Buy low, sell high :: 6/31
Good morning, friends. It's Monday! Um, Yay?! :)
My tip of the day for this Monday is this: Buy low, sell high.
That might seem pretty obvious but if you're considering buying to resell, it's something you should spend a little time thinking about before you go out and start shopping.
My favorite scenario, and one I always keep in mind when I'm shopping, is that ideally I want to sell the item I just bought for around 10x what I paid for it. What?? Does that sound crazy? Maybe a little but you know what? I often hit that mark because I try to be selective about what I buy.
Remember...our time is valuable! I normally have so many things I could be doing that when I set aside time to sell on eBay (and pay someone to watch my child while I do), I want that time to really benefit our family.
When I'm shopping for resale, I don't normally spend more than $4.29 (the going rate at our Goodwills) for most of these brands I listed the other day. If I can imagine listing the item for $39.99 (around 10x the cost) then I will consider purchasing it. If I know I could only list it for $20, I will probably pass.
At a $40 price point I will end up making about $30 profit (before taxes) on that item after my initial cost and ebay & paypal fees. That is great! I love making $30 for about 15 minutes (or less) of my time.
If I were to have paid $4.29 for an item that then sold for $20 I would only end up making around $13 for that same amount of time. It's still not a bad return on my minutes but I am trying to work smarter and not harder because I do not have that much time to devote to working.
Now, all of that being said, I have to tell you that this is my IDEAL situation. My goal that I have for myself. Does every sale hit that goal? No way. But I think it really helps me to have that rule of thumb in my head as I shop. It keeps me on point and (sometimes) stops me from buying something just because it's "really cute!" :)
Also, setting that bar high also means that I can feel okay with a sale even when it sells at that $20 price point. If I sell 4 items that I "only" make a $13 (before taxes) profit on, then it's like I'm making $54/hour. NOT BAD. It's like setting myself up to be happy even when an item doesn't sell the way I wanted it to. Win, win.
(of course, sometimes that darn ___________ still won't sell! Even when it's $10! and that is annoying. :) )
Another way to increase your profit margin is to buy REALLY LOW and I will go into that a bit more tomorrow.
Before I go I'd like to share a stellar example of how my plan worked for me over the weekend.
I was at Goodwill last Thursday and spotted a gorgeous orange sweater. It had kind of a strange looking label (ala Anthro)
so I looked it up on my ebay app (more about this on Wednesday!) and saw that it was from Anthro! A few similar sweaters had sold for around $30-$40 and a few for around $70. The sweater in front of my was $5.99, higher than what I normally pay, so I had to think about it for a few minutes. In the end the sweater was in such beautiful condition that I decided to go for it.
I listed that sweater yesterday afternoon and it sold within a couple of hours for $59.99. (10x what I paid...) SA-WEET. Now I did offer "free" shipping on this item so I will make $5.35 less profit but with a sale like this, I am fine with that and I will still clear just over $40 for my time.
Again, please leave any comments, questions, or experiences of your own that you'd like to share. I'd love to hear them!
See all the Nester's 31 Days participants HERE!