I have a lofty, forward-looking goal – work from home by re-selling on eBay (and a little on Amazon). I would go to thrift stores, garage sales, be the cool kid at the auction, and party it up with people at flea markets (just kidding, they’re a different bunch).
So the big question is:
Can I work from home by just selling on eBay?
Answers: Not yet!
In 2013, I had just over $1,500 in profits from re-selling on eBay and Amazon. I set a lofty goal of $5,500 in profits for 2014 – a ~350% increase!
Here’s the breakdown of my 2014 eBay/Amazon results:
|Total Sales (Sales + Shipping – Returns)||$12,810.76|
|Mileage (just started tracking this)||$39.20|
89% of my target of $5,500 – short by just $613.01. Damn, that’s pretty close! But this isn’t horse-shoes or hand grenades. So should close even count?
This is cash in my pocket that helps me sleep at night. My family is saving for our hot water heater, furnace, and HVAC replacements using only money from online re-selling. I believe the profits could be even higher if this type of work was my full-time job!
Where did I go wrong?
The biggest expense for me was new inventory. The “issue” is I have almost two 8′ x 3′ shelves full of inventory still waiting to be listed. That’s a huge amount of material that’s not listed, and as we all know if it’s not listed then it’s not making you money. There’s a gray area between hoarder and eBay re-seller. I’m worried that I’m a little too close to the hoarder side of things.
Most of the other categories are going to increase with sales, so they’re something that’s unavoidable. If I grew my store enough, I would also upgrade to the next level eBay store, incurring higher fees, but paying less overall per listing.
Plan of Action for 2015
I’m going to kill two birds (goals) with one stone.
Bird # 1: Make $10,000 in profits in 2015.
Let’s hit Bird # 1 with some back of the envelope calculations using my 2014 numbers.
Gross sales – $12,810.76
Net Profit – $4,886.99
Number Items Sold – 416
Profit per sale – $11.75
Required sales assuming similar profit/sale – 851
That’s ~3x more in sales compared to 2014. I don’t think that’s going to happen. The way I’m going to hit this sale target is again twofold (I’m still not at Bird # 2 from above, but we’ll get there, I promise).
A – Profit per sale – increase my average sold price. Only making $10 an item is great for a few items, but it’s not scalable. I’d love it to be over $20 per item. As a point of reference, I’d only need to sell 500 items to make $10,000 in profits if my margin was still $20. That’s only slightly higher than 2014’s items’ sold. This makes my goal more manageable.
As 2014 has progressed, I’ve been more selective (edit in Rule one of my eBay FAQ) in what I’ve been buying. I have strict rules that I will only accept a lower margin if it will sell on Amazon (due to ease of listing), but otherwise, I want $20 to be the minimum. One more caveat is where I can make one listing for a large quantity. If I’m making $10+, then I’d be OK with that.
B – LIST MORE OFTEN. I’ve been targeting 5 listings a week in 2014. This is not enough. To get to 851, I’d have to list almost 17 items a week. I’m going to start off with 15 as a nice target, and we’ll see how that goes. I’d rather list less but have higher profits.
Note: I am talking about listings. If I have an item that has multiple quantities, I’ll still only count it as one listing. This way I’ll hopefully be higher than my target of 15 items per week in reality.
Now, onto Bird # 2 – Blog readership. I’m not going to go crazy aiming for viral marketing campaigns or anything like that. Right now, if I sustain my current pace, I’ll make enough money from the blog to cover costs, and I’m OK with that. I’m not utilizing the most important part of this blog. I’m talking about something that will allow me to grow my business to the next level, and that is
If it’s not measured, you’re going to be a big fat loser. -Someone
I’m going to use you guys, my readers, to hold myself accountable! I’ve already created a weekly blog post topic list, and I’m out through March. I’m going to have 1 post a month where I will update on my profits with the same table as above. I’m going to really scrutinize the data instead of randomly posting it every few months.
The other tool which I’ll be using is a goal tracking software… with teeth (stingers?)
The idea behind Beeminder is that you set goals and then track their completion. Sounds simple, right?
The kicker: If you don’t keep up the rate that’s needed to hit your end goal, then you get whacked. First time, there’s no impact. Next time though, you have to pay them $5. You slip off the road again? BAM Now you pay $10, then $30, then $90, etc. This goes up on an exponential curve. It really makes you want to complete your tasks though. Of course you can lie, but then, what’s the point? I want this goal, and hopefully Beeminder will help keep me on track when I’m not really feeling it. It will even let me plan ahead when I have a vacation coming up. I’ll start using this rate in the new year and will hopefully have a nice little tracker in the side-bar.
The neatest part about Beeminder is the automation process. It takes a bit of work, but I automated Beeminder to count my new listings through Gmail and Zapier (a program that gets web apps to talk to other web apps). When I have a new listing, I receive my confirmation e-mail from eBay/Amazon. This triggers Zapier to add a listing towards my Beeminder Goal. Next step will be to automate my weekly blog post goal too!
So there you have it. I’ve set my goal of $10,000 in profits for 2015! Let’s do this! Who knows, maybe I’ll work from home in a few years if this takes off. If not, then I’m still in better shape financially than just sitting on my butt and watching TV!