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FredsPremium, your numbers are very impressive. Especially given the amount of items in your store and being a one man band. How many items do you find that you need to list per day to hover around where you’ve been for the past few months? Also, do you list 7 days per week? Congrats on the great week.
As someone who has built businesses with employees, I can tell you first hand that 1099’ing an “employee” can get you into hot water if they are not truly a contractor. A contractor provides services for multiple businesses and they also have their own business. In Jay and Ryannes case, they have an employee and therefore they are going about it correctly.
Jay, I’m thinking along those very same lines and agree it takes going to more stores/sales but in the end, it is time better spent – in my opinion.
Fredspremium, I agree that the outlet sellers can make a profit, I’m merely saying that it’s a volume game and the margins have to support paying an employee or more to picture, measure, ship, etc… while also being able to cover payroll expenses, for that to work at any degree of scale. In most cases, I don’t see that happening. On lower margins, what happens is that the employee (or more) that you hire eats up any extra profit that you make and you make the same that you were or less. Can it be done? Absolutely.
Some sellers are perfectly fine working around the clock. Other sellers like to make more money selling less items so as to own more of their own time. That’s why most sellers start this type of business to begin with.
My average selling price over time isn’t accurate to clothing because I used to sell expensive hard goods. My average selling price over the last 10 years is around $70.00. When I began selling clothing, that dropped significantly and I’m in the process of trying to get to $30 per item as an ASP. I have an outlet within a half an hour of me, I’m just not interested in that business model. The average cost of quality merchandise in my area is around $6 an item. If the outlet people are happy with their current procedures, growth and time freedom, then I say more power to them, but there is more than one way to eat an oreo.
Been listening since episode 1, but first time poster. I wanted to chime in on the ongoing clothing conversation.
I agree with Jay, that the sellers who let their items go for low prices will inevitably either burnout or come to their senses. The new emergence of the “bins” stores have had a definite impact on the market but I don’t think it’s a game closer. For every seller that’s willing to let something go for $5 to $10, there are 3 more that get $30-$40 for that same item. Ronnie Hart is a prime example. Ronnie posted that he profited $69k (profit, not gross) for 2016 and took the summer off. He also admits that he rarely puts in over 40 hours a week. He could feasibly grow to $100k a year without killing himself in the process.
As Jay says, your eBay store is a pipeline. What we put into the pipeline and how we price what is in the pipeline defines what type we’re building. Are you building a business or a sweatshop? Doing some research on eBay, reveals that there are several clothing sellers with an average selling price of $30 and up. The sellers that are selling their inventory for super low prices are under a false assumption that they’re building a business. What they are building is a job. I could go get 2 or 3 jobs in my local community and work 100 hours each week. For what?
I think most of us are in this to build a business. Having owned multiple businesses in the past, I can tell you from experience, if your margins don’t support hiring, you aren’t building a business. Not that you have to hire helpers, but you want that option if so choose to do so down the road.
My plan for 2017 is going to be to dump my less sought after inventory at lower prices and move it out. I will then be more selective in what I purchase and buy clothing, shoes, etc.. that command higher prices. I’d love to hear others plans for building and scaling the clothing side of their businesses in 2017.
