make more.
I don’t know much about the insta pot, as we use a pressure cooker to can our meals when we make the large ones. We are of the old school crock pot crowd…I like the house smelling good all day…
I would say the best way to expand your pre-made items is when you make one meal, double to make two and stick one in the freezer or can it. That is how we expanded our freezers and basement full of food (and other items). When I make one bigger meal, I double and throw the rest in the freezer. When I need 1 item on the shopping list, buy 2 until I have a good backlog.
And to Jay’s point, most crock pot recipes are the same basics:
Take meat and add salt and pepper
Sear both sides, set in crock pot
saute garlic/onions/other veggies, add to crock pot
Add chicken/beef broth
spice to taste
cook on low for 4-6 hours (until done)90% of them are variations on a theme. My Ancho Chipotle venison stew I am trying tomorrow is just that…an experiment for a unique flavor. We have Green Chile Stew for New Mexican flavor, Bourguignon Stew (with red wine) for a high end flavor, Veronica’s Chili for hearty flavor, so I want one with chipotle and ancho for a smoky flavor.
I can send you mine, just need to clean out some things. Send me an email at tsatterf@yahoo.com and I can send it to you.
As we have now taught our boys. My youngest son is getting ready to get out on his own, and he told me “I just can’t see paying for food at the restaurant. It is just too expensive.” He works at a local mall, so he is really seeing the pricey stuff, but lesson still is there.
Don’t get me wrong, I love dining out on the rare occasion, but now it has to be something I can’t make myself…so I can steal new ideas…
