As I sit here this morning going over my April sales numbers, I can't help but notice how well I have done since getting back into ebay. When Cassini hit, I moved away from ebay due to the huge drop in sales. I instead went over to amazon and starting ramping up my business over there. As you probably know by now, the profit margins at amazon using FBA were half of what they were with ebay. But I stuck with it for 1 1/2 years before finally throwing in the towel. It wasn't until the end of March of this year that I finally decided to head back over to ebay and give it another try. I'm glad I did.
Prior to Cassini I was selling probably 80 items per month. After Cassini, my sales dropped to about twenty or thirty. Knowing this made me a little gun shy heading back into the ebay world. But I knew other sellers who were able to adapt to Cassini and bring their sales back up. So I wondered what they had done to accomplish this. In addition to talking to them, I also did my homework. I researched what others were saying about Cassini and how to work in conjunction with it to increase their sales. The answer to this was simple. It was all in the details. Let me explain.
Ebay is having to compete with amazon, and to some extent the other online platforms. But what ebay has over them is the ability for sellers to sell used items that are not permitted on these other platforms. If you are looking for something specific and want it used, most likely ebay is the only platform where you are going to find it. In addition, ebay recognized that the buyer experience was what was going to keep them relevant. They had to change in order to meet the requirements of their buyers.
Enter Cassini. Cassini took the search to another level. The primary role of Cassini is to match a buyer with the best seller for them. It factors in things like feedback, price, customer service and yes, item details. No longer can you just cram keywords into your title and descriptions and get a high placement. You have to bring value to the buyer. Cassini's algorithm is designed in such a way as to minimize the effects of keyword spamming. But it's not just these items that factor into where you show up in search results. You also have to have a decent sell through rate. For Cassini, if you are selling a high percentage of your listings, then you must have items that are in demand and therefor you will rank higher. Cassini also rewards you for having as much information in your listings as possible.
So what makes a great listing? To begin with, you want as much detail in your title as possible. Things like brand, color, style, size etc. You cannot just say "Women's blouse blue with flowers size 8". Now your title should be "Chico's Petite Blue Flowered 100% Non-iron Cotton Blouse Size 8". See the difference? All the specifics about that blouse are now in the title. But it doesn't end there. Below your pictures is an area for item specifics. This is where you input specific details about your item. Every single entry should be filled out. Even if one of them is unknown, put that in the field. Cassini wants all the details. The more you fill in the better off you are going to be.
Once you get to your description, your first line should be your title once again. Below that should be a bullet list of details about the item. Things such as 100% Non-iron Cotton keeps your blouse crisp and clean, Beautiful floral pattern, Long Sleeves, Machine washable, etc. When filling in your item condition, make sure you are honest. Note any defects or markings that may be of significant importance to the buyer. Don't try to sugar coat anything. That's a sure way to get a return and negative feedback. Lastly, make sure to do your homework on pricing. Look at similar items in similar condition that have already sold. For me, I try to be in the middle between the low and high priced sales. Don't under or over price yourself. You'll either have a low margin, or be sitting on an item for a while.
Follow these best practices and watch your sales increase. Cassini loves data. Make sure you are feeding it what it wants.
Tuesday, May 2, 2017
Thursday, April 27, 2017
So You Want To Be A Millionaire Seller?
Ah the dreams of the new ebay seller. They see story after story of an ebay seller who made a million dollars selling stuff on ebay, and they want to be the next success story. So how does one accomplish this lofty goal? What does it really take to make a million dollars selling on ebay? Well, I'm glad you stopped in for this little chat because I am going to explain it to you.
There is no real secret to selling a million dollars on ebay. Of course people are tempted by all of these courses that promise to reveal insider 'secrets' to accomplishing this goal. And of course that information comes at a price, and usually a hefty one at that. It's all smoke and mirrors. A lot of reading and regurgitating information that is already freely available if one has the patience to look for it. I'll give you the real secret. The real 'insider' information that will transform your life forever. you have but to read on!
First, you must know how to sell on ebay. You have to understand how to get people to buy your item instead of from the hundreds or thousands of competitors out there. For me, I am not the cheapest seller in my niche. I sell at higher prices than my competitors. So why do people buy from me vs. the other guys I am competing with? It comes down to a couple of points. First, I follow all of the ebay rules. Ebay will tell you exactly how to get sales. The problem is most people don't have the time or inclination to follow the guidelines ebay has set up to help sellers. This is the first step in being a successful seller. Follow what ebay wants you to do to the letter.
Next, you have to have exceptional customer service. The phrase 'The customer is always right' is something ebay lives and breathes, so you had better do the same. Yes it sucks when we get returns, but it is no different that what retail stores go through. Accept it and move on. It's nothing personal, it's just a part of doing business. Get the item back and resell it. It sold once, it will sell again. Feedback is your lifeline. While most buyers pay little attention to it, ebay pays very close attention to it. Their search engine, Cassini, uses it to weigh what sellers go to the front of the search line. Get bad feedback and you move to the back of the bus until you redeem yourself.
While those two points are a simplification, they are the two top items to keep track of. Do your research and learn the other factors ebay uses to score your listings against other sellers. Trust me, you'll be glad you did! Follow the guidelines and watch your sales take off.
Now for the meat. How do you sell a million dollars on ebay? It really is a simple formula. Ready for it? If you sell an item for $1, then all you have to do is sell one million of that item. See? Simple. Now no one is going to do that, but you get the idea. If your item sells for $10, sell 100,000. If it sells for $50, sell 20,000 and so on. It's that simple. It's a volume game. The higher your sale price, the less you need to sell to get that million dollars. So what's stopping you? As you sell you gain confidence and begin to grow. Follow your instincts and get those sales! Quit waiting for the lottery or a rich relative to kick the bucket. There is plenty of cash out there for the taking. You just have to figure out how to get it!
Have fun and let me know when you make it big!
There is no real secret to selling a million dollars on ebay. Of course people are tempted by all of these courses that promise to reveal insider 'secrets' to accomplishing this goal. And of course that information comes at a price, and usually a hefty one at that. It's all smoke and mirrors. A lot of reading and regurgitating information that is already freely available if one has the patience to look for it. I'll give you the real secret. The real 'insider' information that will transform your life forever. you have but to read on!
First, you must know how to sell on ebay. You have to understand how to get people to buy your item instead of from the hundreds or thousands of competitors out there. For me, I am not the cheapest seller in my niche. I sell at higher prices than my competitors. So why do people buy from me vs. the other guys I am competing with? It comes down to a couple of points. First, I follow all of the ebay rules. Ebay will tell you exactly how to get sales. The problem is most people don't have the time or inclination to follow the guidelines ebay has set up to help sellers. This is the first step in being a successful seller. Follow what ebay wants you to do to the letter.
Next, you have to have exceptional customer service. The phrase 'The customer is always right' is something ebay lives and breathes, so you had better do the same. Yes it sucks when we get returns, but it is no different that what retail stores go through. Accept it and move on. It's nothing personal, it's just a part of doing business. Get the item back and resell it. It sold once, it will sell again. Feedback is your lifeline. While most buyers pay little attention to it, ebay pays very close attention to it. Their search engine, Cassini, uses it to weigh what sellers go to the front of the search line. Get bad feedback and you move to the back of the bus until you redeem yourself.
While those two points are a simplification, they are the two top items to keep track of. Do your research and learn the other factors ebay uses to score your listings against other sellers. Trust me, you'll be glad you did! Follow the guidelines and watch your sales take off.
Now for the meat. How do you sell a million dollars on ebay? It really is a simple formula. Ready for it? If you sell an item for $1, then all you have to do is sell one million of that item. See? Simple. Now no one is going to do that, but you get the idea. If your item sells for $10, sell 100,000. If it sells for $50, sell 20,000 and so on. It's that simple. It's a volume game. The higher your sale price, the less you need to sell to get that million dollars. So what's stopping you? As you sell you gain confidence and begin to grow. Follow your instincts and get those sales! Quit waiting for the lottery or a rich relative to kick the bucket. There is plenty of cash out there for the taking. You just have to figure out how to get it!
Have fun and let me know when you make it big!
Wednesday, April 26, 2017
What Kind Of Seller Are You?
When selling on ebay, most new sellers take the shotgun approach. They find items they have and start trying to sell them. When something sells, they try to find another item like it and try to sell that one. Lather, rinse, repeat. That's the typical cycle. The problem is that sometimes that one sale on that one item is all you will ever get. You just happened to list it at the right time when that one seller was looking for it. It may take another year or even longer for someone else to come searching for that item. If you do that enough times you wind up with a bunch of stale inventory. So what is the best approach in selling?
There are typically two types of sellers. I liken these to two types of retail stores. You have Walmart that sells a wide range of products. They try to be all things to all people. There are also ebay sellers who do the same thing. The down side to this is that you need a ton of space to be able to offer a wide enough range of products in order to keep a consistent flow of income coming in.
The second type of seller is specialized. Kind of like Victoria's Secret. They sell one type of item. They found a 'niche' of products that sell very well. They have a ready set of customers who look for their product. They can turn inventory quickly and therefore do not need a huge storage area to accommodate their business. You see a lot of that in the mobile phone and accessories categories. Some people sell cases while others sell power adapters. They typically sell a product they are familiar with and knowledgeable about.
Neither approach is better than the other. It can work for any seller. The difference comes in with how you prefer to run your business. If you are new and not sure what to sell, then the Walmart approach may be the best way to start. It allows you to test several types of products before settling on a niche item. Of course there are those sellers who love the treasure hunt and will never be a niche seller. I was this type of seller for many years. I was always on the hunt for the next treasure. I would find a hot seller and ride it until it cooled down, then pick another. All the while I just listed other stuff I thought might sell.
The point of all of this is to help you figure out what type of seller you want to be. Know the pros and cons of each type and jump feet first into selling. Don't sit back and wait for the perfect product to land in your lap. You may wind up waiting your life away. Start listing items and you may just end up finding a real gem hiding in the array of products you are listing!
There are typically two types of sellers. I liken these to two types of retail stores. You have Walmart that sells a wide range of products. They try to be all things to all people. There are also ebay sellers who do the same thing. The down side to this is that you need a ton of space to be able to offer a wide enough range of products in order to keep a consistent flow of income coming in.
The second type of seller is specialized. Kind of like Victoria's Secret. They sell one type of item. They found a 'niche' of products that sell very well. They have a ready set of customers who look for their product. They can turn inventory quickly and therefore do not need a huge storage area to accommodate their business. You see a lot of that in the mobile phone and accessories categories. Some people sell cases while others sell power adapters. They typically sell a product they are familiar with and knowledgeable about.
Neither approach is better than the other. It can work for any seller. The difference comes in with how you prefer to run your business. If you are new and not sure what to sell, then the Walmart approach may be the best way to start. It allows you to test several types of products before settling on a niche item. Of course there are those sellers who love the treasure hunt and will never be a niche seller. I was this type of seller for many years. I was always on the hunt for the next treasure. I would find a hot seller and ride it until it cooled down, then pick another. All the while I just listed other stuff I thought might sell.
The point of all of this is to help you figure out what type of seller you want to be. Know the pros and cons of each type and jump feet first into selling. Don't sit back and wait for the perfect product to land in your lap. You may wind up waiting your life away. Start listing items and you may just end up finding a real gem hiding in the array of products you are listing!
Thursday, September 15, 2016
Long Tail or Quick Sale
When I was heavily into ebay, I wanted to get my product up and sold with as much profit as I could, in the least amount of time. I wanted quick inventory turn. As I started to dabble with amazon FBA, I started to learn about long tail sales and how I should be using them. So what exactly is a long tail sale, and why would I want to use it? Let's dig a little deeper into this, shall we?
So what is a long tail sale? Long tail refers to an item that you sit on for an extended amount of time. Think of a house or a car, big ticket items. Most generally, these items take time to sell because of their price point. The more expensive something is, the longer it takes to sell it. Conversely, the cheaper something is the quicker it sells. This is a normal sales cycle, and all retailers know it. When they have long tail items that have exceeded their threshold for acceptable time frames, they will run a sale to try and move the inventory. The key is knowing what to buy and how long to hold it.
My strategy for long tail sales is fairly simple. The longer it sits, the more I need to make. Let's take a look at a text book as an example. Text books are generally only going to sell really well twice per year. Text books will generally have a high resale amount. So you look at a text book and see the rank is 3.5 million. Not such a good rank, and most people would pass on it. It indicates a slow moving item. Now let's dig a little deeper on this book. We see that we can purchase this book for $1.99 at a thrift store. We know the rank, and we can see the selling price right now is at $129.95. Now the trick is knowing if this price is going to remain steady, drop or increase as text book season begins. More than likely it will go up. So for a $1.99 investment, and maybe 5 or 6 months of waiting, I get a hefty profit on that buy. Not too shabby considering storage fees on a book is fairly small.
Now take another item you purchase for $1.99. Rank is 1 million, and the current selling price is $14.95. Is this a good long tail candidate? Most likely not. Unless it is a very small, lightweight item you are going to rack up storage fees that will start eating into the profits on this item. FBA fees on this item are going to be at least $4 at a minimum, and probably more like $5. So take out your initial cost, the FBA fee and you are left with $8.96. If your storage fees are $0.60/mo, and it sits for six months, you are now down to $5.36. Take out the cost of FBA stickers and inbound shipping fees and you are down under $4 profit. Go over 6 months and you are going to get hit with long term storage fees and now you are probably under $3 profit. Not so attractive now is it?
You really need to understand your sales funnel as it pertains to your profit/loss. You have to know what your fees are going to be the longer something is going to sit in the warehouse. Amazon is really a numbers game, and with a few exceptions it is also a quick turn game. People who can turn inventory very quickly are the ones who generally do very well. The other segment that does really well are those who can afford to play the long tail game. I know sellers who only buy long tail items and are willing to wait a year or two for a payout. How they manage it is they have a huge inventory. Eventually enough time passes and these items start to hit their sales time frame and they will have huge profits on almost a daily basis.
With ebay, it's a little different ball game. Long tail still works, however you are now dealing with storage limitations. Ebay is another venue where people want in and out with a quick inventory turn. The same rules are going to apply for the most part, it's just a different angle. Ebay is going to charge a fee for listing the item. Even if you have a store, the cost is divided by your monthly store allocation. With a premium store, it is costing you $0.06 each time you list the item. Not a huge cost, but an expense nonetheless. My question is always "can I afford to use the shelf space for this, or can I get more inventory for the same money"? I also look at how much alternate inventory I can buy with the cash I am going to tie up into this item.
An example is a pair of designer shoes. When I sold shoes I would look at a pair of shoes I could buy for $89. Now my normal channel for sourcing would have shoes in the $5 - $10 range. So now I have to figure out if the profits on that $89 pair of shoes was going to exceed the profits I could make on selling 8 - 10 pairs of the lower priced shoes. Let's say my average sale price on the lower end shoes was $24.95. After all fees, I would have a profit of about $10 - $13. Multiply that by say 8 pairs of shoes and I have a profit of between $80 and $104. So now I know I have to sell these $89 shoes for at least $200 in order to make the same amount of profit. Not only that, but the lower end shoes are going to sell in a month or two where the higher end ones may take 6 months. Which is the better deal? For me, the lower end shoes. If I were to buy the higher end shoes, I would want to sell them for at least $275 to make it worth my while.
If you can stomach the wait, and the amount of cash investment you are going to be hanging out for a year or two, then this may be a great strategy for you. If you need to turn inventory to generate income, then this is probably not going to be a good place for you to invest your money. So the next time you are sourcing and you find something with a high rank, or is a slow seller dig a little deeper. See if the return is going to be worth the wait. You may be surprised at what you will find.
So what is a long tail sale? Long tail refers to an item that you sit on for an extended amount of time. Think of a house or a car, big ticket items. Most generally, these items take time to sell because of their price point. The more expensive something is, the longer it takes to sell it. Conversely, the cheaper something is the quicker it sells. This is a normal sales cycle, and all retailers know it. When they have long tail items that have exceeded their threshold for acceptable time frames, they will run a sale to try and move the inventory. The key is knowing what to buy and how long to hold it.
My strategy for long tail sales is fairly simple. The longer it sits, the more I need to make. Let's take a look at a text book as an example. Text books are generally only going to sell really well twice per year. Text books will generally have a high resale amount. So you look at a text book and see the rank is 3.5 million. Not such a good rank, and most people would pass on it. It indicates a slow moving item. Now let's dig a little deeper on this book. We see that we can purchase this book for $1.99 at a thrift store. We know the rank, and we can see the selling price right now is at $129.95. Now the trick is knowing if this price is going to remain steady, drop or increase as text book season begins. More than likely it will go up. So for a $1.99 investment, and maybe 5 or 6 months of waiting, I get a hefty profit on that buy. Not too shabby considering storage fees on a book is fairly small.
Now take another item you purchase for $1.99. Rank is 1 million, and the current selling price is $14.95. Is this a good long tail candidate? Most likely not. Unless it is a very small, lightweight item you are going to rack up storage fees that will start eating into the profits on this item. FBA fees on this item are going to be at least $4 at a minimum, and probably more like $5. So take out your initial cost, the FBA fee and you are left with $8.96. If your storage fees are $0.60/mo, and it sits for six months, you are now down to $5.36. Take out the cost of FBA stickers and inbound shipping fees and you are down under $4 profit. Go over 6 months and you are going to get hit with long term storage fees and now you are probably under $3 profit. Not so attractive now is it?
You really need to understand your sales funnel as it pertains to your profit/loss. You have to know what your fees are going to be the longer something is going to sit in the warehouse. Amazon is really a numbers game, and with a few exceptions it is also a quick turn game. People who can turn inventory very quickly are the ones who generally do very well. The other segment that does really well are those who can afford to play the long tail game. I know sellers who only buy long tail items and are willing to wait a year or two for a payout. How they manage it is they have a huge inventory. Eventually enough time passes and these items start to hit their sales time frame and they will have huge profits on almost a daily basis.
With ebay, it's a little different ball game. Long tail still works, however you are now dealing with storage limitations. Ebay is another venue where people want in and out with a quick inventory turn. The same rules are going to apply for the most part, it's just a different angle. Ebay is going to charge a fee for listing the item. Even if you have a store, the cost is divided by your monthly store allocation. With a premium store, it is costing you $0.06 each time you list the item. Not a huge cost, but an expense nonetheless. My question is always "can I afford to use the shelf space for this, or can I get more inventory for the same money"? I also look at how much alternate inventory I can buy with the cash I am going to tie up into this item.
An example is a pair of designer shoes. When I sold shoes I would look at a pair of shoes I could buy for $89. Now my normal channel for sourcing would have shoes in the $5 - $10 range. So now I have to figure out if the profits on that $89 pair of shoes was going to exceed the profits I could make on selling 8 - 10 pairs of the lower priced shoes. Let's say my average sale price on the lower end shoes was $24.95. After all fees, I would have a profit of about $10 - $13. Multiply that by say 8 pairs of shoes and I have a profit of between $80 and $104. So now I know I have to sell these $89 shoes for at least $200 in order to make the same amount of profit. Not only that, but the lower end shoes are going to sell in a month or two where the higher end ones may take 6 months. Which is the better deal? For me, the lower end shoes. If I were to buy the higher end shoes, I would want to sell them for at least $275 to make it worth my while.
If you can stomach the wait, and the amount of cash investment you are going to be hanging out for a year or two, then this may be a great strategy for you. If you need to turn inventory to generate income, then this is probably not going to be a good place for you to invest your money. So the next time you are sourcing and you find something with a high rank, or is a slow seller dig a little deeper. See if the return is going to be worth the wait. You may be surprised at what you will find.
Wednesday, September 14, 2016
Know your numbers!
When I started selling, I gauged my success on whether I had cash left over after a sale. Did I get my original purchase price back as well as covering any fees? If so, then I was good to go. As I started growing my business, things got a little muddled and I knew I had to do something to get things organized. I also knew that I was going to have to up my game to a full fledged business as my income rose. Keeping track of tax information seemed rather daunting. But it really is fairly simple to track all of this with a simple spreadsheet.
There are certain things that have to be tracked for taxes, and some things you don't think about that need tracked as well. Things like mileage, meals while out sourcing, cost of goods, sales tax paid, etc. It doesn't take long to loose control if you're not organized. And the last thing you want is to have to pay more taxes than you should because you got lazy. Paying lower taxes is like getting a raise! So how do you track all of this in an easy to follow format?
First you are going to need a spreadsheet program. Either Microsoft Excel, Open Office spreadsheets, etc. will do the trick. Next you are going to want to make a couple of "books" within the spreadsheet. Books are the tabs along the bottom that allow you to have multiple spreadsheets in one file. One would be named mileage, one expenses, and one for inventory. You are going to want to create formulas to be able to track totals in real time. I use this one for mileage: =SUM(B1*54.5). Put your formula in the D column. Put your date in A1 and mileage in B1. Now, move your mouse over the lower right corner of the D1 column and you will see your courser turn into a + sign. Click and drag down the D column as far as you think you'll need. I normally start with 100 rows.
As you input your mileage, you will see the D row automatically calculate the amount of your mileage deduction. Once the year is finished, you can do a auto-sum on the entire column and get the total of your annual mileage deductions. You can do the same thing for your expenses sheet. There are more calculations you can do to further simplify things, but this will get you started and give you a foundation to build on. But what about inventory? How do you track your purchases and your selling expenses? That is a little more involved, but still fairly simple.
On your third sheet, you are going to want to create several columns. Date, description, purchase price, sale price, ebay fee, paypal fee, shipping fee if you do free shipping and a profit column. I use formulas for most of these columns so I know exactly what my profit is per item. When an item sells, I open this up and enter the sale price. Using my formulas, excel then does the math to deduct my ebay fees and my papal fees in addition to subtracting my purchase price. My profit column now shows what's left. I also have an ROI column that shows my percentage of ROI. So here is an example of what should be in this sheet.
As I add in sales amounts, everything is automated so I know at a glance if I am profitable, and by how much. You can go one step further and add in a sale date and a formula to calculate how long it took an item to sell. This is good info to know how fast certain items are selling. There are a number of ways to manipulate the data. Let's say you want to know if a sale is above a certain ROI level. Simply write a formula to change the color of your ROI number if it is above say 80%. The possibilities are endless. At the end of the year, you can hand a copy over to your CPA and your job is done.
In addition to knowing your numbers, you can use this spreadsheet (or create a new one) and use it to calculate a selling price based on your ROI. Use the following formula based on cost being in the A column, and desired ROI in the ROI column, as a decimal (i.e. .75 for 75%) =SUM(A2/(1-B2)). As an example, I buy an item for $4.95. I want a 75% ROI on that item. I simply input my $4.95 into my A2 cell, and column C2 automatically sets the price to $19.80. Easy way to see what you need to charge for a product based on purchase price. If you have excel on your mobile phone, you can use this while you are sourcing to see if there is enough profit in an item to make it worth buying.
Now you know how to track your business. Having this information is ammunition you need when sourcing products to sell. It does no good to have small profit items, or items that take months to sell...unless that is a strategy. I'll cover that in another post, but for now this will suffice. Stay diligent and keep track of everything. You'll be glad you did.
There are certain things that have to be tracked for taxes, and some things you don't think about that need tracked as well. Things like mileage, meals while out sourcing, cost of goods, sales tax paid, etc. It doesn't take long to loose control if you're not organized. And the last thing you want is to have to pay more taxes than you should because you got lazy. Paying lower taxes is like getting a raise! So how do you track all of this in an easy to follow format?
First you are going to need a spreadsheet program. Either Microsoft Excel, Open Office spreadsheets, etc. will do the trick. Next you are going to want to make a couple of "books" within the spreadsheet. Books are the tabs along the bottom that allow you to have multiple spreadsheets in one file. One would be named mileage, one expenses, and one for inventory. You are going to want to create formulas to be able to track totals in real time. I use this one for mileage: =SUM(B1*54.5). Put your formula in the D column. Put your date in A1 and mileage in B1. Now, move your mouse over the lower right corner of the D1 column and you will see your courser turn into a + sign. Click and drag down the D column as far as you think you'll need. I normally start with 100 rows.
As you input your mileage, you will see the D row automatically calculate the amount of your mileage deduction. Once the year is finished, you can do a auto-sum on the entire column and get the total of your annual mileage deductions. You can do the same thing for your expenses sheet. There are more calculations you can do to further simplify things, but this will get you started and give you a foundation to build on. But what about inventory? How do you track your purchases and your selling expenses? That is a little more involved, but still fairly simple.
On your third sheet, you are going to want to create several columns. Date, description, purchase price, sale price, ebay fee, paypal fee, shipping fee if you do free shipping and a profit column. I use formulas for most of these columns so I know exactly what my profit is per item. When an item sells, I open this up and enter the sale price. Using my formulas, excel then does the math to deduct my ebay fees and my papal fees in addition to subtracting my purchase price. My profit column now shows what's left. I also have an ROI column that shows my percentage of ROI. So here is an example of what should be in this sheet.
As I add in sales amounts, everything is automated so I know at a glance if I am profitable, and by how much. You can go one step further and add in a sale date and a formula to calculate how long it took an item to sell. This is good info to know how fast certain items are selling. There are a number of ways to manipulate the data. Let's say you want to know if a sale is above a certain ROI level. Simply write a formula to change the color of your ROI number if it is above say 80%. The possibilities are endless. At the end of the year, you can hand a copy over to your CPA and your job is done.
In addition to knowing your numbers, you can use this spreadsheet (or create a new one) and use it to calculate a selling price based on your ROI. Use the following formula based on cost being in the A column, and desired ROI in the ROI column, as a decimal (i.e. .75 for 75%) =SUM(A2/(1-B2)). As an example, I buy an item for $4.95. I want a 75% ROI on that item. I simply input my $4.95 into my A2 cell, and column C2 automatically sets the price to $19.80. Easy way to see what you need to charge for a product based on purchase price. If you have excel on your mobile phone, you can use this while you are sourcing to see if there is enough profit in an item to make it worth buying.
Now you know how to track your business. Having this information is ammunition you need when sourcing products to sell. It does no good to have small profit items, or items that take months to sell...unless that is a strategy. I'll cover that in another post, but for now this will suffice. Stay diligent and keep track of everything. You'll be glad you did.
Tuesday, September 13, 2016
Diversity is King!
When I first started selling on ebay, I followed the advice of the so called ebay "gurus". I found a niche and began selling in it. I rarely ventured out of my niche. Over the years I changed niches and finally settled on one that had a ready supply of inventory in just about every thrift store and yard sale around. Life was good. I averaged about $8k a month in sales, and was profiting about $5k. Then I started hearing about amazon. I started seeing these huge sales figures and decided to see if I could pull that off as well. I took a leap of faith and jumped right in.
I took me about a month to get a real grasp of how amazon worked, but once I got it, I was off to the races! I can still remember watching my sales for one day climb by $100 every 30 minutes or so. I hit $1,200 in one day! Life was good, and I was finally on my way. I had found the secret to huge sales on amazon and life was never going to be the same again! At least that's what I thought. Reality was a much bigger bummer.
I cruised along for a year with amazon and kept a comfortable $15k/mo sales flow rolling right along. As my previous post stated, I was not looking at the real data, just the sales figures. I had cash in the bank so I figured I was profitable. I was, but not to the extent I thought. After getting a rude awakening with the assistance of Inventory Labs, I had to completely rethink what I was doing. But that wasn't the only reality check I was to get. No, my next one was the biggest hit yet.
I joined some online selling groups, and started seeing a trend that really picked up steam in Q4 of last year. People were starting these BOLO groups. Be On the Look Out, or BOLO groups were sharing items they had found at a deep discount that were selling for nice profits on amazon. As these lists grew in popularity, they got the attention of the usual suspects who know how to turn anything into a way to make money. Enter in the BOLO paid groups.
These groups charged a monthly fee and provided BOLO's daily. Of course any time you out a deal, the inevitable is going to happen. A ton of people are going to buy it, list it on amazon and then compete for the buy box. If you didn't get your inventory in quick enough, you were caught in the tail end of price wars we call a race to the bottom. There were instances that by the time my inventory hit the warehouse (2 days usually), the prices had already tanked and I was loosing sometimes $5 - $10 an item! That is huge when you are scanning product and find a deal that gives you a $15 gross profit only to see it evaporate in 2 days! But that was not the end of it. It was about to get worse.
The next wave I should have seen coming. People were outing BOLO deals so fast that a lot of the time they were gone before most people could even get to the store. But never underestimate the power of an enterprising mind to find a new way of generating income from an FBA seller. Enter the new wave of Online Arbitrage! The art of retail arbitrage only shopping via online stores. Not to be outdone, these industrious individuals figured out how to hire people from overseas (usually the Philippines) for a few dollars a day to do nothing but scour the internet for deals. They would put together spread sheets and sell these to their subscribers.
I say all of this to show that it was hard enough to find deals only to see your profits evaporate with these people pushing out their finds to hundreds if not thousands of other buyers. Not only does it shrink your profits, but now you have to source from more and more venues just to get enough inventory to keep your sales numbers up. I was getting burned out. I had to start expanding my product sourcing to more and more categories just to keep my sales up. In addition, I was having to travel farther and farther just to get enough inventory of what I was finding. This was not going as well as it had when I had started. I decided to head back to ebay.
When I started ramping ebay back up, I sat back and thought about what I had done with amazon. I had learned that with amazon you want to have as much inventory in as many categories as you can. It's what they refer to as going wide, not deep. I had always done the deep, not wide and have a niche. So what would happen to ebay if I followed the same formula as amazon? Well, it turns out I was getting the same results!
I expanded my inventory to include categories I had never really sold in over the last 15 years. As I expanded, an amazing thing happened. I was increasing my sales once again. I know there were other factors involved, but I fully believe this was the biggest change that affected my sales. I was no longer niched down. By expanding my inventory I was exposing my products to more and more potential buyers. It mad perfect sense. If you think about it, imagine going to Walmart and only finding clothing and shoes. Or going to Kohl's and finding only jewelry and housewares. There is a reason these stores sell such a diverse set of inventory items. They want to appeal to the broadest segment of the purchasing population as they can. And now I was doing the same thing!
It took selling on amazon to teach me that diversity is king. Keep your inventory as wide as possible. Sales are going to come from all sorts of different buyers with different sets of buying habits. The more you can appeal to the more sales you are going to generate. Be adventurous. Don't be afraid to try something new. Get out there and get the sales you have been missing and increase your revenue!
If you want to read my whole story, I have written a kindle book about my journey. I might release an updated version later this year which will include my journey back to ebay, but I haven't decided yet. If you have kindle unlimited, it's free to read. Otherwise it's $.99 cents.
How I sold six figures on amazon in 9 months.
I took me about a month to get a real grasp of how amazon worked, but once I got it, I was off to the races! I can still remember watching my sales for one day climb by $100 every 30 minutes or so. I hit $1,200 in one day! Life was good, and I was finally on my way. I had found the secret to huge sales on amazon and life was never going to be the same again! At least that's what I thought. Reality was a much bigger bummer.
I cruised along for a year with amazon and kept a comfortable $15k/mo sales flow rolling right along. As my previous post stated, I was not looking at the real data, just the sales figures. I had cash in the bank so I figured I was profitable. I was, but not to the extent I thought. After getting a rude awakening with the assistance of Inventory Labs, I had to completely rethink what I was doing. But that wasn't the only reality check I was to get. No, my next one was the biggest hit yet.
I joined some online selling groups, and started seeing a trend that really picked up steam in Q4 of last year. People were starting these BOLO groups. Be On the Look Out, or BOLO groups were sharing items they had found at a deep discount that were selling for nice profits on amazon. As these lists grew in popularity, they got the attention of the usual suspects who know how to turn anything into a way to make money. Enter in the BOLO paid groups.
These groups charged a monthly fee and provided BOLO's daily. Of course any time you out a deal, the inevitable is going to happen. A ton of people are going to buy it, list it on amazon and then compete for the buy box. If you didn't get your inventory in quick enough, you were caught in the tail end of price wars we call a race to the bottom. There were instances that by the time my inventory hit the warehouse (2 days usually), the prices had already tanked and I was loosing sometimes $5 - $10 an item! That is huge when you are scanning product and find a deal that gives you a $15 gross profit only to see it evaporate in 2 days! But that was not the end of it. It was about to get worse.
The next wave I should have seen coming. People were outing BOLO deals so fast that a lot of the time they were gone before most people could even get to the store. But never underestimate the power of an enterprising mind to find a new way of generating income from an FBA seller. Enter the new wave of Online Arbitrage! The art of retail arbitrage only shopping via online stores. Not to be outdone, these industrious individuals figured out how to hire people from overseas (usually the Philippines) for a few dollars a day to do nothing but scour the internet for deals. They would put together spread sheets and sell these to their subscribers.
I say all of this to show that it was hard enough to find deals only to see your profits evaporate with these people pushing out their finds to hundreds if not thousands of other buyers. Not only does it shrink your profits, but now you have to source from more and more venues just to get enough inventory to keep your sales numbers up. I was getting burned out. I had to start expanding my product sourcing to more and more categories just to keep my sales up. In addition, I was having to travel farther and farther just to get enough inventory of what I was finding. This was not going as well as it had when I had started. I decided to head back to ebay.
When I started ramping ebay back up, I sat back and thought about what I had done with amazon. I had learned that with amazon you want to have as much inventory in as many categories as you can. It's what they refer to as going wide, not deep. I had always done the deep, not wide and have a niche. So what would happen to ebay if I followed the same formula as amazon? Well, it turns out I was getting the same results!
I expanded my inventory to include categories I had never really sold in over the last 15 years. As I expanded, an amazing thing happened. I was increasing my sales once again. I know there were other factors involved, but I fully believe this was the biggest change that affected my sales. I was no longer niched down. By expanding my inventory I was exposing my products to more and more potential buyers. It mad perfect sense. If you think about it, imagine going to Walmart and only finding clothing and shoes. Or going to Kohl's and finding only jewelry and housewares. There is a reason these stores sell such a diverse set of inventory items. They want to appeal to the broadest segment of the purchasing population as they can. And now I was doing the same thing!
It took selling on amazon to teach me that diversity is king. Keep your inventory as wide as possible. Sales are going to come from all sorts of different buyers with different sets of buying habits. The more you can appeal to the more sales you are going to generate. Be adventurous. Don't be afraid to try something new. Get out there and get the sales you have been missing and increase your revenue!
If you want to read my whole story, I have written a kindle book about my journey. I might release an updated version later this year which will include my journey back to ebay, but I haven't decided yet. If you have kindle unlimited, it's free to read. Otherwise it's $.99 cents.
How I sold six figures on amazon in 9 months.
Monday, September 12, 2016
Shipping...Free or Not?
Several years ago ebay starting pushing free shipping. They were trying every promotion they could think of to get sellers to offer free shipping. I remember getting coaching calls form ebay, and each and every time they would start off the call with wanting me to switch to free shipping. Fast forward a couple years and Cassini hits. Sales started plummeting and I started experimenting with several different strategies to try and get my sales cranking again. I was willing to try just about anything.
I played with titles, I played with item specifics. I even redesigned my listings in the hopes of triggering something with Cassini to get my sales back up. Nothing seemed to work. So, being adventurous, I decided to try free shipping. I had over 1,500 listings, and I methodically went in and changed every one of them to free shipping. Guess what happened? NOTHING! Not a single change in my sales metrics. So much for free shipping!
This was also a time when I was being introduced to amazon FBA, so I let ebay just run itself without much effort from me to keep things fresh and worked on learning amazon. I saw great increases in sales revenue from amazon and decided to just let ebay sell down and keep it at a minimum. I was convinced amazon was the ticket. As with any perceived good plan, it never quite works out the way you think it does. I sure did have some good sales. I was averaging over $15k a month in sales. But I was only keeping about $4k for myself. Something just didn't seem right.
It was at this point I decided to use a program called Inventory Labs. Provided you put the correct data in, it will show profit/loss not just per item, but per category as well. Here is where the light bulb went off for me. In one particular category, I spent nearly $9k in purchasing inventory, and yet I only had $1,800 in gross profit. Talk about a serious bummer. Especially when a smaller category had cost of goods at $2,500 with gross profits of $1,600. It was at this point I started to realize the disparity between sales figures and actual profit. How I longed for the good profits of ebay.
So now I was facing a dilemma. I could continue down the amazon path and keep getting small returns for a lot of work, or I could pick ebay back up and try to figure out how I could get sales rolling again. I decided on the latter. I started thrifting and yard sales again and gradually started to see my sales pick up. I had gotten rid of free shipping and went with calculated. Some items I did flat rate on, but the majority were calculated shipping. I cleaned up my listings and made them optimized for mobile. So what was really responsible for my increase in sales?
As long as I have been selling, I have had a pessimistic attitude about buyers in general. I figured most, if given the opportunity, would screw you out of your money. For that reason I never went beyond a 14 day return policy. But this time around I figured if I was changing everything, I may as well change that. I opted for a 30 day return policy. And guess what? No buyer has taken advantage of me. I was once again building my revenue stream with ebay. So much for the free shipping!
Now I have been increasing sales by a good amount over the last few months, and as always I keep watching for news/tips just to see if I miss anything that may benefit my sales. During a recent round of research, I stumbled upon a video by a guy who was a part of the Cassini design process. He went into how Cassini worked and how your listings are filtered for searches. Cassini is dynamic and it changes based on what the buyers are demanding and looking for. What they discovered was that buyers really didn't prefer free shipping over tradition shipping. Imagine that! It only took them 2 years to figure it out!
So now I knew that free shipping had nothing to do with my sales. I did however feel that the increase in return time contributed to my increase. I think an increase in return time from 14 to 30 days helped get my sales back on track. There were other factors, but I think this was the start of that upward trend. Never just accept that what ebay is telling you is the gospel. There are a few things that are, such as optimized for mobile, but policies, and business practices are not. Experiment and see what works in your store. You may just find the one item you never really thought about could be the restriction in your sales funnel.
I played with titles, I played with item specifics. I even redesigned my listings in the hopes of triggering something with Cassini to get my sales back up. Nothing seemed to work. So, being adventurous, I decided to try free shipping. I had over 1,500 listings, and I methodically went in and changed every one of them to free shipping. Guess what happened? NOTHING! Not a single change in my sales metrics. So much for free shipping!
This was also a time when I was being introduced to amazon FBA, so I let ebay just run itself without much effort from me to keep things fresh and worked on learning amazon. I saw great increases in sales revenue from amazon and decided to just let ebay sell down and keep it at a minimum. I was convinced amazon was the ticket. As with any perceived good plan, it never quite works out the way you think it does. I sure did have some good sales. I was averaging over $15k a month in sales. But I was only keeping about $4k for myself. Something just didn't seem right.
It was at this point I decided to use a program called Inventory Labs. Provided you put the correct data in, it will show profit/loss not just per item, but per category as well. Here is where the light bulb went off for me. In one particular category, I spent nearly $9k in purchasing inventory, and yet I only had $1,800 in gross profit. Talk about a serious bummer. Especially when a smaller category had cost of goods at $2,500 with gross profits of $1,600. It was at this point I started to realize the disparity between sales figures and actual profit. How I longed for the good profits of ebay.
So now I was facing a dilemma. I could continue down the amazon path and keep getting small returns for a lot of work, or I could pick ebay back up and try to figure out how I could get sales rolling again. I decided on the latter. I started thrifting and yard sales again and gradually started to see my sales pick up. I had gotten rid of free shipping and went with calculated. Some items I did flat rate on, but the majority were calculated shipping. I cleaned up my listings and made them optimized for mobile. So what was really responsible for my increase in sales?
As long as I have been selling, I have had a pessimistic attitude about buyers in general. I figured most, if given the opportunity, would screw you out of your money. For that reason I never went beyond a 14 day return policy. But this time around I figured if I was changing everything, I may as well change that. I opted for a 30 day return policy. And guess what? No buyer has taken advantage of me. I was once again building my revenue stream with ebay. So much for the free shipping!
Now I have been increasing sales by a good amount over the last few months, and as always I keep watching for news/tips just to see if I miss anything that may benefit my sales. During a recent round of research, I stumbled upon a video by a guy who was a part of the Cassini design process. He went into how Cassini worked and how your listings are filtered for searches. Cassini is dynamic and it changes based on what the buyers are demanding and looking for. What they discovered was that buyers really didn't prefer free shipping over tradition shipping. Imagine that! It only took them 2 years to figure it out!
So now I knew that free shipping had nothing to do with my sales. I did however feel that the increase in return time contributed to my increase. I think an increase in return time from 14 to 30 days helped get my sales back on track. There were other factors, but I think this was the start of that upward trend. Never just accept that what ebay is telling you is the gospel. There are a few things that are, such as optimized for mobile, but policies, and business practices are not. Experiment and see what works in your store. You may just find the one item you never really thought about could be the restriction in your sales funnel.
Subscribe to:
Posts (Atom)