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Amen Retro!
When it is on the lower end…Move the Merch!
Mike: Regarding your Google results, I look at it this way:
When I’m listing on eBay, do I want to maximize eBay’s Search Results, or Google’s?
For eBay, I want to maximize what eBay wants. For your Shopify store, maximize Google’s.
Jay: I don’t mean your eBay store looking like a hoarder. I mean your warehouse/storage area.
I don’t think you guys have really had this constraint because you haven’t had to pay for storage. But as a hypothetical question: What is too much inventory for you guys? Would you like to have a warehouse of 20,000 listings (all of the same type of items you have listed now)? 50,000? When would you feel that your store is too big?
07/09/2018 at 12:35 pm in reply to: Scavenger Life Episode 368: Is Our Business an eBay Hack? #44881PS – I like the new ending segment, think I will start to join in each week:
What did I cook this week? Sunday I canned 4 Quarts of Green Chile Stew and grilled Brown Sugar Balsamic Filet Mignon with Roasted Broccoli.
More canning to come. Gotta make room in the freezer!
07/09/2018 at 12:27 pm in reply to: Scavenger Life Episode 368: Is Our Business an eBay Hack? #44878Agree on the Templates. I used the heck out of them before using SixBit.
Prefill Item Specifics, Store Categories, Business Policies, Item Descriptions…
Very useful.
07/09/2018 at 12:24 pm in reply to: Scavenger Life Episode 368: Is Our Business an eBay Hack? #44877simplico: Is eBay continuing with Shippo in Canada? We were contacted by eBay that eBay was no longer supporting Shippo (for free) in the US, but ShipRush was going to still be free through eBay’s partnership. This is why we switched to ShipRush (and it is better than Shippo).
07/09/2018 at 12:22 pm in reply to: Scavenger Life Episode 368: Is Our Business an eBay Hack? #44875Yeah, I really feel that the best thing SixBit can do is to have an Implementation List of things to think about.
I could probably figure out your issue, as it messed with us too. There is a setting when you import from eBay to SixBit on what you want to do with the Custom Label field in eBay. You can have SixBit put that as the SKU or as the Inventory Location. You use that field like we do, it has the location.
The key is that the SKU in SixBit MUST be a unique number. No duplicates. For us, we had some issues because Veronica had some items that was one SKU on multiple listings (she paid one price, then just made multiple listings). That is a no-no in a database.
Yes, there is a bit of a database learning curve on SixBit (or WonderLister, or any similar software). When you go down that road again, let me know and I can help.
PS – you can ask for a remote session with a SixBit person. They will link into your computer and can see your issue, correct, and explain the solution and the cause. I have done this a ton, and it helps a LOT.
Back to a statement in the beginning…”You’d like to sell high-profit items quickly, and low profit items eventually” — I would disagree with that statement. I would rather that low profit items turn quickly. To me, the best is High Profit / High STR (obviously) and Low Profit / Low STR the worst. Between High Profit / Low STR and Low Profit / High STR… that is the rub.
This is where other factors are in play. There is a spectrum of sellers on eBay. I look at Jay and Ryanne on one end (10x ROI / 4% STR) and Cyndi AKA Amazing Taste (3-5x ROI / 90%+ STR) on the other. Like the Long Tail vs the Churn and Burn. I think we sit in the middle (5x ROI / 15% STR). The method of business has a lot of factors: Capital, availability and type of items, business goals, time to dedicate to listing.
“Right” is different for all these sellers.
Luftmentsh (et all): Ok, here is my overall thinking on the subjects in this thread…
I see where you are driving with PA/T and VA/QP. They are potential tools for identifying items that are “past expiration” in your initial thoughts when listing. Meaning they are getting old, taking up valuable space, and not generating revenue. “Time to reevaluate”.
As a process, I think this is important. Your formulas can do that. We do a look back each quarter, looking at the oldest items out there and deciding if they are still worth listing, need repricing/updating, or need to be donated. I think we culled 30 items last quarter. Our questions on these are “Would I buy this again today? Would I list this the same way today?”
I feel just because you bought it and listed it in the past doesn’t mean you would do it again today. And then…what do you do about it?
I say that it is easier to store cash than it is inventory. Now, you need inventory to provide consistent income. And for each of us, that is the biggest issue. I look at all these issues through the lens of someone who runs our store as a sole source of income. What is the best business decision that I can make? For us, turnover and cash flow are important. We want to continue to grow inventory, which always puts a strain on cash. Therefore, we need consistent cash flow to fund new purchases of inventory as well as for monthly bills.
So old inventory represents a cost to us each month. It isn’t generating income, it takes up space (so a cost for warehouse expense), etc. So, the longer it is sitting there taking up space, we are incurring Opportunity Cost on that investment. If I sell quick to recover our costs, I can redeploy that capital to a better investment.
Now, if I still think that the ROI on the item is worth sitting on, I sit. (this goes to the point that Luftmentsh formulas are getting at). But if not, cut bait. A large inventory isn’t necessarily a good or a bad thing. I think the key is how much profit is being generated compared to the capital invested, and there is a time factor to that investment.
If an outside investor was looking at our businesses, and wanted to loan us money for inventory, what would they look at? How fast they will recoup their initial investment, then what returns they would get for that investment. Some of us are high return, but slow to sell. Some are low return, but fast to sell. Some are in the middle.
To Jay’s point, there is only so far we can go to generate a sale. Just because we lower prices, or change titles, or edit the listing, doesn’t mean that it will DEFINITELY sell the item. But to Luftmentsh point (and ours), if the item isn’t being seen because of those issues, then it is really for sale?
This to me is the crux of the argument. Low STR isn’t always bad, and high STR isn’t always good. It is a measurement of your business. It tells you how fast things have been selling. In conjunction with ASP, it says how much revenue you are generating (and will likely generate in the future). They are data points, nothing else.
I think the true argument is: should you review old inventory? To the List It and Forget It camp…do you review your inventory to see if items should still be listed? If not, why not? Are you 100% certain that ALL items will sell the way you listed it 5 years ago? Just because item A sold that was 5 years old, doesn’t mean ALL items that are 5 years old will sell. How do we prevent our stores from looking like the hoarders we have purchased these items from?
We have been to sales where people have the most random dusty items, and they are all priced like they are made of gold. “That is worth a lot! I paid $x! It is a rare piece!” Yeah, and since it is overpriced, it is going to stay right in your garage. It isn’t really for sale. And just because it is old and you think it has value…does anyone else in the world believe that? If not, it sits in your garage (still) and isn’t going to bring you any value.
Not disparaging anyone with large stores, or that it is bad. In fact, for Jay and Ryanne (and almasty it looks like too) it works very well for them. I think it is just a good business decision to always review old items to see if they should still be in your store. If it was a bad buy, or needs repriced since the market has changed, or needs a better title since I’m better at that now…then make the change. I can’t assume that my decisions in the past are 100% correct in today’s market. If it is still a good investment, then leave it alone.
But having the review is always worthwhile.
almasty: “There seems to be a community of people on Ebay with nothing better to do than to correct you on certain aspects of your listings.”
Amen on that!
I do agree with some of your thinking here Jay, but I want to add some flavor to your numbers.
Yes, you profit $13 from a $7 investment (COGS, Listing Fees, and FVF). So a 200% Return.
But since it took 5 years, it is a 40% annual return.
Nothing to sneeze at, but much lower that what the $ return is. In your case, storage is not an extra cost, so I’m thinking you are pure here. But for many on the forum, storage does take money (and stress), so that is a factor. If someone is long tail, the returns on investment (on an annual basis) are lowered by time, and if warehousing costs are included, that will lower returns as well.
So I agree with your numbers and thought, but for those that don’t have a free warehouse solution, this is a factor in Long Tail. Many other thoughts on long tail as well, but I’m going to try and stay on track on this thread…
ebaymom: STR is just sales in a given period divided by the number of units in inventory.
You can do STR for a day/week/month…whatever. I think weekly is the shortest unit to use, and I calculate the weekly and monthly STR. But to be consistent, I always calculate in monthly terms.
For the month, just take the sales for the month / Inventory at the beginning of the month (to be 100% accurate, you should take the average inventory for the month, but I’m lazy and it doesn’t move the needle enough anyway).
For the week, I take the sales for the week / 7 * 30 / Inventory. This takes the rate of sales for the week and extrapolates it out to a month and then gets the %. This way, I can always see what my STR is (weekly or monthly) in similar terms.
Almasty: I use STR a lot in my numbers because it is one metric on our store. Velocity. But it is only ONE metric.
A store’s success is not boiled down to one number.
For me, STR HAS to be used in conjuction with ASP. If you slash prices by 50%, and sell twice as much…was that a success?
There are really two different ways to calculate Sell Thru Rate. You can go all in and calculate your % by taking your Weekly (or Monthly) Revenue $ divided by your Inventory Value. So $ to $.
The downside to this calculation is that it doesn’t tell you WHAT the driver was if your STR % goes up or down.
By Using STR in volume in conjunction with ASP, you can now break down your metrics by volume (STR) and price (ASP).
I’m just now going to go through this. I saw the thread when I headed out the door, just now got here and looks like I have some downtime before my reports are ready to analyze…
so imma gonna lookee now!
07/09/2018 at 10:21 am in reply to: Scavenger Life Episode 368: Is Our Business an eBay Hack? #44849Retro: Great job on the increased listings and your new process! Process matters…
PS – From a SixBit user, you can still use that same process with SixBit if you want. You can list the item directly through eBay and SixBit will automatically import that listing into SixBit. You may have to add some SixBit items to the listings if you want (Item Cost, Relisting Schedule, etc.) Veronica listed through eBay for many months before we got the home network set up (which SixBit did for us for free).
Just wanted to let you know that you can still have that Flexibility with SixBit.
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