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Brainstorming Establish and organize my buying/selling.

Discussion in 'Money' started by Shaney96, Mar 4, 2018.

  1. Shaney96

    Shaney96 Active Member

    Rating points:
    94
    Action points:
    634
    Result points:
    709
    Background:
    I've been buying and selling shoes and clothing for around 2 years on multiple platforms. I've once before made an attempt to log all my transactions on an excel document, but never completed the document due to complexities. Since Christmas, I've sold most of the clothing/footwear I don't wear. My buying and selling once turned into an addiction, so I stopped it.

    Why I do it:
    - It's something I can enjoy doing. A lot of the time it brings about anxiety due to sinking too much time into it. This will be addressed.
    - I make money from doing it.
    - It helps me develop my style and fuel my Instagram. I have an interest in fashion/clothing and being able to wear so much varying clothing has helped me developed my personal style.
    - I believe there's potential to develop the basic premise of buying and selling into something bigger.

    Goal context:
    I've created a 'clean slate' from February, meaning that I've started off with £0 from February, and anything bought and sold since then has contributed to that total. Buying/selling can get convoluted if I don't keep on top of my transactions due to the seller fees and also due to where I'm buying my stuff from. Most of what I buy is from eBay and Grailed, however I've bought plenty from charity shops. This means I must log all clothing purchases from February and ensure I log all seller fees and every clothing purchase I make from shops.

    The goal:
    The goal is to make X amount of money by Y date. The figure I've got in my head is £250 by June 9th, which roughly equates to a profit of £30 a week. This may not sound like a whole lot, but consider that I would still like to purchase things for myself.

    My problem:
    I spend so much time dwelling on whether to buy things or not. I don't have a strict criteria regarding whether I should purchase something or not. The thinking usually goes like "I might like that. Maybe I'll end up wearing it a lot. If not, is there the potential to make some profit here?" It's very rare that I'll spend over £30 on something, unless it's something high-end in near-new condition, where I'm almost positive I'll be able to sell it for a good amount than I purchased it for. I'm not impulsive by any means, which is probably why I can easily spend hours trawling through items from 20+ designers I search for. I will only 'Buy It Now' if I'm positive I can make a decent profit on the item.


    What I'd like help with:
    - I feel I should only dedicate 3 days a week to searching for items on eBay/Grailed, and only an hour on each of those days. This could become confusing as auctions can end at any time on any given day. The solution to this could be to only go on eBay (outside of those 1x3 hour slots) whenever an auction is ending. The problem with this is that I can have 100+ items in my Watch List at any given point, meaning that eBay plays on my mind a lot: "When's that next auction ending" etc..
    - This brings me onto: What items should be added to my watch list? Should I only be purchasing things that I genuinely like? But then I get the anxiety of "yeah, it looks nice, but many people will be bidding on it and I don't want to risk spending a lot on something that might not look great in person."
    - Perhaps I should add a cap to how many items can be in my watch list at any point. This would mean I would have to sacrifice some items for the sake of new items.
     
  2. James

    James Host

    Buying & selling has made a lot of men very rich. This kid made a million by 15 just by retailing one, well-chosen item.

    So I wouldn't worry about it being a negative addiction by itself. If this is something you enjoy, looking for a way to harness it into success is very wise.

    From what you've mentioned so far, the primary issue is not treating it in a business-like way. There is a big difference between a hobby and a business, and that difference is not necessarily enjoyment (it seems fairly clear that businessmen like Jobs actually enjoyed their work).

    Specifically, these points:
    1. Your initial attempt at accounting was the right move. Without accounts, you don't know your profit margins, income, or anything. So you should find some way to account efficiently enough that it's not too much of a drag. This would be the first step towards making this more of a business than a hobby. You need numbers. Doesn't need to be too detailed, just $ in & out per month. Indeed as an IT guy, perhaps you could find a way to automate it (do the services you use allow you to download your transactions in some format? etc).
      • Logging stock & buy/sell times might also be a good idea, as it's clear from your previous stock-clearing goal that there's some errors being made, leading to accumulating unsold stock.
    2. You need to log hours. Get a simple clock-in clock-out app, and whenever you do buy-sell stuff, log it. You can't evaluate the worth (output) of an activity without knowing the most valuable input: time.
    3. Differentiate items for you from items to re-sell. If you're buying clothes for yourself, it's just bargain hunting for personal consumption. If you're buying it for resale, it's productive.
    4. Identify the distribution of pay-offs. What I'll expect you'll find is that a few items will pay off big, and the rest float around break-even. I call this the "payoff hockey stick" (Thiel calls it something like "the power law of returns"). It's this reason that most shops make enough to get by, whilst some players (like that 15 year old kid, or this guy) appear to fluke big money. It's why in certain marketplaces, one top product will make more money than the bottom 50% (or more) combined. If you can identify patterns where most of the pay-offs are coming from, you can then target that area more (or completely).
    Combining all that together will give you a clear, honest, real image of your buy-sell activities. E.g. you'll be able to see "OK, I spent 3 hours watching this item, and in the subsequent buy-sell loop on it, and the net pay-off was $5 -- not worth it, should stop doing that", or "I doubled my money on this, and it only took 1 hour total investment -- what's the pattern, can I find more of it", etc.

    Gathering this data will give you good indications of how to next proceed with it.
     
    Shaney96 likes this.
  3. Shaney96

    Shaney96 Active Member

    Rating points:
    94
    Action points:
    634
    Result points:
    709
    Cheers for the feedback @James.
    The most awkward part here is that there are various complexities to take into account (conversion rates, seller fees, differing P&P, packaging) to take into account, so I think it's wise for me to draft up an excel document or two whereby figures can simply be input and processed accordingly.

    What you mean by times?
    What I can learn from my unsold stock from last time is that it's unwise to buy such niche items in an attempt to resell them. Sometimes it pays off, as it has done before, but other times the stock just sits there. No matter the RRP, if the demand isn't there, it isn't going to sell for 20% of that retail price.

    Good call. In fact, I think I'll stick to only browsing on X amount of days at Y time slot. Furthermore, I'll log all the hours of my taking pictures/creating listings/sending etc., so I can eventually work out some figures regarding p/h earnings.

    Yeah, that's the hurdle I'm at: a lot of what I buy I 'kinda' like, and may wear a few times. It's rare that I get a piece that I'm wearing all the time. I'll work out some categories that purchases will fall into:

    Perhaps: "For me", "Will review upon receiving, otherwise will be able to sell for profit", and "Resell".

    The problem comes with the middle category since even things I kinda like and get cheap can be difficult to resell for profit, but this is just the risk that I believe may have to be taken if I'm going to get serious with this.

    After doing this for almost 2 years, I'm still yet to find this in concrete, unfortunately. The thing is with these online sites is that the stock is there for everyone to look at, and if there's something that's really cheap, then chances are it'll be sold very soon after it's been posted. That's why I got addicted to it a year ago: I'd constantly be re-searching different designers, hoping to find someone who's posted something ridiculously cheap that I can snatch before anyone else can.

    There are a set amount of designers I search for, indeed, and I'll try and keep track of what designers are making me more money than others.
     
    James likes this.
  4. James

    James Host

    Well it depends on what you need to know. The only truly important number is "in minus out" (profit). The final number that enters and leaves your bank account / wallet. But there can be information in shipping costs & fees, more so at low margins, in which products to target.

    Just the buy/sell times to indicate how long it sits in stock; but if you've already gained the insight from it probably not so important. Still, could be a good gauge on the quality of your buy decisions (charting stock dwell and seeing it decrease over time).

    Interesting, like "betting on the right horse".
     
    Shaney96 likes this.
  5. Shaney96

    Shaney96 Active Member

    Rating points:
    94
    Action points:
    634
    Result points:
    709
    General Update:

    - Have added all my items I'm selling onto another platform.

    - Created a Google Sheets document that has two tabs. One logs everything bought and sold for each month, and displays the profit/loss at the bottom of every month. The other is simply a list of every individual item, with the amount paid and, if applicable, the amount sold for. This second sheet helps me log the profit/loss for each individual item and displays which items have brought about the most profit.

    - I am still buying more than I'm selling. This month for example, out of 39 transactions, only 11 have been sales, and I'm down £114.40. This may sound bad, however the profit-potential for this month alone is substantial, and by next month I should see some very tangible results. Of course, since I've bought so much this month, I aim to greatly restrict the amount I purchase next month.

    - I've gotten to know all Post Office members almost personally due to how much I visit to post stuff..

    - Tonight I sold an item to someone with some fame in the streetwear world. My mind was instantly buzzing about how I could somehow turn this transaction into something that may gain me some exposure. It made me realize that, although I'm dedicated and consistent in regards to my Instagram and my buying/selling, I am seeing no growth. I do my Instagram because I enjoy it, and because I believe it will prove somehow useful in the future if I every decide I'd like to get into fashion professionally (not because there's anything special on my Instagram, but because I believe it shows some dedication to the hobby). I'd therefore like to investigate ways of growing my following or something similar.
     
  6. James

    James Host

    Might be good to set a line in the sand for total stock. E.g. 50 items max, then buying ceases. It will force you to reevaluate existing stock and how to get it sold.

    Also have a look at double entry bookkeeping. A buy isn't a loss, it's just a transfer from the cash column to the stock column -- you're only "up/down" when it's sold.
     

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