Edit: I’ve modified my goal to be an “Online Re-Selling Profits Goal” for reasons explained in this post. Let’s just saying buying a house changes things!
When co-workers ask me what I did on the weekend, and I say “I went to a lot of garage sales/thrift stores,” they give me a “oh, you’re one of them” kind of look. I’m guessing they envision their Great Aunt Bertha who has tons of shelves with little cat ornaments all over.
Well, this post here will hopefully prove them wrong… unless I can re-sell some of those cat ornament. I’d totally buy ’em then!
I plan on crushing my 2013 sales and fully funding my Roth IRA in 2014 using only money from my side gig, re-selling on eBay and Amazon.
The Roth Goal
The maximum contribution to a Roth IRA for 2014 is $5,500 (you are allowed to invest $5,500 total into a combination of your roth/regular IRA accounts). That’s all well and good, but for me, that means I need net $5,500 profit.
This is a pretty tall order compared to my 2013 sales. Last year, I spent $1,266.13 on purchasing inventory and made $1,577.96 in profit. To make the numbers easy, we’ll just say that for every $X I purchase, that will lead to $X in profits. I’m going to need to purchase $5,500 of inventory this year!
To be honest, purchasing $5,500 worth of inventory doesn’t seem that daunting to me. It’s the LISTING of those items that scares me!
What is a Roth IRA anyways?
A Roth IRA is a convenient type of investment account. It lets you put income that’s already been taxed into all types of investments. These investments can be in the form of mutual funds, individual stocks, bonds, or money market accounts.
The important thing to note is that all growth on the Roth account is tax free. The hitch is that you can’t begin to withdraw any of that tax free growth until you’re 59 1/2.
Please take my description with a grain of salt! If you’re interested in more than just my brief, layman’s overview, check out some of the experts like Bogleheads, JL Collins NH , or J. Money for some more in depth discussion.
Path(s) to Profits
I’m going to be modifying my business model a bit from last year. As I alluded to earlier, $5,500 in purchasing means listing $5,500 worth of items. Just as a hint, I average about $2 for each purchase. That means that I’ll be listing just shy of 3,000 items!!
My biggest way of streamlining these listings will be using Amazon for most new items. Here’s a quick comparison between eBay and Amazon for listing an item:
- Take a bunch of pictures
- Research completed listings (quality of previous sales, sell through rates, find keywords, etc.)
- Add in all detailed category information
- Describe the condition (unless it’s new)
- Fill in description part of the listing
- Figure out all the shipping nuances
- Decide if it’s Buy It Now or Auction, what price you should sell it at/start it at/best offer?
- Review your post – you know there’s an error in there somewhere!
- List it
- Type (or scan if you have a bar code scanner) the UPC into your inventory management
- Describe its condition (unless it’s new)
- Click the “sell at lowest price” (I’m in it to get my money quickly – those with extra space can afford to store it a little longer and work with higher prices)
- Fill in quantity
- List it
Amazon is a LOT easier to list. No pictures, no crazy searching, no keywords. Just a UPC, sometimes a description, and then boom, it’s listed! The caveat is that it’s harder to adequately describe any items that aren’t brand new and wrapped in plastic. This is why I try to stick mostly to new items with a bar code on Amazon. It’s much quicker, although I’ll sometimes double list items on both Amazon and eBay if it’s easily described (think video games).
Either way, I just started to list on Amazon towards the end of last year. It gets you out to a larger audience, and I feel like their search engine hits are higher. On top of that, according to industry insiders like Skip McGrath (his free newsletters are a must for info on the online re-selling industry), Amazon is on its way up while eBay is stuck in a rut. Fees seem a little bit higher on Amazon, but they also give you a shipping credit, so it’s hard to see which is better in the long run. To me, as long as it’s selling, I’m happy!
Tracking the Roth IRA Goal
To track this lofty Roth IRA goal, I’m installing a nice little (OK, I know it sucks and a 4th grader could probably make a better design, but I’m learning here! Give me a break!) thermometer on my pages sidebar on the right. Hopefully, we’ll see this baby keep on growing throughout the 2014 year.
With that, I’d really appreciate it if you follow along through 2014 as I try to reach my Roth IRA goal and give my readers some of the ins and outs of the whole process. On top of that, you might learn a little about some items to look out for when you’re out on the hunt!
$5,500 profit in 12 months. Go big or go home!