Growth Strategy By The Numbers and Goals - September, 2021

I have been wanting to do a Blog post on my overall strategy on approaching eBay and growing a new business. Remember, this is somewhat new to me and most of my approach is defined from my general street skills, pragmatic approach and some general research. 

There was a fundamental mid-term goal which was to generate on a weekly basis, enough income to support the business, pay normal bills like mortgage, utilities, etc., reinvest a bit. I am still in the growing phase and about 50% towards the general goal and expect I will achieve it sometime early to mid 2022.

I don’t know if my strategy is good, bad or average and same as what everyone else is doing. There was some research early on about the basics of eBay selling and “tips and tricks” which you might gather out of this, but some is just me and a few ideas that align to my objectives.

When I started selling with a few of my old comic books and other items, I would track the average item price and work with that. Then when I started buying more valuable items, I set a target average selling price of $20 or more (which I have already well exceeded). My initial plan was to generate an average $250 a day in sales and sustain that - but later adjusted up to $400 to cover selling fees and core costs. So from this, you can guess I would need about 14 listings to sell per day at an average $20 sale price (or fewer with a higher average, etc.). So, doing the math and I find I sell 10 items a day at an average of $10 per listing and I have 1000 listings, then I can project out to know how many listings I would need, so 2000 listings will generate about $200 daily at average $10 per item (and $400 daily at $20 per item average, etc.), which is pretty much holding true as I approach 2000 listings, actually a little better because my average item price keeps increasing.

So I have set a goal of having 3000 quality listings by mid-2021 and that should get me pretty close. Let’s say my average item sale is $20 (very conservative) and I can sell 20 items per day (again, very conservative).  This gets me to about $400 average per day, which is roughly my target. Take away 40% for shipping and cost of goods and that generally gives me a net of $250 or so. Exactly where I want to be.  My average item price will most likely cap somewhere around $30-$50 is my guess, and expect I would have trouble getting inventory to support an ongoing higher average listing price.

The fact is that daily sales are not stable and even the other posts about this day or that day being an ideal day to sell is not very consistent in most areas. I actually find that sales are best on Thursday and Friday and long weekends are usually the best (July 4th weekend was awesome and Labor Day was even better). I also see that sales will generally line up with normal pay periods, around the 1st of month, 15th of month and on each Friday, with the 1st of the month typically where my higher dollar items sell. For these reasons, I don’t worry too much about daily sales anymore, but more focused on weekly and monthly sales metrics.

A revised projections for sales now based on a weekly basis and is $3000/week. Then you take 50% for shipping and cost of goods and that puts me at about $1500/week net. Mind you I have to pay for storage and supplies and such, but some of that is built into a handling fee for the supplies and storage is only about $200/month. My costs of goods continues to go down as I build relationships with estate sales business and Zabrina and I improve our picking skills and learnings…point being, its only improving. 

Remember, I only do Buy-it-Now listings for the most part, so Auctions may have a different and more predicable pattern…not interested in going there, I find the BIN approach is more predicable, buyers seem to like it because they don’t have to wait for the auction to end, and I always offer some reasonable good offer levels on 99% of the items (hint to potential buyers, always make an offer with me, if it goes through…I will almost always accept it…but not 100% of the time!). 

So, my goal is: 

• Have 3000 quality listings with average item price exceeding $20. Once I have achieved this, I can slow my re-investment down and hours I am spending at picking, and pick fewer, but better items.
• Continue to increase my average item sale price and get it to $40-$50, this will only add to the profits. Finding that with estate sales, items which can sell in that area often can be acquired for $10 to $15 or so (often less).

Now, my challenge. The more I list, the more I sell and the net additional listings are slowing down because my sales are increasing as well. There will be a real limit on how much we can pick to keep increasing the listings, so at some point a two-person picking team can only get so much merchandise in a weekend. I haven’t figured this challenge out yet. For these reasons, I am actually trying to slow things down right now and for the best items, not being too aggressive on the pricing but not overpricing either. This is helping some, but not a lot and the fact is, I can’t move to zero sales from a financial perspective. There is also a “brand” reason for some listings which I will price at market or maybe a little higher, those listings are highly unique and best represent the brand we am trying to build…so for me, they have value just being present…my thought anyway and it makes me happy to do that. The best way to probably handle this is to continue to increase my average selling price and pick fewer items…that’s where I will start moving to for now.

One issue I have solved was the storage. Once we hit about 1500 listings, I found that working your inventory out of the house (and attic, and bedroom, and living room, and craft room, and dinning room) was no longer practical and therefore had to move the inventory into a climate controlled storage unit. This is working well and able to do that on a limited budget of $200 (now $350 or so) for a 10x20 unit. I still keep the signed books and more valuable items in the house. Recently I turned one of our spare rooms into and office as well and no longer work off the dining room table (mostly)…this has greatly helped with the relationship with the better half.

Anyway, so this is the basic building blocks of my approach to building an eBay business. Admittedly, some of it is hogwash and just the way I want to do things, but not surprisingly, all of this is actually panning out pretty much to the numbers (even better in reality).

A recent picture of the storage unit, now well past 75% capacity.

John