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06/06/2017 at 12:09 pm in reply to: Scavenger Life Episode 313: What’s your Backup Plan to eBay? #19071
We don’t do much Retail Arbitrage, unless you want to consider Thrift Stores as Retail. 100% of our items are from Yard Sales and Thrift Stores. Although we are starting to look more into Online Arbitrage (eBay, Craigslist, Facebook, Offer Up, etc.).
My wife and I run different types of items. She is mainly collectibles, and I am men’s clothing. She has started to do Jeans (men’s and women’s), and that has been a nice pick up for us. Clothing has a higher Sell Thru, but also a tougher market and less margin (we average more of a 4x on Clothing). On our volume, about 65% is clothing, the rest is collectibles.
06/06/2017 at 9:42 am in reply to: Scavenger Life Episode 313: What’s your Backup Plan to eBay? #19063Love those plans! I love the concept of house hacking like you have with the duplex!
Veronica and I are looking forward to getting in the game. We have about 1 year left with our youngest in high school, and then we plan to move to another area where we can take the equity in our current house, purchase our new house outright, with enough land to have a large garden, some animals, and plenty of storage for eBay inventory, studio, etc. Some of the places we have looked at would give is excess equity to start in 2-3 rentals. We have even started exploring Laundromats, storage buildings, and some RV parks for other sources of income.
The future will be exciting!
06/06/2017 at 9:36 am in reply to: Scavenger Life Episode 313: What’s your Backup Plan to eBay? #19061Back up plans are always in order. As the rule goes…”two is one, and one is none”.
And I agree, things have only improved, I just always like to think about what could change and then what I would do to adjust. What are the risks to our business, and how should we manage those risks? Optimist in Thought…Pessimist in Planning.
The good news is that we are in the arbitrage business. And there will ALWAYS be arbitrage. Whether it is flipping shoes, collectibles, houses, or stocks, the game is the same. How can you find value where others don’t, and is there a business there? Scavenging is the same…you see what others don’t. I love that I have learned to identify more edible plants in the wild. They see weeds, I see salad. Locally, some see a waste for $40 per year for a community garden plot, I see $200+ of vegetables for a year at 80% off (and the water is free!).
The key is in the seeing…
06/06/2017 at 12:34 am in reply to: Scavenger Life Episode 313: What’s your Backup Plan to eBay? #19040Week of 5/28-6/03
Total Items in Store: 1,531
Items Sold: 84
Number of Items Listed This Week: 100
Total Sales: $2,251.24
Cost of Items Sold: $389.52
Highest Item Sold: $85 – Brunello Cucinelli Italian Corduroy Pants
Competition: Highest Priced Items: Troy wins (finally!), while Veronica leads for the year 13-8.
Competition: Highest Total Sales: Troy leads the year $18.0k to $13.6kMay 2017
Items Listed: 319
Items Sold: 295
Total Sales: $8,238.63, up 27% Year over Year, 5th Highest Month ever
Sell Thru Rate: 20%Sales were up again this week, while our listing activity is back at goal level. Getting challenging to keep up at least 100 listings this week, with me having some contract accounting work again for a couple of days, and getting ready for our own yard sale on Saturday. Looking to move some of our larger eBay items at the yard sale, especially ones that have been around for a while. Taking Ryanne’s advice…”Get this off my shelf…”
More challenges on the eBay SCAN sheet. Three times in the past week, we have had issues. The last two is that the Bulk Shipping Tool skips over our Priority packages. So, anyone that uses a third party shipping platform that produces the SCAN sheet, I would love to hear your advice.
Regarding your Back-Up plan discussion, our plans are like yours, moving to rental property. But I constantly think about that type of stuff even at the smaller level. I constantly think about how to put ourselves out of business. What if we can’t find product at yard sales? What if thrift stores get too pricey? What if eBay blows up if they pass Internet Sales Tax legislation? I always try to think of Plan B, Plan C, Plan D. That way when you are in a situation, you have thought about some plans already. Even better if you pivot before the crises.
06/04/2017 at 12:05 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18952Glad you are reporting in for the first time! I have enjoyed doing it now (we just started reporting recently as well), as it is a nice motivation to make sure you are looking at your numbers, analyzing them, and making improvements on your business. If you don’t measure it, you can’t improve it.
I will give you answers based on what we do. Others may do things differently based on their business and process.
1) For Gross Sales, I include everything in revenue, so the Sales Price of the item and the Shipping Price Paid by the customer. Some items are free shipping, so we only have the one number anyway. And like you, we separate out Shipping Revenue from the Sales Revenue, but in the end, we also want to at least cover our costs of shipping and some packaging costs as well. We look at it this way: If the customer was willing to pay it to us…it is revenue to the business. The IRS looks at it that way, so we do as well.
2) Our week is Sunday through Monday. There is a slight caveat to that, as we only report PAID and SHIPPED. I don’t consider it a sale unless they pay. Also, our accounting process (the Easy Auction Tracker spreadsheet) only pulls in sales when the item is shipped. So we either do some shipping on Sunday (to get the sales through Saturday) or I wait until we ship on Monday to get our final count of sales through Sunday. Just easier to do on our end that way. I track sales by day as well for my own purposes, to get good data on daily average sales vs inventory value, sell through rate, sales average by weekday, month, etc., and the EAT file is used for that, so I just piggyback the weekly reporting on top of that.
3) For your Net, you have the big stuff. I track two numbers. First, Gross Margin. That is Sales Revenue (no Shipping Revenue) minus COGS. I like to see what return we are getting on just the products we sell. We look to have at least a 4x return (or said another way, we sell for $20 what we paid $5 for). We have a lot of clothing, so the returns are tighter. I would guess Jay and Ryanne are closer to 10x on their items, but Jay would have to talk to that piece. For Gross Margin, you could also calculate it as Total Revenue (Sales Revenue + Shipping Revenue) minus COGS & Shipping Cost. Should get you to roughly the same number if you charge for shipping (your profit on shipping should be small as compared to profit on the product itself). If you were mostly Free Shipping, I would only do Sales Revenue minus COGS.
I also track Net Profit, and that is the total bottom line. So all Revenue less all Expenses. Those expenses include the big ones you discussed, COGS, Shipping, and Fees, but I also pull out packaging we buy (bubble wrap, poly mailers, etc.), Internet Access, Labor (when we pay our boys to help), Business Meals (when we eat when shopping, or have a business lunch were we specifically talk about strategy for the future of the business), Mobile Phone, Product cleaning (if I take a suit to the cleaners to get clean), Supplies (cleaning products, paper, labels, tape, printer cartridges, etc.). Make sure you are looking at every legitimate business expense you have. Consult IRS.gov or a tax accountant.
4) For Average Sales Price, I use just the product cost, because I forecast the Shipping Revenue separate from the item.
Your Father is right about that…good sales cures all. However, remember that it masks problems in your process as well. I always look to get better (list faster, source quicker and cheaper, increase revenue per item or per hour, reduce OH costs, etc.) so that if things are tough, I have as lean of a process as possible to weather that storm.
Hope that helps. If you have any questions, let me know.
05/31/2017 at 3:27 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18835Yep!
05/30/2017 at 9:37 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18809Swapping out the gallery photo is one of the things we do to tend the garden (I take 3-4 potential gallery photos for each item). I know that eBay sees the gallery as part of what is “unique”. Once when we were experimenting with Sell Similar instead of relist, I had two listings that were identical except for the gallery shot. I know that eBay flags duplicate listings immediately, so that told me that when they look for uniqueness, the gallery photo is part of that.
05/30/2017 at 9:19 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18808Thanks. As a team, Veronica and I are very complementary: She loves the unique items and the creative side, I love the volume and the business side. I love “keeping score” of our business, and by doing so, we make the business better.
Yep, different ways of running the business, and they can work in different ways. We tried GTC once, and our sales tanked, and when we went back to 30 days and tended the garden, our sales picked back up.
I hear you on some of the others that are REALLY working hard, like Amazing Taste. I like to follow other sellers that I know, both competitors here in our market as well as others that I find online (like Amazing, Rockstar Flipper, Prof Sales, etc.). I learn a lot from what they do, what they sell, and how they do it. Amazing has (based on my calcs), an 80+% sell thru rate. Insane! I have someone here in Denver that is over 100% sell thru every week.
We are trying to work that balance of total grind, and new things. We have thought about a blog on our way of doing things (so variation on you guys, Prof Sales, etc.) so that we have a new area to learn from. In about a year, our youngest son will be in college, and that will free up some time to take on new tasks. We are of the mind to NEVER stop learning, always do new things. We learned to make our own wine, expanded our garden knowledge, new recipes, etc. I even have been learning to identify edible plants that grow wild around here, and have a “scrounger garden” on one side of the house that I keep wild for free food. Some may think they are weeds, but we are getting free food (I don’t even water it) from Mallow, Purslane, Lambs Quarters, etc.
And funny enough…one of our next areas is rental property ourselves. We plan to be in that game sometime next year. We see that we will stay in this game for quite a while, but we know that when we get to 60 (a long time off!!!), we will want a business that is much more hands off, or at least easier to manage without a TON of grind work like eBay is. I laughed a ton when you started talking about your rental property (I found you in 2014 and went back and listened to every podcast…my boys can recognize your voices). I was like “Yep! We are planning the same path!”
05/30/2017 at 8:25 am in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18763I have a spreadsheet forecasting model that I use to forecast the current and one future year (so right now, 2017 & 2018). I use the inventory we have, forecasted listings, and sell thru rate to predict # of sales. As of now, assuming 100 listings per week, sales will outpace listings in Q4 2017 and Q1 2018. Listings will out pace sales in Q2 & Q3 of 2018, and sales outpace again in Q4. For 2017, I’m predicting 4,523 new listings, and 3,720 sales. For 2018 that gap closes, with 4,800 listings, and 4,566 sales.
I use the past 2 years sell thru rate (by month) to help predict the number of sales. If those rates continue, I think the model is accurate. If we see changes, we adapt. We are always looking at items that don’t sell, or sell well, to make sure we are putting out there items that people want to buy. When we started, we could sell Boeri ski helmets and kids Kamik & Sorel boots for good profit. Now we don’t touch them as either the purchase price is too high, or the sales prices and profit are too low. So we always adapt.
Does the updating the listing work? I really think so. When we relist our unsolds, I look at how many views the item had in the 30 days to gauge if the listing is working. If something had a lot of views, I don’t change much, and get it back out there. If it had less than 20 (just my own line), I spend more time changing the listing title, description, looking at price, etc. I can tell you from experience that there are a lot of times something will have less than 10 views, I work over the listing, and either it sells the next month, or at least the views are 20+ to 30+. That Cassini engine knows when you have tended the garden. Will that work for you guys? Maybe on your clothing and bread and butter items more than your collectibles. Only way to see is to try, and I think that experiment is for a year, to remove seasonality and get a good universe of the before & after affect.
I think that we can get our listings up to 125 per week with some new tweaks in how we list and finding more efficiency in our process. Once we are as efficient as possible everywhere…then we think about either an employee, or looking for the same number of items, but that bring more profit per item. For example, I track our ASP (Average Selling Price) and AP (Average Profit) in all the categories that we sell in. I have a much higher AP in Suits, Sport Coats, and Jackets than I do for Shirts. But, it takes a few minutes longer for each listing, requires more storage space, they are longer tail items so the sell thru is lower, they are much more seasonal (Fall & Winter sales) and harder to find regularly. So we can change the business to make it grow, but we have to fund that somehow as well.
Cash for new inventory is always my first item in the budget each month. Before I pull money from PayPal, I make sure that we have the current eBay fees and the next week’s forecasted purchases at thrift stores in PayPal first, and just take out the top. So if our eBay fees are at $1000, and we want to spend $500 at the thrift store (normal), I only take out the money above $1500. I also make sure that we have enough cash on hand for yard sale purchases as well each week. Cash is the life blood of the business, so we take care of that first…and we tighten our personal belt if we have to. Business cash is king.
I know that your model has a higher ROI than ours. I think you guys are around an average 10x on your purchase price. We are closer to 4x, so cash for inventory is more important. Also why I forecast that in our model as well. I track our average purchase price, and when I change the number of listings for each month, it changes then amount of cash needed to fund those listings as well.
05/30/2017 at 7:42 am in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18761You probably don’t have to go to that level. Talk to a tax accountant first, and they can provide some solutions.
05/29/2017 at 11:12 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18752Veronica started the business in 2004, and I started listing in 2013, and that is when we moved to the Premium store. We made this a full time business in 2015, and have not looked back.
We set a goal of 100 listings per week, and with some tweaking in the process, we keep getting closer. With that level of new listings, I think we will outpace sales until September through December (that is what my forecasting model is showing).
To be where I want to be, we really need to get to 150 listings per week. Or, 100 higher Profit listings per week. We have a review of our numbers each week, and had this very conversation today. Grow the volume…or the ASP? Love to do both, as long as the higher ASP has a reasonable sell through. Cash flow is always king…
05/29/2017 at 5:24 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18736Week of 5/21-5/27
Total Items in Store: 1,494
Items Sold: 63
Number of Items Listed This Week: 88
Total Sales: $1,953.16
Cost of Items Sold: $423.42
Highest Item Sold: $65 – Fly Racing MAVERIK Motorcycle Boots
Competition: Highest Priced Items: Veronica wins (again!) expanding her lead for the year 13-7.
Competition: Highest Total Sales: Troy leads the year $16.9k to $13.1kSales bounced back up this week, being closer to the recent average. We increased our listing activity closer to normal for the week, and the “Feed the Beast” proves true…the more we list…the more we sell.
Yard sales were great this past week, and I was able to do well in the thrift stores. We are going to hit a large community sale this Friday, and I will hit the thrift stores on Saturday, and we should be set up in a backlog of unlisted items to take next weekend off. We are also getting a backlog on Fall/Winter clothes that we are going to sit on until August while we list everyday items. If we get low on anything, we will have these items ready in draft or scheduled listings, and then list in August.
Regarding eBay removing listings that are over 1 year old…It will be interesting if we get any notices on our items. We are in the 30 day camp, and we touch up any unsold listings (change out the gallery photo, touch up the item specifics and item description, checking pricing, etc.), but we have listings that are over year old since we originally listed them.
I can tell you from experience that when we have listings that have low number of views in the past 30 days, when we spend time on changing the listing, we get more views the next week. That is part of the reason that we do 30 day listings, so that we can see how our listings are doing and what is working (and what is not). It is like fishing…if we see we aren’t getting nibbles (views), it is time to change the bait!
05/29/2017 at 4:46 pm in reply to: Scavenger Life Episode 312: Is eBay Removing Old listings? #18733I am with you. I like to get up early (4:30-5:00), spend 30 minutes in my morning routine, and then go straight to listing. Nothing better than living the old Army slogan…”We do more before 9am than most people do all day.”
I’m a morning person, so mornings are my magic time to tackle the biggest item of the day…
It has happened to us before as well. I agree with Paulo. Send a message and contact the buyer on what the reason was and proceed accordingly.
Obsessions that make money…good call!
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