NK and I have been talking about profit margin.
I bought something for $100. I checked completeds on Ebay and they sell well. I knew it would go in the $200-$300 range. I came home. NK thought it was a dumb business move. He kept telling me it wouldn’t sell and I tied the money which could be used buying something else. I got scared, listed it the next day at a low starting bid $120, and a did a dumb 3 day auction over a holiday weekend. It sold for $140. In 3 days.
Now, I have bought stuff for 25 cents and it sold for $20. NK thinks I should I concentrate on those kinda things.What is your opinion?
I’d say take one such risk, against every 3 low-value items. Covers your risk, and makes your profits move faster, IMHO
Me: yup. Thats what I kinda I follow!
I agree. Do the low cost stuff instead, because this economy is so crappy, people just aren’t spending much money on stuff, even if it is a great deal.
But what the hell do I know — I don’t know anything about business!
Me: That’s also true.
Try one BIG one, like $2-300 selling for $1000!
Me: Yeah that would be ideal. to find something like that is next to impossible.
Oh but you are the queen of finding and selling. Go do it!
Hi S
Don’t worry you took a chance which is what good business people do:)! The worst case scenario Im guessing would be breaking even:)..Maybe the bids were slow because of the holiday weekend which Im guessing you might have thought the same:)..You can give it a try maybe another couple of times and be the best judge of it! Btw , I luuuuuuved that yellow chair! Let me know when I can ship you over CB’s books. I have 2 of the 4 books with me at present (other’s have been borrowed)and can send them over if you would like to read ..
Me: I dont know when I am going to get time to read. I will let you know!
I would go with NK, but mix in the $300 stuff every now and then…..
I think you shouldn’t let NK dictate. This is YOUR business. Do what feels right to you.
Me: I saw the Chinese characters and thought you were SPAM.I normally shut him up with “You list something and when it sells then you can come tell me what to do” He normally doesnt say much. I think this whole profit
Hehe, sorry. It’s my new online persona. =)
Take that risk 1 in 5 items you buy. And I disagree with NK… I am of the opinion that you have to invest before you earn. So nothing wrong with tying up the money when you are 95% sure it will sell for much more than you bought it for! You are doing great… don’t second guess yourself.
Me: Right… I am the same way.
I’ll say that it depends on your risk tolerance. If you have a high risk tolerance, go for big ticket items and if your risk tolerance is low, go for small ticket items. Of course, if the example you gave for the small item is representative of your entire population, then you have a kick-ass profit margin !!!!!! ( 98.75 % vs. 28.57%). If that is the case, I’d say go for small ticket items. You can make it up with Volume!!!More profit, less risk…that’s like the holy grail of business!!
Trust me, I’m a CPA
Me: I am emailing you right now about something.
Put him on ebay…and pour yourself one of your wonderful cocktails.
I would normally say light gains make a heavy purse.
But you know your product, so buy things which cost more.
Your judgement is sound.
Haha..I loooved Aneela Z’s reply..yeah try that..did u tell him that one of your commenter said that??? Can so see his face…hehehe
BWHAHAHAHAHAHAH I LOVE aneela z’s comment.
i think you have a great instinct for this stuff S and that you should trust your hunch!
and like someone said taking a big ticket item for every few small things should be the perfect balance. plus mostly the worst case scenario will be occasional break even. doesnt sound like a bad deal to me at all.
cheers!
Me: Thanks Abha!
I need to read your blog more.
My answer is that you need to also factor in your time. If you have a limited amount of time to spend that limits your total number of sales you can accomplish, you want to make the most money you can on each sale. If your bigger ticket items make more profit per sale, those are better with limited time. See? Tell NK that.
However, if your capital is limited, the smaller sales are better because you are going to get more profit with the same amount of money you start out with.
Hm, so I think the answer is to diversify just so you aren’t putting all your eggs in one basket. Or just do what you feel like and is fun. And tell NK *he* is a free 99 start fee auction.
Me: I wonder what keywords I will use. SmartAssed Indian Male ?:)