Cash tied up in inventory

[Paleo_joe]

I am curious what everyone's approach to sales vs. inventory is. Do you move everything immediately or wait forever on your price, or something in between? Is it better to start everything at $0.99 with no reserve, or to have a buy-it-now forever if that is what it takes?

I have no approach, that's why I am asking. I go back and forth. I am having too many auctions end with no bids at the moment.

 

[trdhrdr007]

I call this the fast nickel slow dime question. Some people always go for the fast nickel & others will wait forever for that dime. Best method is to combine the two.

IMO the auction vs BIN it now is a whole different issue that mainly depends on the ratio between value & demand. Obviously high demand items will bring market price in an auction format. Those can safely be started at .99. Where you can get burned is if an item is high value with a relatively low demand. In those cases there might not be 2 people ready, willing, & able to buy when your auction is active. With those type items you have to go BIN or high starting price auction.

 

[Tallone]

I agree with the comments above although I never list anything at $0.99. Too much risk for my taste - even for items in high demand. For me, the only other important factor is the size of the item. I don't have a huge amount of storage space so I like to move things along fairly quickly. This is especially true for larger objects. On the other hand, I will be patient and try to get my price for smaller, easy to store items.

 

[diggummup]

I am overloaded with inventory. I don't spend anything I can't afford to not sell right away. I've wanted to do some serious listing for quite a while but my work is preventing that from happening. As far as the .99 cent auction listings go, I would avoid it. Unless it's something that will create a lot of interest, nowadays most items don't. I start my listings at the minimum price I would want or the lower than the price of any identical ones listed or recently sold, whichever is more.

 

[mugsisme]

Every time I have done a $.99 auction I have gotten burned. I now start at the lowest price I am willing to accept for an item. Some items sell fast, some take a long time. What I do is try to meet my CC each month. But that is a huge problem, because now I have tons and tons of stuff to sell, and my CC is through the roof. (I took the card out of my pocketbook so I won't spend.) So if an item sits, it's not the end of the world, because it is already paid for. However, like I said, I sold 5 different watch lots for a song. I started them at $.99 and they sold for about $10-20. I am talking really good watches. So that is why I won't start so low. I think you really need to have a following, people who check to see if you list new stuff. I rarely see the $.99 auctions going for a high amount with someone who doesn't have a huge feedback and loads of sales.

I think that this is a good time to sell, because people go nuts during the holiday season. I am working on getting my listings up. I also relist stuff about every other week. You never know when the right buyer will come along. I just don't like to relist and relist and relist the same thing over and over and over again.

 

[clovis97]

I typically price my stuff with the slow dime method.

Sometimes I am wrong, and the stuff sits way too long, but as a general rule, it has worked out well.

I just sold a set of books for top money, but I had to wait 4 months or more for them to sell. I only paid $1 for them, so a $79 profit is fine with me, and I don't mind waiting. I would NEVER run a .99 auction on these. There is just no demand for them.

I also sold some odd parts today for top money. Again, it was worth the wait of 4 months. I literally had nothing in these parts...not even a dime.

Last winter, I had an advertising piece that I thought would sell for big money. I ran a 9.99 start auction, and it only sold for $51. I thought it could have sold for $551. I won't make that mistake ever again.

 

[jerseyben]

I am curious what everyone's approach to sales vs. inventory is. Do you move everything immediately or wait forever on your price, or something in between? Is it better to start everything at $0.99 with no reserve, or to have a buy-it-now forever if that is what it takes?

I have no approach, that's why I am asking. I go back and forth. I am having too many auctions end with no bids at the moment.

If you are having cash flow problems then you may want to consider taking a break for a while. Ask yourself what your "goal" or reason is for doing this. If you do not have a direction, then you are just hopelessly burning through money.

If you are trying to make this a business, then you might consider consulting an accountant and/or taking some business courses at a community college. If this is just a hobby, then consider revising your strategy so you do not get stuck with a pile of stuff you cant move.

 

[jerseyben]

Every time I have done a $.99 auction I have gotten burned. I now start at the lowest price I am willing to accept for an item. Some items sell fast, some take a long time. What I do is try to meet my CC each month. But that is a huge problem, because now I have tons and tons of stuff to sell, and my CC is through the roof. (I took the card out of my pocketbook so I won't spend.) So if an item sits, it's not the end of the world, because it is already paid for. However, like I said, I sold 5 different watch lots for a song. I started them at $.99 and they sold for about $10-20. I am talking really good watches. So that is why I won't start so low. I think you really need to have a following, people who check to see if you list new stuff. I rarely see the $.99 auctions going for a high amount with someone who doesn't have a huge feedback and loads of sales.

I think that this is a good time to sell, because people go nuts during the holiday season. I am working on getting my listings up. I also relist stuff about every other week. You never know when the right buyer will come along. I just don't like to relist and relist and relist the same thing over and over and over again.

I mean this in the nicest way possible:

You may have an addiction and I would encourage you to take a step back from this and decide if this is right for you.

If you are frequently getting burned then maybe it is time to re-evaluate why you are doing this in the first place and make some changes.

If you are struggling to pay off your credit card, then maybe it is time to stop buying for a while and just focus on selling until you can get yourself to a "good place".

I do not mean any offense with these harsh comments, but I dont want to see anyone screw up their lives over a bunch of junk/treasure... Just my 2 cents.

 

[Beachkid23]

Every time I have done a $.99 auction I have gotten burned. I now start at the lowest price I am willing to accept for an item. Some items sell fast, some take a long time. What I do is try to meet my CC each month. But that is a huge problem, because now I have tons and tons of stuff to sell, and my CC is through the roof. (I took the card out of my pocketbook so I won't spend.) So if an item sits, it's not the end of the world, because it is already paid for. However, like I said, I sold 5 different watch lots for a song. I started them at $.99 and they sold for about $10-20. I am talking really good watches. So that is why I won't start so low. I think you really need to have a following, people who check to see if you list new stuff. I rarely see the $.99 auctions going for a high amount with someone who doesn't have a huge feedback and loads of sales. I think that this is a good time to sell, because people go nuts during the holiday season. I am working on getting my listings up. I also relist stuff about every other week. You never know when the right buyer will come along. I just don't like to relist and relist and relist the same thing over and over and over again.

This was me. After having my card paid down to almost nothing my cash advance was the same interest-rate as if I bought something. so I took a lot out and went by stuff to sell on eBay! After I reached about eight grand on my credit card I was like holy crap! My van was paid off so I took a loan against my van that has a 1.7 rate instead of 8%. Cut that card up and now I have $150 payment instead of $350 payment. But I am not happy with that decision making whatsoever! I love buying stuff but I had to get some help from my wife to intervene because my was becoming a problem!!! So basically all of my profit for the last year is either wrapped up in inventory or in credit card debt now. I've had a really good month and have started to save up cash again and sell off sell off a lot. I'm currently running 45 auctions and they all started at $.99. Most of them seem to sell for what they're worth I had a couple disappointments but I normally don't pay that much stuff.

In reality a friend of mine wants to open a jewelry store I could literally feel his cases and keep them filled for probably six months. And if I sent a scrap box to the refinery I would probably get enough back to pay off my loan 7xs what's on it. So not all is lost and it wasn't all stupid purchases but I can't go that route again none of my I'm 34 and the thought of having debt again makes me sick!!

 

[Paleo_joe]

If you are having cash flow problems then you may want to consider taking a break for a while. Ask yourself what your "goal" or reason is for doing this. If you do not have a direction, then you are just hopelessly burning through money.

If you are trying to make this a business, then you might consider consulting an accountant and/or taking some business courses at a community college. If this is just a hobby, then consider revising your strategy so you do not get stuck with a pile of stuff you cant move.

No cash flow problems, just curious about how other people approach inventory vs. cash. I have an MBA and I'm averaging about $1000 a month profit from my ebay sales as a part-time job -- but I want more.

My approach right now is starting an auction at the lowest price I'll take, which is $25 at the low end, but I get a lot of items without bids. I have sat on things for months with a b-i-n to get top dollar, but I don't like having that money tied up. It is better to make 4 quick sales and net $25 each time than it is to make 1 slow sale and net $100, IMHO, so that's what I'm trying to accomplish, without giving stuff away.

Well, off to a sale!

 

[Joe777Cool]

It depends on the item as others have suggested. I have items I have been sitting on for 6 months waiting for the right buyer. If I have a lot of 5 Morgan dollars, I have not problem putting them up at .99 and as small as a 24 auction. Occasionally I get a little less than expected, but sometimes I get a bit higher too.

There are a few things I do as to not get bogged down in too much inventory. 1. dont buy stuff that is too hard to ship, you will avoid listing it! 2. avoid small $ items unless you have a large quantity. Small $ means small profit and you will be less likely to take the time to list it. 3. sell as a lot. you may not get top dollar on each item, but listing 25 similar $5 items into a lot will help reduce inventory and increase cash flow.

Good Luck!

 

[Omega]

I think the main questions to ask yourself are what are you selling, do you need money, and what did you buy the item at?
For example, I sell jewelry and coins, and occasionally other things. If I'm going to sell something else, it has to follow 2 rules, 1. must fit in a small envelope 2. must be bought at such a good price I can sell it immediately and still make a profit if need be. For example, my store is full of jewelry and coins, but there are also some coach items and sunglasses. I bought all that other stuff for $1-$5 a piece. I know I can go down to the mall and get more for them if need be.
I have had this debate with myself a lot lately too: auction or BIN. Selling jewelry, I am usually lucky to get melt when I run .99c auctions. But once, I sold a ring that weighted under a gram for $300. I would have never suspected that to happen, I would have put the BIN around $40. Now I do both auctions and BIN, because I want to get the most out of my stuff, even if it takes longer to sell. I give things a few weeks as BIN before I'll run auctions and scrap it. I'll never have anything for longer than 3-4 months though, that's way to long.
Hope some of that made sense. I've had a long day lol.

 

[Beachkid23]

I so manly jewelry as well. But I have gotten myself into a position where I sell for people as well and I tried to look for higher end pieces and then take a percentage off of that. So word-of-mouth travels fast but then I get people who will be like I want to consign this with you but I'm looking for something quicker. Then I can tell them that I will buy the item from them instead. But that is only if I can move it fast like example coins, gold that I can send to the refinery or anything that is really sought after.

This is all new though, I have a lot of stuff sitting that I can probably get $15-$20 per item that when I go out to a yard sale and I see it and it's a dollar or under I'll buy it. But when I get home I lose interest and put it off to the side and sell the items that I'll get $50-$100 first.

And then also I have a lot of items that would probably get $8-12 for. The ones when you having a slow yard sale day so you pick them up because you've bought nothing else worthwhile. All that stuff starts piling up. Then after a year I look in my room and it's crazy messy!

I think I'm kind of luckier than others because we have yard sales here in South Florida on Thursdays, Friday , Saturday and Sunday.
I work part time for two different thrift stores and get to buy from them as well. I make just about minimum-wage working there but the items I get to buy that come in our pretty the good. There are six thrift stores within 5 miles of where i live. three of them are run by retired people that don't have a clue. And then I have five other dealers passing out my cards so I get phone calls from other people weekly. Honestly I have so much potential to buy stuff but I don't have a means of moving it as quick as I'd like.

And then..... I'm in the process right now of getting my secondhand dealers license and precious metals license and looking for a place to set up shop. I've made my connections I have buyers for every piece of jewelry I come across except for diamonds. But I don't want to get a loan so now I'm just trying to get rid of as much as I can during Christmas so that afterwards I can set up and began.

I could write more but I'm afraid he will fall asleep reading this post so I'm going to stop now.

 

[Paleo_joe]

This is all new though, I have a lot of stuff sitting that I can probably get $15-$20 per item that when I go out to a yard sale and I see it and it's a dollar or under I'll buy it. But when I get home I lose interest and put it off to the side and sell the items that I'll get $50-$100 first.

.

That's a lot of my issue. It makes total sense to sell the $50 and $100 items first. I am trying to train myself not to buy $20 items for $1 because it takes as much work to sell that item as it does a $50 item. My goal is $25 / hour for my time and I won't get that on a $20 item, especially one that is a pain to ship.

That being said, this week I have a lot of $9.99 auctions because I am clearing inventory and I just want my money back out of the stuff. $500 in the hand today is better than $1000 worth of stuff in a closet that I might never get around to selling.

 

[jerseyben]

IMO, cash flow is one of the biggest problems that all small business owners face.

 

[Tallone]

I'm in the process right now of getting my secondhand dealers license and precious metals license and looking for a place to set up shop.

You are probably already aware of this but... if you are setting up a "bick-and-mortar" store, beware the overhead. Rent, utilities, insurance, etc. can get mighty expensive which requires moving a lot of merchandise every month. A lot of businesses fail because they are under-capitalized and/or fail to accurately estimate the cost of operation. Best of luck to you. I hope it works out well.

 

[Beeping_Rich]

If you are having cash flow problems then you may want to consider taking a break for a while. Ask yourself what your "goal" or reason is for doing this. If you do not have a direction, then you are just hopelessly burning through money.

If you are trying to make this a business, then you might consider consulting an accountant and/or taking some business courses at a community college. If this is just a hobby, then consider revising your strategy so you do not get stuck with a pile of stuff you cant move.

I agree, business plans are your ideas put on paper and altered to make a profit. If the altering takes away form the hobby and now becomes work, its a bad hobby to make money

 

[leadnbrass]

I've been selling things for a while...about 3 years ago my wife got let from her job due to budget cuts. At this point I really increased my selling to make up the other income.

I was making really good money increasing my sales but also ended up with a large amounts of "stock" at one point I had to rent a storage unit for the overflow.

I ended up setting up at a few flea markets and that did help but I still was overwhelmed.

Its very hard to not go out and buy more items when you feel something worth a ton is out there and you may miss it...face it everyone want's the big hit.

What I decided to do was clean out my "stockroom" which is a spare bedroom that loaded with stuff. A lot of it I just re donated or threw away. It was hard to start but once I got rolling it was fine. It actually felt good to see the floor and shelves in the room again. I only tossed items that have been "listed" a few times and in reality wasn't really worth the hassle due to the profit margin that they have.

Other items, which included many that were never even listed after bought and honestly forgot I had brought in some good money and I would do quick listings with just my cell phone. I'd take a bunch of pictures and throw listings up not caring about the time of day (great when Ebay offers free listings) for the things that again "I just want to get rid of".

I found that doing "junk drawer" lots helps get rid of a lot of clutter as well...throw a sterling spoon or coin in the listing and it will sell...load it up in a large flat rate box and you'll have more shelf space.

Now that I have a much cleaner and organized room I currently will try and list everything when I buy it...I usually will take good pictures with my DSLR but for the smaller stuff and newly packaged things usually one picture is enough.

Don't go out and buy all the time if you do have items on hand...guess what, you may miss something good but another great find is just around the corner...you and I both know it. This is the hardest thing for me but its ok once I start doing it.

And my biggest thing to keep me from getting loaded up with junk is to research everything. What kind of profit to you want? Is that $1 item worth a small profit if its a pain to ship sells slowly and for a little money?

My basic rule of thumb is if the item sells for over $10 and costs me under $1 with easy and cheap shipping (1st class padded envelope) I usually go for it. It also needs to be a item that sells on Ebay as far as "how many are selling" An example of this are Phillips Sonic Care toothbrush heads. They sell great. I usually find a back of 2-4 sealed for $1. They sell on Ebay for about $10 for each head. I'll list up a twin pack for $14.97 with free shipping. After fees and easy shipping and initial cost I have about $9 in profit and the item sell stupid fast and I no longer have it "in stock"

Winter is coming and if you don't have the luxury of year long sales in your area due to the weather start pumping out the listings with your old stock...you'll be in great shape come spring.

Bottom line...stop buying and start selling what you have...rethink your buying when your stock is gone.

 

[AwakenYouthful]

A lot of helpful information from everyone in this thread. I have not been buying and reselling for even 2 months, but my inventory has already begun to take up a lot of space and I am realizing, at the pace I find things, I will not ever be able to list all the items and "catch up" with the amount of time I have free for this hobby. I have gotten smarter with buys, but it is only natural to make a few learning mistakes the first month or two when starting something new.

I've sold less than a tenth in volume of what i have bought overall for resale, and I have already made my money back. So it is very difficult to not consistently go out and buy more stuff, seeing the quick turnarounds and huge profit margins on items bought. Maybe i is unrealistic to assume more inventory is better.

With winter coming, there won't be many sales to go to to find inventory. Maybe that is a lot of the sorce thinking in stocking up now and catching up relisting later.

I am also finding there are certain items i am delaying posting. Like record players and bigger things. What's the best way to ship a record player? Lol

 

[leadnbrass]

If parted out a few record players in my day.