Activity theory (Auctions vs Fixed Pricing)

Let's embellish something.  I read a statistic the other day about auctions hitting higher in search rankings than fixed listings.  Assume 1000 listings pull up and 100 were auctions and 900 were fixed.  And, 64 or something of the top 100 were auctions while the other 36 were fixed.  This means auctions carry a higher percentage of the top 100 and were over-represented based on pure numbers.  (I figure some of this gobblegook has to do with both new listing and ending soon bonuses, but whatevs.)

I also saw a video blog of a seller than lists auctions first and moves them to store after they don't sell.  But, she lists HIGH on the first auction shot.  She does this because she saw this over-representation, too.  And, because she swears it drives traffic to her store and keeps her numbers up.

Hmmmmmm.  Of course, this gets me thinking.

Why not list an auction, at YOUR price, and see if you can't flip a few things in a week?  So, I tried it today. I usually just dump things directly in the store with a Best Offer on them to cover my range of acceptance.  For example, a $25 shirt may have an offer on it for $20.  I don't care what it sells for in that range.

The auctions I put out there today were on some bigger ticket items, too.  I started the auction price at what I would typically put as my low offer acceptance.  If I felt it may work, I placed a Buy-It-Now on for what my original asking price would be.

This allows me to offer free shipping on auctions.  It also means since eBay dropped it's tiered auction pricing (where everyone used to fear going over the 9.99 mark) I can ask pretty much whatever I want.  I only need one bid......I don't need a war to start to get MY price.  However, the listing fees were higher.  In some cases, double.  I felt that's ok for the sake of experimentation, but don't know how I feel about it long-term.

The shirts I put out there were Hawaiians.  I put out two Reyn Spooners, a couple cheapies, and two Tommy Bahamas (one NWT).  These "should" get some attention at the least.  I'll be interested to see if a few of them sell.  If so, this will be one seriously quick way to get paid for some great thrift store finds.

Make Today Count!
Chip

Reality Check..

That's right....I'm talking to you.  It's time to get off your ass and list that old stuff you have been overlooking because you don't like it.  Those things that aren't in your "niche."  Those things that aren't exciting to you.  Those things that sit in that corner and just mock you while you play with the toys you love.

Yes, I'm talking to you.  It's time to practice self-discipline and get your space in order.  It's time to rethink your organizational system.  It's time to rethink your shipping and storage process.  It's time to reclaim your house so company can come over once again.

Yes, I'm talking to you.  It's time to get off Facebook and list those things that are piling up.  It's time to take pictures of things even if your kids are screaming in the background.  It's time to get that stuff online before another Christmas passes you by without you giving it your best effort.  It's time to stop shopping for more until you get everything listed online.....SO YOU CAN SELL IT!

Yes, I'm talking to you.  It's time to get your receipts in order for tax time.  It's time to categorize things NOW so you don't have to spend time away from doing what you love later.  It's time to see where your profit margins actually lie instead of misleading yourself into thinking you are headed to Paris in first class seats next month.

Yes, I'm talking to you.  It's simply time to get real.

If you don't you know from experience you will regret it.  You will continue procrastinating and putting it off. You will keep accumulating things until you are on an episode of Hoarders.  Or, you will keep piling up receipts until the IRS knocks on your door for an audit.  This is a business.  It's not 3rd grade recess where we push the cute girl down or kick the kickball over the monkey bars.  It's real life!

Nobody said this would be easy.  If it was easy, and we could do what we wanted to all the time, everyone would be doing it, too.  You chose this life because you didn't want average and ordinary.  You didn't want what all the other "normal" people let themselves get trapped into.  You chose this because you are different!  You are special!  You are an amazing brain of untapped potential that just thinks differently than the rest.  However, the way you reward yourself is to stay on top of things.

Yes, I'm talking to you.  Don't take your foot off the gas because you are a little tired.  This is how it all starts to unravel.  You already know this.  I'm not sharing anything prophetic with you.  I am writing this letter to you to motivate you and inspire you to keep going.  No one ever got their dreams by sitting in a lawn chair with a beer.  And, they didn't stop until it was painfully obvious they were already there.

This can be you........if you only stay disciplined.  So, let's DO IT TODAY!!

(For those of you kind enough to read this, thank you.  Now, even though this may have been intended for me, myself, and I......I beg of you to go to your mirror and read it to yourself.  And, watch yourself take off! It's never too late to get a grip on yourself.  So, don't sit down........go!)

Make Today Count!
Chip

Flip vs Buy and Hold.....some math

This is the constant question poking in my brain.  I don't think anyone short of Alan Greenspan could get the answer correct.....and he likely can't.  

It's the question that forms the very bedrock of your business model.  Do I charge less and burn that inventory out (aka WalMart), or do I charge more and make more profit for less work while risking holding onto an item for awhile and having to store it (aka Tiffany's jewelry)?  Which one makes more sense for me?

I'm a geek when it comes to breaking down things to their simplest form.  It helps me understand things.  Granted, nothing is black and white.  There are always shades of gray.........about 50 to be exact, right?

Well, I've finally put some rough work into the details.  Let's assume (yes, I'm about to make an ass out of you and me) that we have an average profit of $10 if we can unload an item in a month.  And, let's assume we will make $25 in profit if that same item is priced higher and doesn't sell for an average of 4 months.  Which is better?

I buy my shirts for $3, but let's use $5 for ease.  If I sell that first shirt for a $10 profit, I can now buy 2 shirts.  Provided I get them listed quickly, that next month I should make $10 on 2 shirts, or $20.  Now, flip it again and it's $40.  Again, and it's $80.  So, 4 months later, I have netted $150 in profit, right?  Seems like a no-brainer vs letting the item sit for $25.  After all, $150 beats $25 hands down.

Oops.  Look a little deeper.  What is your time worth to you?  It will take significantly longer to pack and ship 1+2+4+8 items (15 items total).  To make the same $150 the 15 shirts made me, I only need to sell 6 shirts at $25.  All I need to do is build my inventory up while I sit around waiting.  If it takes me an average of a half hour to source, list, pack, and ship each item (random time here, but worth knowing about yourself someday), that's 7.5 hrs for the 15 items vs only 3 hrs for the 6 items.  Translate that to an hourly wage, and we have $20/hr for the $10 profit model vs $50/hr for the $25 model.  Assuming 40 hours/week is all you want/can work, we have an income of $800/wk vs $2000/wk.

Look, I'm being overly simplistic here, but one person can only work so much.  There's only so much time in a day.  The difference here is working hard vs working smart.  The only trick is:  Are you buying items that can net you both $10 or $25 depending on how long you choose to wait?

I guess that's a topic for another blog post.....

Make Today Count!
Chip

Monday Results Update..8/19/13

Another horrid August weekend draws to a close.  For the second Sunday in a row, I sold nothing....zip.....zilch......nada.  But, I should disclose I sold 3 things on Saturday so all was not lost.

I have jumped back on the listing horse, though, and things are starting to pick up.  I seem to be selling some of my very old stuff.  It's interesting to watch things sell that I had all but given up on and was just waiting for them to come up for relisting again so I could move them to auction and just dump them.

Look out!  What I'm getting ready to show you is going to blow your mind with how rich I'm going to get....lol.

Bought for $2 and sold for.......
Dilbert Tie

Bought for $1.50 on an experiment to see if the brand sells....it doesn't....
Cremieux Polo

I know those are links and not pictures.  But, to save space on my computer, I toss my pics shortly after an item is listed.  If these links die, I'm sorry, but I have no other way to show you just a pic.

As for results, this month I have sold 35 items for a gross number of $598.  Margins are down because I'm purging old inventory by lowering prices to drive them out the door and recoup the cash.  But, even if my margins are 50%, that's a car payment for some.  I'll get back up there soon now that I'm listing again.  So, no worries.

As for today, I spent the morning at a few thrift stores and posted a video on YouTube here.  Feel free to check it out.  It's about 7 minutes long and I break down my profit expectations on paper at the end.  I also listed 7 things and redid my notes I take before I list items and my condition rating.  Remember, simpler is better.....as long as you get your point across.  I am really working on this concept right now, and I will blog about it when I have settled on a system I like going forward.   Happy Tuesday, and as always...

Make Today Count!
Chip