Get Rich Slowly
It may seem somewhat counter intuitive but this year I want to slow the growth down a little bit to spend more time focusing on my newly expanded family with the addition of a little one just recently.
Growth for the sake of growth is not necessarily directly correlated with increased sales, profit or happiness, it took me 20 odd years to realise that time is just time, and much more valuable than money.
My own growth this past year whilst not exponential has been pretty steady and I’ve gone from only around 100 listings at the end of 2018 to almost 1000 at the end of 2019.
Rapid growth can also have some other problems particularly relating to cash flow. Some good examples are companies that grow too big to fast without implementing the systems required to effectively achieve sustained growth along with the cash flow required to support it. This growth explosion can often come at the expense of the company with resources stretched too thin or decisions made on anticipation of business contracts which fail to come to fruition. Chaotic growth can cause business failure, particularly with small and medium sized.
I felt this year I have done a reasonable job of managing cash flow with only 2 months of the year being negative due to inventory purchasing, and only slightly so. There’s also been a fair amount of infrastructure been acquired. Items like thermal printers and rolls, post office box, a second phone number, accounting consultation fees, tubs – many many tubs, bulk purchases of satchels to save on cost per item but there’s still a cost up front. All of these things add up probably towards $1000 I would think. In 2020 there will be far less of these which will improve net profit. That saving alone is the equivalent of 2 extra house payments.
Sales this year have been up and down but definitely improving each month. Cash flow has been the same (up and down) and I have spent very heavily on inventory at times, so much so that it might actually be possible to hit my upcoming listing targets for 2020 without even sourcing for half a year (or more).
That’s how big my money pile of unlisted items currently is.
There’s hundreds of items ready to be listed and sold. Just gotta do the work.
If your reading this it may seem like madness to have that much stock, you gotta list things to get paid, your leaving money on the table and all that jazz and yet, this is only partially true.
Maybe you even think it is just laziness, procrastination, hoarding or a combination of all three.
Nope, none of the above.
You see, I had always planned this to occur at this point in time like I had before, when I first started reselling, to have a huge cache to fall back on. On this occasion however it’s all about the upcoming time availability and not the money. I am literally not going to have the time with my family commitments to get much physical sourcing done over the year and honestly of course I would rather spend time with my beautiful wife and daughter.
There will still be the odd sneaky look here and there naturally, I’m only human after all! I am lucky to have 2 locals op shops that can provide cheap quality stock when I need less than a 5 minute drive away. I can also work in some lunch time loot missions during work hours when convenient.
The other interesting point to make here is that because of this upfront effort in sourcing so much in 2019 leading up to the birth I anticipate that actual net profit for 2020 is likely going to double or more.
This is due to the available time I will allocate to reselling being focused on listing instead of sourcing, the flow on effect of this change is minimal inventory expense. In 2019 I have maybe had the ratio of time utilisation at 70% / 30% in favour of sourcing. 2020 will see the inverse of this with sourcing dropping to 30% or less of my time available .
I’ve learnt a lot during this past year and tweaked things as I’ve gone on the fly. I’ve tried new niches and ideas and gotten some things right and others wrong. I do learn best from mistakes and this business is very forgiving initially with low cost of entry to play the game.
By stepping back a little bit in 2020 I think I can get further useful systems implemented, tested and reviewed to make even more effective use of my limited time. I am a pattern person by nature and have a real passion for process improvements, indeed my university degree focused on just this, information systems. Even in my own little reselling world I have identified several areas I can already improve upon in 2020.
My mission statement for this year:
Clean Up Time Leakage
Conduct Efficient Sourcing
Always Put In The Work
What is the figure that I need to hit each day? Really it should equal either the steady-state turnover of the store or sustained slow listing growth.
Being that I’m still just under 1000 listings and paying for 1500 with the store it makes sense to try and get to this max number quickly and then scaleback if required.
I sell on average between 2-3 items per day (when listing consistently). Therefore I need as a minimum to list this amount per day to keep a steady level, ideally sitting right on max free listings if possible. So extrapolated out that’s 1100 listings for the entire year just to spin the wheel.
Really I need to bump this up to 5 per day minimum which equates to 1825 for the year to get some low solid growth.
The initial plan is to set the minimum target each day of 5 listings and then anything above that can either be added to the target of 1500 to get there a bit quicker or scheduled for future days to ensure that new items are getting listed each day to satiate the mysterious eBay algorithm.
Branching out into other platforms needs to become a priority this year also, I have seen too many posts lately about how a couple of small isolated incidents have canned peoples eBay accounts. This is not just isolated to eBay either with Etsy also setting some ridiculous service metrics to be abided by or face suspension potentially triggered by only a couple of misdemeanors.
These platforms also have to look after the sellers or they will go elsewhere.
My competitive advantage vs peers relates to my speed of listing using technology shortcuts including auto complete, templates and use of additional software such as auto hot key to semi-automate listing.
It makes sense that I spend more time cross posting to Etsy, Facebook marketplace and Depop. Indeed I already have Etsy and Facebook Marketplace scripts competed so I can quickly build a listing and replicate it across multiple platforms.
There are other pieces of software such as List Perfectly which can assist with some elements of cross posting but of course they come with a pricetag and limitations tied to price tiers. I get more or less the same functionality as some of these software packages for free as well as other aspects such as the hot strings and other scripts that can help. Still it may be worth a trial of this (or others) service to give some insights on potential improvements to my own script functionality.
Halfway through the year I realised I could shave a few seconds of the way the existing script was operating at the time and I calculated this equated to an extra two listings per hour which doesn’t seem like a lot but when you’re spending hours upon hours listing things it really matters to the bottom line. It’s the equivalent of an extra $20 an hour (assumes $10 per item net profit). That’s $7280 over the year.
Another example from 2019 was setting up startup launchers which make getting into the listing frame of mind easier by removing that initial friction. For example my computer takes only seconds to turn on and get to the desktop thanks to the SSD. I can then double click the auto hot key script then use a single shortcut combination to open all the browser windows and folders I need to get listing instantly.
My current launching script opens instantly and logs into:
- EBay template page
- Sizely template page
- Australia Post business account page
- Working folder containing photos
There’s a theory you may or may not have heard of called Peratos Principle which says: 80% of your results come from just 20% of your efforts.
The most common examples I have seen used for this principle relate to business customers. By focusing on your best customers whilst simultaneously culling your least valuable (in time commitments or problems for example) you can markedly improve your business results.
This same principle can be applied to reselling. I have been to a huge number of different Op shops over Perth city in 2019. It became apparent that a select few tended to yield either better high value items on occasion or were consistently better priced than others.
So you can probably guess where this is heading. By focusing on just these high yielding shops in 2020 I can dramatically reduce my physical sourcing time whilst still maintaining good returns.
It makes total sense for procurement to be completed without leaving the house.
In 2019 I set up search shoves automated using Auto Hot Key. The script when triggered automatically searches Facebook, Gumtree etc using predetermined search strings running all queries instantly. This all allows quick survey of relevant results without wasting time with the inputs.
2020 will also be more of the same but expanded upon to capture more specific niches and key words. I will also be adding some additional text expansion to assist with procurement questions.
The other addition for this year will be online auctions. I will be very selective with what I pick up but it is an option.
Garage Sale Sourcing
I will potentially check out convenient local sales if driving by.
I will however complete both days of the garage sale trail coming up in 2020. 2019 was a great example of what could be achievable when routes can be planned with efficiency. I only did the one day in 2019 and came away with a full ute load for minimal cost.
Another aspect I will explore will be sales leads by networking with op shop‘s and other previous contacts made. This was originally the reason I wanted to get business cards made up so I could get some deals coming to me. Over the last year and a half I have gotten to know quite a few people who work at some of the op shop‘s including managers and some know that I am a reseller and some may correctly assume. I’m still a little bit undecided whether I will make this known at the op shops I intend to frequent for the year but this will be very relevant for ones that I may happen to pass by for example during a lunch break on a work day in a suburb that I wouldn’t usually go to. I can certainly see less harm or risk coming from doing this this way. I’ll add a side note here that I have set up a separate Skype number that relates just to the reselling business, and this way I can still use my own phone and the number will go to it.
Patterns Identified In 2019
It became apparent over the course of the year that I was running out of space in the room I was operating out of.
I spent up big when the stock was there, but found myself begin to forgo larger items due to space issues.
It got so bad that I was literally stepping over stock to even get to my computer or exit the room. This of course also meant that when I had to find something to ship I knew what tub it was in thanks to the SKU system but I still had to move a whole bunch of items including unlisted stock also in tubs to get to it which is hugely inefficient.
I felt physically pained when having to do this and having to continually move multiple tubs to access one costs precious time. Every time I faced this problem it wasn’t a huge time sink in isolation but the cumulative easily aggregated into at least a couple of hours of dead time. Dead time is the devil to be vanquished.
Some plans for 2020 include:
- Transition more items into the shed. I can still fit another few tubs here.
- Install a new racking system outside that I can put tubs on. I’m thinking of using this as my death pile/money pile to give me a visual reminder of what needs to be listed and also stop me from more sourcing until this is done.
- Implement regular consolidation of existing tubs to maximise tub usage and therefore overall physical inventory footprint. This can be easily done visually, consolidated then the SKU updated. I’ve been toying with a digitised way to manage this but more on this another day.
Another process I identified during the year that needs tweaking was improving my packing processes. This thought mainly revolved around the efficiency of getting items picked and packed to just be better organised with where required tools and equipment are located and how work spaces are set up. I cannot convey how frustrated I have been sometimes when looking for a pair of scissors that have been misplaced by someone and not returned. This results in walking around the house trying to find where the scissors are and failing that trying to find an alternate pair, as crazy as it sounds I’ve probably spent over two hours this year just gone looking for some combination of scissors, tape, boxes, eBay tape, dymo labels, measuring tape, etc…
The fix, well a few fixes actually:
- Wall mount some hangers where the common tools will hang. Like the back of the door.
- Create a secondary emergency caddy as a backup.
- Ensure that point 1 is remedied ASAP should items become missing.
- Pre Printing Thank You Labels. As it sounds, simply have these printed from the Dymo ahead of time.
Of course being better organised also has the benefit of identifying earlier when stock levels are running low on consumables. An example is bubblewrap which can be brought in multiple places nearby but usually at a higher cost along with the required time value to go and pick it up so it makes sense to better plan ahead this year and order early.
Another goal for the coming years to see if I can source a cheap supply of bubble wrap and other packing materials. I have seen some previous posts on some of the reselling groups which may have some good leads on this, for example places which carry a lot of parts, car service centres, bike shops, etc…. may have excess materials that can be sourced for free or minimal cost. Anything that can be found in this matter will be a direct cost savings to the cost of goods sold.
The rehoming items often second hand is great. I love the idea of rescuing items that might otherwise become trash. Even more so that I can get paid to do it. The packaging of these items to get them to where they need to go does however create a lot of plastic waste.
So I’ve been researching how I can improve this aspect of my business.
There are compostable bags, etc that can be used and even bubble wrap.
More research is required but I will be making this a priority this year to get some some (if not all) of these implemented. Looking to create a sustainable business.
At the moment I am just one man band on a part time schedule with the reselling due to full-time work commitments. I am a little envious of other reselling couples who it is obvious to see have some synergies in their work processes and practices to get things done. This coming year I would like to get some extra help with the business. I already started in 2019 to outsource some of the photos for clothes and other items which has already helped a lot but this is still a cost as I am paying a sub contractor to do this.
If only I could convince my wife that this could be a viable alternative to traditional work which would still allow her to stay home and look after our baby girl….
So she doesn’t know it yet and she probably won’t read this post either but I’m going to try and get her involved this year in someway, likely taking photos to start with for easy items such as media, books etc and then go from there. I guess the other thing that would probably help me a lot would be the odd trip to the post office or even helping with shipping.
Indeed this is part of my own five year plan to grow this business enough, to a point where perhaps she could go back to work full time and I could stay at home do the school drop off‘s etc and fit all the reselling in between a school day. That right there is the end game.
Health And Wellbeing
This one is pretty straightforward.
Whilst working away doing FIFO I was a nice trim 80 odd kilos doing double boot camps and eating whatever I wanted to. Fast forward to the job back in the city which has been predominantly desk bound for the most part combined with minimal exercise and a couple of really nasty flus this season has left me overweight and extremely unfit a combination not experienced since the early 2000’s when I used to smoke and drink too much combating undiagnosed depression at the time.
Now I have some extra motivation to get this area of life in order as within a year I will be chasing my little one around!
The remedy to repair the damage is:
Just as I need to make time for my own business as in the reselling I also need to make time for my own health each and every day to work out a balance that works for myself and the family. Easier said than done but I’ve already started.
Collaboration and Innovation
So there’s a couple of collaboration projects I will be working on this coming year, details are sketchy at the moment.
I also have some meetups with fellow Resellers planned, the first of which will be late January.
I’m planning to get more YouTube content created as well but yet to see where I can fit this in just yet.
As far as innovation goes high on my priority list is creating some google forms which can function as registers of sourcing, returns completed, inventory consumables purchased etc… the point of setting this up is to make tax time far simpler. A google form can be easily used on mobile and can make that record keeping that little bit easier.
2020 is shaping up to be an exciting year. Although the only metric I have locked down is the 5 listings a day I have a feeling that even my turtle growth plan is going to reap excellent results.