jerseyben
Gold Member
Here are my non scientific formulas:
Disclaimer: I ONLY do this as a hobby. This is not my business just something I do for fun on the weekends.
Most items that sell for under $5 and box lots: Pass unless it is practically free. Even then, if it takes up a lot of space or if it will be extremely hard to sell at any price then I would pass up stuff like this even if it was free.
For cheap items under $12: At least triple my cost unless it is something that is extremely liquid. 1/3 of price is for cost, 1/3 of price is for overhead and tieing up your money in less liquid items, 1/3 of price is for profit. Sell this stuff at the flea market, craigslist, or local auctions. This is the stuff you buy for $1 and sell for $5, etc. Small hand tools, trinkets, post cards, common records, costume jewelry to name a few. Most items fall into this category and can be found almost anywhere.
For items around $15-25: Typically double/triple my money using the same methods as above, just less profit (similar profit margin as above). Vintage, decorative items, DVD box sets, electronics, fishing stuff, etc. Sell less volume but make the same amount.
For items $30+: Typically sell these on ebay if they are easy to ship. For items that fall into this category, I am typically looking for a much higher profit margin. For example, buy for $30, sell for $100... etc. Higher cost, higher overhead, time consuming, potential headaches, etc. Designer jewelry, most quality vintage and antique items, certain video games, certain records, certain collectible items in mint condition, promotional items from small localities, etc. A lot of people focus on this category because this is where the most money can be made. In my opinion, this is almost a full time job by itself so I am very particular about what I buy for resale on ebay (not to mention the high potential for headaches).
For extremely liquid items: This would be items like coins, PMs, extremely popular items, very rare items, etc. I am willing to pick these up for slightly below market value for a quick flip. Typically these are worst case scenario - you get your money back. Usually you can make slightly over market value if you know what you are doing. Sometimes, you get lucky and make some decent money doing this. This category would be best suited for cherry picking in your area of expertise where knowledge is the edge you need. I have only lost money on this type of item a few times and it was never very much and usually due to some stupid mistake on my part. Coins in better condition than their cost, varieties of coins, proofs and key date ASEs, PMs at under melt price, "popular" vintage items that sell better on ebay than in a b&m, items that have a niche market, etc. Sometimes I buy items like this as an investment.
Note: I have heard people say that they only want to achieve a certain profit margin on anything they sell. If you are buying an item for $10 and selling for a 10% profit regardless of how much it is worth, then you are doing it wrong in my humble opinion. Unless you are a retail store with fairly fixed costs and a stable inventory, then you should be maximizing your profit potential on every single sale individually.
If an item costs you $10 but you can sell it for $100, then take the $100 every time! Why settle for 10% profit in this scenario?
Hope this helps. I was hoping to have a decent discussion about this so please feel free to throw in your opinion.
Disclaimer: I ONLY do this as a hobby. This is not my business just something I do for fun on the weekends.
Most items that sell for under $5 and box lots: Pass unless it is practically free. Even then, if it takes up a lot of space or if it will be extremely hard to sell at any price then I would pass up stuff like this even if it was free.
For cheap items under $12: At least triple my cost unless it is something that is extremely liquid. 1/3 of price is for cost, 1/3 of price is for overhead and tieing up your money in less liquid items, 1/3 of price is for profit. Sell this stuff at the flea market, craigslist, or local auctions. This is the stuff you buy for $1 and sell for $5, etc. Small hand tools, trinkets, post cards, common records, costume jewelry to name a few. Most items fall into this category and can be found almost anywhere.
For items around $15-25: Typically double/triple my money using the same methods as above, just less profit (similar profit margin as above). Vintage, decorative items, DVD box sets, electronics, fishing stuff, etc. Sell less volume but make the same amount.
For items $30+: Typically sell these on ebay if they are easy to ship. For items that fall into this category, I am typically looking for a much higher profit margin. For example, buy for $30, sell for $100... etc. Higher cost, higher overhead, time consuming, potential headaches, etc. Designer jewelry, most quality vintage and antique items, certain video games, certain records, certain collectible items in mint condition, promotional items from small localities, etc. A lot of people focus on this category because this is where the most money can be made. In my opinion, this is almost a full time job by itself so I am very particular about what I buy for resale on ebay (not to mention the high potential for headaches).
For extremely liquid items: This would be items like coins, PMs, extremely popular items, very rare items, etc. I am willing to pick these up for slightly below market value for a quick flip. Typically these are worst case scenario - you get your money back. Usually you can make slightly over market value if you know what you are doing. Sometimes, you get lucky and make some decent money doing this. This category would be best suited for cherry picking in your area of expertise where knowledge is the edge you need. I have only lost money on this type of item a few times and it was never very much and usually due to some stupid mistake on my part. Coins in better condition than their cost, varieties of coins, proofs and key date ASEs, PMs at under melt price, "popular" vintage items that sell better on ebay than in a b&m, items that have a niche market, etc. Sometimes I buy items like this as an investment.
Note: I have heard people say that they only want to achieve a certain profit margin on anything they sell. If you are buying an item for $10 and selling for a 10% profit regardless of how much it is worth, then you are doing it wrong in my humble opinion. Unless you are a retail store with fairly fixed costs and a stable inventory, then you should be maximizing your profit potential on every single sale individually.
If an item costs you $10 but you can sell it for $100, then take the $100 every time! Why settle for 10% profit in this scenario?
Hope this helps. I was hoping to have a decent discussion about this so please feel free to throw in your opinion.
