Tag: Delayed Gratitude

When A $20 Price Reduction Turns Into Hundreds Of Dollars

March 19th, 2019

In this business it is critical to continue to keep learning and adapting.

Here is a recent story where an interaction with a customer turned into a win-win situation, always the best kind. The customer was happy with a great deal and I got not only a solid sale but exceptional insight on the specifics of what they were looking for.

Translation, items that will sell.

It started with a pair of blue denim jeans with the label 26 Red. I picked these up one day at a Good Sammy for the decent sum of $5. There were no comps I could find but I knew of this brand as growing up a young nineties kid myself, my best friend loved this brand and wore them all the time. So I picked them up and later listed them for $100 with a vintage 90s title. It did not take long before I had a few watchers on these jeans and then some interesting eBay message exchanges began.

The guy who initially contacted me (and would later become the buyer) hit me straight up with a low ball offer via eBay message to circumvent my auto decline which I had set at $50. His offer came with a story, however, that my pair of jeans had a sort of providence (originally being made in Australia in the 90s) and later being sold out to a chain store which decimated the brand by outsourcing the manufacturing, reducing the quality and simultaneously cheapening the price. There was quite a story for this pair of jeans. Anyway, it turned out that my pair of jeans was from the chain store days, obvious from the made in China tag, (and not even from the 90s – they were from early 2000s) but still had some value, just not as much as I was hoping for.

I had a figure in mind that I wanted to get for these jeans, and was fairly sure they would not take long to sell gauging by the interest the listing was receiving. Unfortunately, his offer was about $20 under what I really wanted to get for these and so I was left with a conundrum. Here was a buyer who obviously wanted these and had put in a large amount of time to communicate what these were, what he would pay (and had paid previously) for these vs ones that were made in Australia.

I had an idea.

Here was a guy who loved these old nineties styles, so much so that his friends continually gave him shit for it – his words. It is funny that the 90s look seems to be making a rebound, as all eras seem to as the youth of these eras enter their 30s and 40s and seek nostalgia. That concept is for another post later.

I made an offer of a different kind. I realised was that this guy was a loot crate of niche information about obscure vintage brands from the nineties. So in exchange for the additional $20 off the listing I asked for a list of brands that he (himself) would buy. That way I knew I was looking for things which I knew would sell (and even had an avenue of a potential buyer) should the right size appear.

The list as follows:

Brands I Wear From The 90′ Would Be –

26Red,

Cross Colours,

Klue,

Blank,

Independent,

Element,

Ecko (Another Brand That Sold Out To Kmart In the Early 2000’S)

Mambo (Sold Out To Kmart Around 2005, Early T Shirts Can Be Worth 50 – 250 Due To Artwork By Reg Mombassa)

Some Select Baggy Quicksilver Jeans,

Alien Workshop,

Pelle Pelle

And A Few Other Random Brands Like:

Rocawear,

Blunt,

Alphanumerics,

Kuta Lines.

I chose to view this exchange as a form of delayed payment and potentially an immensely valuable interaction should I come across some of these brands later in the wild. Indeed since this interaction I have found a few items from this list at decent prices mainly due to their obscurity I think.

I also did actually make $25 total profit on the sale anyway so it really was a Win-Win-Win

• Win (buyer)

• Win (seller-present)

• Win (seller-future)

There are multiple types of value.

Money, information and the application of information.

In this reselling game, they all matter.
Profit Margin Analysis December 2018

December 9th, 2018

For the most part, I don’t have issues with massive margins on products. The majority of my so-called bread and butter items aim to make a minimum of $10 profit each sale. These will sell consistently over the longer term and don’t really require much adjustment.

However, I recently have been finding items where I have spent $20 to $30 when purchasing and have them listed on the store for over $100, with the highest item currently listed for $800. This leaves me wondering I am being too greedy with the amount I’m trying to get out of these items? That listed $800 item cost me $35.

My thought process recently was wouldn’t it be better to get some of these items sold for a lesser amount and get this money back into the investment property, thereby reducing the mortgage and saving additional interest payable by myself? After all, the value of an item is kind of arbitrary until someone actually buys the item. Perhaps my own bias and egos desire to be correct with what I think something should sell for is actually stopping me getting more items sold? Perhaps it’s me also pricing some of these items like this because I know I will not find another in all my days as some are truly unique…

Of course, I also want to extract the maximum value from these higher priced items as they really are where the big profits lie but I realise that it is financially in my best interests to get these items moving.

The sum of these higher priced items totals into the $3000-$4000 range.

What’s The Plan?

Well, the obvious start would be to reduce the price, but at what time point should this happen? A couple of my higher priced items have been up for 5 months now with a lot of views, a couple of watchers here and there (possibly other resellers) but no offers or messages enquiring. The offers I understand as I have Auto decline turned on to deter low ball offers (and stop my time getting wasted) but I thought I may well get some questions on a couple of items which has not eventuated.

6 months seems like a good number to start with. I will gradually start reducing the price on some of these items to get some decent money from sales going.

I have previously used the markdown manager with limited success. A 10% storewide markdown yielded no discernable difference in sales.

eBay actually has a new feature that is perfect for this type of scenario. After 10 days of the listing, eBay will automatically reduce the listing price by %5 and then do the same every 5 days all the way down to a set value.

For example, I have an item listed for $120 + shipping at the moment. It has 9 watchers sitting on it.

I am confident if I apply the above strategy I will get a sale. I paid initially $20 even if I dropped this to $80 for the sale I am still making $50 (after fees).

The Longtail Benefit Of This Approach

In the future is where the value of this approach lives.

Suppose I applied this approach for all of these higher value items and they all sold today for $2000 combined (an across the board 33.33% haircut on original listing prices). If I took the sale amount of $2000 and made a one-time lump sum payment on the investment property and then did absolutely nothing else I would save approximately: $9453 and 1 year 8 months off the loan term!

That is huge, more than 4x the original amount in interest savings.

Obviously, the results vary greatly depending on current rates, loan amounts and time frames. Just google an extra lump sum repayment calculator to see what a difference even a small extra repayment will make over time.

Tag: Delayed Gratitude

When A $20 Price Reduction Turns Into Hundreds Of Dollars

Profit Margin Analysis December 2018

What’s The Plan?

The Longtail Benefit Of This Approach