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06/22/2019 at 10:26 am in reply to: Answers on Finance, STR, and ROI to Mr Vintage Estate Liquidation from eBay #63876
@Simplico: At some point, that is a process to develop. For us, using SixBit, we can see all available inventory, when it was purchased, when listed, etc.
When we had the Easy Auction Tracker spreadsheet, we had the same thing. We had an inventory tab that we logged each purchase into, and when the item sold, it had a 0 for Available Inventory.
Either process works, and gives you a tool to research old items to see if you have bad pricing, need new descriptions, or if it is just a slow seller to hang on to.
06/22/2019 at 10:23 am in reply to: Answers on Finance, STR, and ROI to Mr Vintage Estate Liquidation from eBay #63874@Simplico: By Inventory Value, I am looking at just the average Inventory Value of all goods available for sale for the year.
So in the hypothetical example, 8,500 items for sale during the year (I assumed that the inventory amount would be flat all year, as I don’t know if their store is growing), so the Average Inventory Value would be $42,500 (8,500 @ $5 per item).
For us, we averaged 2,315 items in our store in 2018 at an average of $5.50 per item so our Average Inventory Value was $12,732.50.
By using this metric, you can see what your total investment cost and return is in your store. You have a total dollar amount wrapped up in inventory, and you can see what type of return you are getting on that investment of cash into your store.
06/21/2019 at 7:12 pm in reply to: Answers on Finance, STR, and ROI to Mr Vintage Estate Liquidation from eBay #63852@Jay: True, but time is the one thing that we all can’t afford to waste. If we spend time listing something that won’t sell, then that is time we can’t get back. We can learn from that so that we don’t make the mistake a second time, but we are still out our time.
Time is very expensive, as we cannot get more of it. If we lose money, we can always take on other work to get money back. If we lack skills, we can train and acquire those skills. But wasted time…there is no cure for that.
I get your main point and I agree, that for most folks, this isn’t an issue. But when you get large (over about 2,000 items) or you are going full time, trimming the dead stuff becomes more important.
Again, that just my opinion…I could be wrong…
06/21/2019 at 7:07 pm in reply to: Answers on Finance, STR, and ROI to Mr Vintage Estate Liquidation from eBay #63851@Simplico:
ROI on COGS in the Hypothetical would be this:
Annual Revenue: $93,600
COGS: $15,600
ROI: $93,600 / $15,600 = 6.0ROI on Inventory Value would be this:
Annual Revenue: $93,600
Inventory Value: $42,500
ROI: $93,600 / $42,500 = 2.2While the Revenue is the same, what you are considering that generated the revenue is different. If you want to get the return on just the COGS of the items that SOLD, then you are seeing the profitability of your purchasing.
But if you want to see the size of the store that it took to generate that annual revenue, then you use the ROI on the Inventory Value. This would be most important in stores that have a low STR. There has to be a lot more hooks in the water at any given time, since you never know when the right buyer will be looking.
06/21/2019 at 10:11 am in reply to: Answers on Finance, STR, and ROI to Mr Vintage Estate Liquidation from eBay #63826Thanks Mark. It was actually a good exercise to see what the ROI is based on the items that sell (in his example the store is a 6X) and then comparing the same level of Revenue to the total inventory. That drop from being a 6X to a 2X really shows the impact of Sell Thru Rate.
It made me look at our own numbers in the same fashion. So for our store, we had an annual STR for 2018 of 13% and an annual ROI of 257%. So, with about 25% of the inventory level of the hypothetical store, we had 4 times the STR and 74% higher ROI.
Even more interesting, our ROI on COGS was a bit lower (we average about a 5X store), but our ROI on Inventory was 8.24, almost 4 times as high as the hypothetical store. So with similar potential returns at time of purchase (we each buy at about $5, and at 6X the hypothetical store is selling at $30 and we average around $25), we have better financial returns because we sell so much faster.
It really shows the impact that STR has on a return of capital. This is why I still hold that if a store is going to have low STR, the ROI on purchase has to be 10X or more. This is why J&R can be successful with a low STR store…they are averaging at least 10X ROI on their purchasing. They invest a little money, are willing to wait for years to sell, and get a large payoff. This type of store works, but you have to be willing to be patient, be willing to have a large inventory (and manage that cost), and stay the course.
06/18/2019 at 6:16 pm in reply to: Scavenger Life Episode 415: Importance Of Being Honest As A Business Owner #63690FYI to @Mike and other SixBit users: So, changing your listings in SixBit from GTC to Custom Duration will run the math AUTOMATICALLY. After changing to Custom Duration (58 days), we soon dropped to about 700 active listings, as the remaining 2,500+ listings were older than 58 days, so SixBit ended them. SixBit has now been adding these items back to active (with Auto Relist) and are at 1,187 now.
So, be warned if you move your whole store to this that it will immediately end any listings older than what you select.
06/18/2019 at 4:58 pm in reply to: Scavenger Life Episode 415: Importance Of Being Honest As A Business Owner #63684Excellent article!
I realized this about 15 years ago. What got me to this point is irrelevant. The best decisions are what to do GOING FORWARD.
For resellers, I see people that won’t lower a price because they don’t want to “lose money”. The problem is that they paid too much to begin with. The right price is the market price, and the market don’t care what you paid for it.
Anytime I get a decision, I don’t care if I have to take a loss, as long as the path forward is the right path GOING FORWARD. What happened to get me in a mess is only academic (so I don’t repeat it). If I have to eat crap now because that is what will get me where I need to be going forward, then that is what I need to do.
06/18/2019 at 11:19 am in reply to: Scavenger Life Episode 415: Importance Of Being Honest As A Business Owner #63644@Mike (and any other SixBit user): I updated to the latest version of SixBit, and back in April they added the Custom Duration program, where you can set SixBit to end your listing after XX number of days and it will relist it for you.
We set ours for 58 days at this point, as that will stop the listing before it is stale. We will see if this will help. Clothing sales especially have seen a drop in STR, primarily over the last 2 weeks.
06/18/2019 at 9:04 am in reply to: Scavenger Life Episode 415: Importance Of Being Honest As A Business Owner #63639@Mike: Yeah, we use the “Force as New Listing” when we relist old items (about that time to do it again). I’m not sure why they can’t bake that into the Auto Relist, but I’ll trust the programmers on that one.
No problem on a phone call. I’m back in Colorado for about 10-14 days starting July 1. Got closing work on the contract accounting gig July 1-3, then Veronica’s birthday on July 4, then I better get some listings done… 🙂
06/17/2019 at 7:08 pm in reply to: Scavenger Life Episode 415: Importance Of Being Honest As A Business Owner #63618Happy Birthday Ryanne!
Thanks Retro.
06/17/2019 at 6:55 pm in reply to: Scavenger Life Episode 415: Importance Of Being Honest As A Business Owner #63615@Mike: Yeah, I talked with the SB team a few months ago, and they said that they planned to change the allocations to have a forced end and relist after a set number of days. Auto Relist for Ebay doesn’t make sense, so they plan to switch it to ending after a certain number of days, then relisting as new.
PS – The allocations on the eBay listing and the Etsy listing can be separate, so ending the listing on one platform won’t affect the other platform.
PSS – My laptop is not on Windows 10, but the desktop (where SixBit lives) and Veronica’s laptop are.
Thanks Mike. Much appreciated. No, not easy, but keeping busy and moving forward!
Thanks Jay, I appreciate it. Just talked to Veronica and she is doing well and handling it solo just fine. I married well above my station. We have a long history of strong and amazing women in our family, and she is carrying on that tradition.
My mom is doing well, probably going back to work on Wednesday. We should have the ranch stuff handled by then where I can run stuff by myself here while she is at work. We are basically there now, but there are just some other items she wants to get behind here before she goes back to the office.
Thanks Doubly, much appreciated. The one good thing is that on a place like this, there are always things that need to get done to make you move forward. The downtime yesterday was both a good break and a bit tough with time to think, but that is needed as well.
Today it is time to keep working!
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