August was a beast, with a huge amount of different things going on.
Overall profit was down more than 30% on the previous month mainly I think heavily due to my lack of getting listing done. I actually made comment on this in the July summary so it is my own fault, 100% evidenced by a huge drop in the number of sales.
Feed the beast or you will starve yourself it seems.
Between some early withdrawals to the bank account, some (much) higher inventory spending later in the month and new subcontractor costs my actual cash flow for the month appears negative.
Still not to worry, I suppose it’s a little bit like spending upfront now to prepare for a big push in the 4th quarter towards Christmas.
To combat this from happening again in September I have resolved to commit to some consistent listing. Indeed in the last day of August and first two days of September I have already added another 50 quality listings adding over $2000 total value. Did this translate into an immediate uptake in sales? Nope.
It doesn’t matter though, my aim for this month is to average 10 new listings per day. I have plenty of listings with photos and measurements ready to go so there should be no issue here.
Facebook below was pretty quiet for the most part. Etsy has been dead, hence why I haven’t included it. That said I haven’t used it to list either.
“No Buy” August was a nonevent, there was just too many good deals around that I couldn’t pass up and I ended up spending the most I have in several months.
I’m not even going to bother with “No Buy” September. With a baby on the way due in December I’m figuring that I’m going to have less and less time to source over the next few months and then immediately after the baby is born I will be taking a long break from sourcing to focus on the family.
The idea is to have a stash of inventory that I’ll be able to list periodically during this time to keep things active. That said I will still keep a close eye on cash flow and reign back in the spending on inventory to a better level.
Sourcing Missions For August
I had a couple of notable sourcing finds for August:
I went out on a Saturday morning to an op shop that I’ve recently rediscovered which had a lot more to it with some rooms out the back that I never knew existed. Anyway this day was very wet and windy. When the ladies arrived to the shop they decided after 5 minutes to close it due to the forecast impending storm. This meant I only had a couple of minutes to look around which I made the most of by picking up a sealed 3-D puzzle.
I got talking to the lady in charge and she asked me what I was looking for and I replied with PlayStation or Wii games as a soft start. She pegged me straight away though and asked me if I was a reseller on Facebook marketplace. I replied I was, and realistically this is the first time I have really told anyone that I am a reseller at an op shop (though I am sure a few might know). Anyway she replied that she had hundreds of DVDs and PlayStation games and that I should come and take a look in the next hour at her house which, honestly, caught me a little off guard.
So an hour later I arrived and sure enough there were huge cases of DVDs, video games and game systems. I picked a few out that I was sure I could easily turn over mainly due to being sealed and also picked up a Ps2 Slim. At this point I still wasn’t exactly sure what she would even ask for a price as nothing had really been discussed. When the time came to negotiate we reached a deal we were both happy with. She understood that I also needed to make some money to make it worth it and that I can buy in bulk and help her unload some items.
“You can’t take it with you.” was her direct quote.
We got talking some more and she had been collecting all sorts of things for many years and done a bit of reselling herself. Her sitting room or lounge room looked like an antique store, with expensive looking statues and cases full of uranium glass (the glass that’s neon green and glows – expensive).
Apparently she had a lot of vintage items stashed away that I would be most interested in selling and we spoke about making that happen either by me purchasing directly in bulk or perhaps even me selling under a consignment arrangement for items I don’t really buy as yet. Could be some promise there, a paid way to learn other niches in effect. I followed up the next day with a thank you and sent through a list of items that I am looking for. I will set up a time to meet again and hopefully make a bulk purchase of items that I like selling and are easy to ship!
This, I hope will comprise most of my purchasing for September. Time will tell, still it was a timely reminder to get those business cards finished to lead to more opportunities like this in the future.
I also had a couple of days where I was able to pick up bulk lots of Jeans and books for good prices. On one occasion at a Good Sammys I picked up 12 pairs of Jeans in the space of 20 minutes of which 80% were Levi’s and the rest Wranglers and 1 Thomas Cook, never seen that before, so many in one place. All were in the woman’s section. It’s getting towards the end of jeans season but still a great score.
Those were the two days that really stuck in the memory but there were several others where good items were found such as toners, ink and huge lots of valuable books for minimal cost. These are the best kinds also with solid completed items so I know they are guaranteed sales.
Premier Live YouTube Appearance
Nothing like throwing caution to the wind.
Early in the month I responded to a request by @2aussiethrifters for resellers looking to do a live interview session on YouTube. Initially it seemed like a token gesture at the time of something that would be great to do but it soon became an apparent reality with a scheduled booking less than a week later, which, of course sent fear coursing through my veins. Fear is a good reminder that whatever your doing is challenging and has risk but this doesn’t inherently mean what you are doing is bad. On the contrary, great personal growth comes from these types of endeavours.
I had been meaning to get onto YouTube as an extension of this site and this had simply fast tracked the process albeit with minimal room for error in a live setting.
Doing this really made me think that I need to get some more content out there as I could probably be helping people that actually want to be helped grow their business improve the processes and maximise their time spent on growing on either a part time or full time basis.
I actually enjoyed this process so much that I will be taking the monthly summaries to YouTube also. In may ways it will likely be faster to generate that content than it takes to write it!
Anyway here is the recording, please enjoy.
This month I outsourced my most hated task – photographing and measuring clothes.
The process to get this up and running was interesting to say the least. I simply created a Facebook post in a local community group I am a member of and let it run. The only real stipulations I made were that they must live locally, have camera that was better than my own and that it was part time ad-hoc work for now requiring the person to have their own respective business number ABN so invoices can be generated and I can claim this process as an expense.
I was quickly inundated with messages and after only an hour with around 30 persons interested and actually had to comment to say that I would not accept anymore submissions. To be honest I found it a little difficult to pick someone to complete this task from the pool of potentials, its not exactly a common task. I quickly discarded anyone who led with “how much will I get paid? as their opening message then followed by removing anyone with multiple spelling errors (details!). From the remaining pool I ended up settling on 2 persons who had taken the time to put a bit more effort into their initial introduction. I figured by selecting 2 persons in case one didn’t like it or wasn’t very good I would have a backup.
The setup process of getting this started was a little bit more involved than I initially thought. I needed an itemised sheet to record the details on. Creating the sheet was fairly straight forward however my own desire to have this sheet look aesthetically pleasing resulted in this taking longer than it really needed to. This was followed by creating a basic set of listing instructions, basically making a mini eBook to ensure that things run smoothly whilst having minimal impact on my time. Its not rocket science as the saying goes but a bit of extra care upfront to save me time later should I have to change subcontractors later.
The actual process itself at this time looks like this:
- Find items.
- Get a new empty bin / tub.
- Create Bin SKU labels for bin / tub outside to stick on. (SKU System)
- Load items into tub and record onto the listing sheet. I actually do this by using the dictation on my phone in Bear (A notetaking App). I then email this to myself and add it into the listing sheet and then print out. All nice and neat and really doesn’t take long at all.
- Add the bags that clothes get wrapped in.
- Add the “Thank You” stickers that also hold the item SKU number.
- Add the listing instructions (first time)
The best part about this is it frees me up to get listing and removes the bottleneck created by my least favourite aspect of this business, clothes listing.
So going forward, there should be no reason why this doesn’t massively help build this business. I was thinking about this the other day where I have previously talked about buying bulk lots and having a couple of items pay for everything else within the lot. This concept effectively rings true for outsourcing these items as well. At the moment I am sticking to 25 items per bin, there’s a couple of reasons, at a price of $4 an item for photographs and measurements x 25 items obviously makes $100 which is a nice even number to keep track off. The other reason is the physical size of the bin where 25 items is almost maximum they would fit depending on item size of course.
Anyway the benefits of using a subcontractor have been apparent already with the first lot of photos coming back having several that were of higher quality than I would’ve been able to take myself. This was a nice surprise indeed. The other immediately obvious benefit from my perspective is that it forces me to keep listing, I already have 50 clothing listings ready to go all I have to do is list them, I also have another 50 that will be ready this week so I am always having items ahead of me to keep me pushing.
Basic Maths on Outsourcing
So obviously outsourcing is a cost which impedes on margins whilst conversely increasing the velocity of sales (in theory) by allowing more items to actually get listed and therefore sell! Still I was curious to work out where I needed to be to make this work, bearing in mind the subcontractor has to make a half decent hourly rate to make it worthwhile also from their perspective. I already had a rough idea of what my own throughput per hour would be doing this task so that is where $4 an hour comes from, photographing and measuring 10 items an hour approx. This might include the odd bit of spot cleaning / ironing also.
My own thinking is this: I can pay someone $40 per hour (equivalent) which will save me 1 hour of my time. I can then use that hour now to make $100 per hour by listing items (assumes 10 items with average net profit of minimum $10, all listed in that hour and all sell eventually). So on this basis, I am coming out ahead every time. I haven’t included the setup time which will get faster and faster every bin and also excluding the tax deductions applicable for simplicity.
Running the numbers on what is currently been outsourced, so 100 items at $4 equals a $400 subcontractor expense. 100 items sold with an average price of $10 net profit per item yields $1000 net.
I want to work this backwards to work out the effective hourly rate, I want this rate to be better than the day job rate.
$1000 Net – $400 Expense = $600 Net profit. I estimate that it will take between 4 to 5 hours to list these 100 items. Factoring also in a 5 min average to source and 5 min average to ship. 100 items x 10 min = 1000 minutes. Divide this by 60 to get time in hours equals a total of 17 hours (Rounded Up). Add this to the listing time of 5 hours to get a total of 21 hours.
Thus the equation becomes $600/21 = $28.57 per hour.
It is important to note that this is the base hourly figure and that the actual figure will be higher than this due to finding those higher quality items. For example a brand-new with tag Harley Davidson shirt I will be making at least $30 net profit on.
After listing the first few items and working out the estimated net profit it became clear that I should probably be using $15 an item which returns a much better result of $52.38 per hour. As an example the first 10 items from bin one I estimated net profits as $19,$29,$14,$16,$29,$19,$29,$29,$19,$10 which has an average of $21.
It also should be noted that this is only a rough calculation to work with. There are several items in each bin like the Harley shirt mentioned but conversely maybe there are some items which take forever to sell or never sell at all! Some of these initial listings have items found during my early ventures into clothing that I would no longer pick up now in my travels. Some of these I may sell at fire sale prices just to make some space.
What Else Got Done This Month
I did finally make a start on the business card and have basically finished the initial design. Really I was trying to incorporate what I look for as a list on the card in some way. The chance meeting last weekend forced me to create a list of sorts so I have this now. I will have them sent off the printer within the next couple of weeks when a decent sale comes in.
After watching some YouTube and coming across a Daily Refinement episode which mentions customer specific coupons I created my own unique coupon code, turned it into a QR code able to be scanned and now are adding those to items being sent out. I have been getting great feedback for existing packaging, now maybe this will boost some repeat customers!
Plans For September
Business is all about synergies and harnessing skills or situations which create advantages. I have been lucky enough to access to some lockable storage space. Part of this month will be to move some of the inventory out of the house into this space, thereby allowing more of the house to return to normal function whilst simultaneously allowing inventory expansion / business growth. Exciting times.
10 listings a day, for the month.
Create YouTube content, starting with the August 2019 Summary, Reselling – One year in review and a generous introduction.