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We do a lot of flat rate shipping on the clothing, which would all fit in the items you mentioned, so that would work as well.
Thanks guys. We will look for that when we ship tomorrow morning.
Much Appreciated!
06/19/2017 at 2:44 pm in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19615Yep. Like you said, the nice part about eBay is that you can work different models. And since you and Ryanne have a different personal situation, you run a different business model that fits your needs.
Veronica and I have two boys, both about to be in college, that play travel baseball, with a mortgage and a small home lot (compared to you guys). With the higher personal expenses than you guys (even though we are low compared to our neighbors), we have to manage the business different to fit our needs. I’m sure your monthly burn rate on personal expenses is about 25%-40% of what we run at, which allows flexibility. Though that comes with tougher sourcing in your area. Always puts and takes in life, and you do the most with the hand you are dealt.
06/19/2017 at 1:18 pm in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19594You are absolutely right. I’ve done some sourcing in rural areas like yours (I grew up in small rural areas of NM), and the material is very different. It is much lower value (as most of the economics in those areas are lower as well), but harder to sell and a longer hold time. You are doing it right by sticking low on the purchase side though, as that keeps your Invested Capital (the money you have invested in the business that will bring future economic value) low, even though you have 4.5 times the number of listed items that we have. That is good money management. I think you probably run at around a 8X-10X on your profit (receiving 8-10 times in Selling Price what you paid for in Purchasing Price), but your Sell Thru Rate is around 4%-5%, so you get the return, but it takes longer to get it. And it takes that larger inventory to generate the needed monthly sales. Having the large “free” storage at your houses makes that work. That is a solid working business model, and proven by the fact that you have done it for so long.
We can sometimes find those High Return items like you, but they are at Yard Sales, involves a fair amount of luck to be at the right one before another reseller gets there, and not as plentiful. Veronica builds on this side for the most part. Friday she did that, spending around $150 at a couple of sales, and should yield around $800+. But I live in the 4X urban world, buying at $5 what I can sell for $20, storage of 2,000 items is easy in one spare bedroom, and I sell the items in 120 days or less. It helps smooth out the nature of Veronica’s side.
We are a bit of a blend of you guys (Veronica) and Amazing Taste (me). And that works for us. And that is why I work the process and efficiency side so much on my side. I moved my side to 4-5 items per hour, and would like to get that to 8+ if possible without an employee. As of now, if I can list 4 items per hour, at a minimum $10 profit per item (after fees, shipping, etc), then I’m making $40 per hour. Not a bad gig. That is $80,000 per year in the “real world”…
06/19/2017 at 12:42 pm in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19591Mike, you rock! I will have to look into that as an option. The network piece has been my only holdup. I knew my Desktop would be the central database that my studio laptop and Veronica’s laptop would have to remote to, but getting the three linked up wireless has been my stumbling block. Tech is not my strong suit!
06/19/2017 at 12:25 pm in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19587Yeah…I gotta get on that!!!
Thanks Mike!
06/19/2017 at 12:24 pm in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19585It has happened. Not every week, but I run the business on the conservative side, making sure I have the most available at any one time. To keep feeding the beast at 100 items per week, we end up averaging around $5 purchase price per item (APP). That may be from Thrift Stores or Yard Sales or both, but I like to have both barrels full at any time.
To be clear though, we avoid Death Piles like the plague. We have gone 2 weeks before without ANY sourcing. If we have enough product to list for the week, we will skip spending the cash, list what we have until we are low again. That is the nice part about some of our sourcing on clothing. There are enough Thrift Stores that keep their prices reasonable that I can source during the week if I get low. There are some that are too high and I only source on 50% days.
06/19/2017 at 12:09 pm in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19578Agree Mike. We are not as aggressive as you on the expenses (we do 100% of the phone, but 50% of the internet charge. We do Apple TV as our main entertainment, so I couldn’t argue 100%), but yes, as a business, take every legitimate business expense you can. I don’t give tax advice, I don’t even pretend on the internet, so everyone consult a tax accountant, but there is a reason that the tax code is set up in favor of business owners. Running your own business is tough, we take the risks, and eventually, we hire employees. So take every advantage you are given!
And yes…I recognize those accounting terms!!! 🙂
PS – How do you like Mile IQ? What is the monthly charge and do you think it is worth it? Another item I’m looking into…
06/19/2017 at 11:53 am in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19575Thanks Mike. That is very helpful as well. I need to learn how to set up the home network through the WiFi router that I have. Once I get that done, that will make some other parts of our business easier as well.
I gotta get onto WL!
06/19/2017 at 11:40 am in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19571I’m behind in the numbers this week, as I was watching my oldest boy pitch on Saturday (great outing) and spent Fathers Day with my youngest son fishing in the mountains.
Regarding the first caller talking about how to allocate “paying yourself”. (Thanks Jay for the shout-out!) First, I always say that cash is King. Your entire business life blood is cash, as is EVERY business. Proper allocation of cash will make or break any business.
This is how we fund our lives through our full-time eBay business:
We are in the resale business, and we have to have large enough inventories to generate consistent sales and cash coming in. So we need to list every week, which means we have to buy every week. No list, no sale. So the first place that we have to fund with our revenues is enough cash to buy more inventory. For us and the inventory that we buy, we spend around $500 at the thrift stores, and we can spend another $500 at Yard Sales. So first things first, we always make sure that we have $500 in cash for Yard Sale money, and $500 in PayPal for Thrift Store purchases (we use PayPal debit card to also get 1% back).
The next item of importance is paying our eBay fees out of PayPal. So before I transfer any money from PayPal to our Business Checking account, I make sure to leave $500 for purchases plus the current balance that shows in eBay fees. I usually do one transfer from PayPal per week, unless sales are hot and I want to move the balance to cash quicker. I don’t like a high PayPal balance since they can freeze that at any time (happened to us about 1.5 years ago…not a fun week).
Next is Self Employment Taxes. I run the estimate for the year (as Jay mentions, I forecast our entire Business, line by line, for the current and future year), so I have a good idea of how much we will owe in taxes. I have a separate checking account that is for our self-employment taxes. I have a reminder in Quicken at the end of each month that says how much I need to transfer from the business operating account to the taxes account. That way when I pay the quarterly taxes, the money is already there. (I do this with lots of other non-monthly personal expenses such as Christmas Spending, Property Tax, Homeowners insurance, etc. Makes life SOOO much easier).
The rest is what we live on. We try to have all business costs run through PayPal first (shipping supplies, any cleaning or repairs, etc.) so that I know easily what the balance is in PayPal, what “floor” I need to cover upcoming eBay fees and purchases, and I transfer the rest. Then I keep in the business checking enough for yard sale purchases and for the business taxes, and then we can transfer the rest to our personal checking.
When you are growing the business, you are always behind on cash. You are buying more product and getting it listed than you are selling. We are still growing, so we are still behind the cash curve, which is why I made sure we had LOTS of cash in reserve to live while we grew. We are now just about at the point where the business is 100% supporting our bills, and will be there by Q4.
Growing and first starting a business, you never have enough cash, which is why you see people on Shark Tank, and why when you read about Elon Musk, Bill Gates, Steve Jobs, etc., how they lived like paupers while they grew the business. If they can live cheap to fund their dreams, we can do the same. That that is also why before we went full time, we built the business and the processes (Veronica was HUGE in laying that groundwork, I just brought the business and accounting side to it) and we saved up to handle the lean times.
There is another school of thought that is similar, called Profit First, based on a book by Mike Michalowicz that I would love to read. Sounds similar to what we do with the multiple buckets, but he sets aside extra buckets for profit and for paying yourself as well. That might be another way to go.
Hope that helps! If you have any other accounting questions, just let me know!
06/19/2017 at 10:43 am in reply to: Scavenger Life Episode 315: Okay, you’re making money. Now what? #19569Thanks to Mark S and Mike for the continued discussion on WonderLister. Good to hear from a new person (Mark S) on what his experience is using it.
I really need to get on the ball with giving it a try. I enjoy doing similar items in batches to stay efficient. I changed my process a month ago and that has me listing at 5 items per hour now (start with photo, use templates to create draft listings, edit photos, add to listing, price and list). I use a laptop computer in the studio to create the draft listings, then finish on my computer in my office. The only snafu with WonderLister would be that I would have to either network the two computers together, or change the process around.
Mark, keep letting us know how it is going. I’m going to be getting into the WL game soon as well!
06/14/2017 at 6:56 pm in reply to: Scavenger Life Episode 314: Selling on eBay while in the Military #19419We were on Lingo on the Game Show Network in 2007. It was a word game where you had to guess the word based on where the letters were in the word. Veronica was the sharp one, I just had to feed her good info and be the goofy guy while she guessed all the words. Won the game and $5,000. Had a shot at $19k, but we were not lucky enough. Had a blast though, got to meet Chuck Woolery and Shandi Finnessey, ex-Miss USA. Great memories!
06/14/2017 at 3:34 pm in reply to: Scavenger Life Episode 314: Selling on eBay while in the Military #19409Hey Mike. I’m guessing that tool is WonderLister, correct? Still on my list to get done…
The number of times to relist wouldn’t change the data. I use 30 days, so the 110 days to sell means it was listed 4 times (original and 3 relists).
06/14/2017 at 3:30 pm in reply to: Scavenger Life Episode 314: Selling on eBay while in the Military #19408Looks like by link broke on the days to sell pic. Let me try again.
Days to Sell06/14/2017 at 9:45 am in reply to: Scavenger Life Episode 314: Selling on eBay while in the Military #19390
I did a some excel work and calculated the days to sell by category for our sales for 2017 (would be interesting to look at a combined file with 2016 and 2015 as well). Was really good to see this number, and you can see I was wrong about the 90 days metric. More like 120-150, and we have an average of 166 days to sell.
It was even better to see numbers that show that my thinking was correct on why I went to clothing to smooth out the business. You can see that the clothing categories are much lower time to sell than the holiday and collectibles that we had before. That helps turn inventory and generate a baseline of cash flow more rapidly.
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