Seller led: Turning your eBay side hustle into full-time income

[Music] hi i'm jessica omen and i'm so excited to bring you this ebay open session turning your ebay side hustle into full-time income before we get started just a little note if you have any questions use the q and a feature on bevy it's just on the right hand side of your screen you'll see a session q a function and you can answer you can enter your questions right there so there are three main areas that in my experience hold the key to scaling up your ebay business from a side hustle to a full-time business that supports the lifestyle that you want to leave you must learn first how to value your time in actual dollars and how to incorporate that into your business as a real expense how to source more valuable items and improve your average selling price and that could mean considering different or additional ways to source your inventory and finally how to build scalable processes that maximize productivity and protect your business as you grow you'll need people to support you like employees or contractors and you need to make it easier for them to help you and do things your way this is going to help make your business more sustainable in the long term so just before we get started i want to tell you a little bit more about myself i have a masters of business administration which i got in 2009 and i still maintain a small high side hustle as a university professor teaching business to undergraduate and graduate students here at a local university i'm a former business plan writer and strategy consultant and i used to help startup businesses lay the foundation for long-term success mainly by employing many of the tactics i'll be talking to you about today the company i have now is called storage warrior it's been a full-time business for me since 2017 in 2014 for my husband who runs it along with me we were honored to receive ebay canada's micro multinational entrepreneur of the year in 2019 and the following year in 2020 we were also inducted into ebay canada's 25-year hall of fame so we're very proud of these accomplishments we have been maintaining a multiple six-figure ebay business for three straight years and we're well into our fourth and over these years i've put my business education and experience into building the company that me and my husband wanted earning plenty of money to support the lifestyle of flexible work and freedom from work that we were both seeking in our lives it's still a work in progress no business is ever perfect and that's exactly the way it should be so if you want to know if this session is for you well if you're currently employed and you'd like to quit your job and replace it with your ebay business or maybe you're already getting started full time on ebay but you want to grow and scale up your business to earn more revenue and ultimately more profit this is definitely for you if you want to begin to set up your business so you can take time off and still make money while you're not working this session is for you if you want a reliable long-term business that creates consistent income to support your lifestyle this is for you and if you prefer to keep your ebay business tiny that's absolutely fine you might still get some really good tips here because these concepts should apply to businesses of all sizes so let's get right into the main content part one of our engine of our agenda is to put a price on your time this is so important for determining what you should continue doing in your business as you grow what activities are ultimately worth the time for you to do in the long run and what you should eventually be paying other people to do have you ever driven 20 minutes in either direction to save on shipping costs by picking something up or maybe you're the type of person who would spend an hour flipping coupons to save three five or ten dollars at the grocery store these activities are sometimes worthwhile from a financial standpoint but they are rarely worth the money that they save you when you're trying to scale and grow a business so if you do them there should be some additional non-monetary value to those activities we all tend to undervalue our time and that's one of the main points i want to make here many of us are thrifters we're savers we're people who are wired to save money all the time and we all know that feeling of getting a great bargain but sometimes these tiny little savings take longer than they are worth so by putting a price on your time you begin to prioritize higher value activities in your business and we'll talk about what some of those things are and do away with those things that aren't directly producing a profit by having you do them remember time is a finite resource and it's important to maximize how you spend it because you can't get it back so you might as well do valuable things now to address that final point on the slide i hear people say all the time well i made a dollar profit that's still profit well sort of i sure hope those people incorporate the cost of their time into their profit margin because if they didn't then all of those one dollar profit sales actually come at a loss so how do you decide what your time is worth there's a lot of different ways to calculate it but i'm going to talk about two of them here one is a flat hourly rate of what you feel like your time is worth and the other is a percentage based approach let's look at the flat rate one first if you are or were earning a salary in a job work out what that salary was paying you per hour now double it that is the absolute minimum dollar amount that your time should ever be worth per hour and why is that you might ask well there's a couple of things first of all there's a good chance you're going to be working many more hours at your ebay business than you did at your job especially early in your growth phase when you're doing most of the work yourself the second reason you need to double that hourly wage is because your business is going to have different expenses and taxes associated associated with it that may be different or higher than what you had to pay out in your previous job for example your ebay income might put you in a different tax bracket in your state or province your home expenses may increase as a result of your ebay business if you work from home you may have increased utility expenses or things like that your previous job if it came with extended health benefits retirement contributions or any of those other types of parts you need to be able to replace these two you don't want to abandon them and your new wage should should be able to cover them the second one is a percentage based approach called profit first and the idea here is that you keep a percentage of the gross profit in your business for yourself and you make that a mandatory expense in fact you expense it out before you expense anything else in your business remember if you're not paying yourself your profit margins are not accurate you have to be able to pay yourself a living wage all the time now most small business owners use their profit as their income and if there's no profit then there's no income and we don't want it to be like that instead taking a percentage of your gross profit and we define that as profit after direct cost like fees and inventory costs is for you always and you pay yourself before you pay other expenses now to structure it you can set up a separate bank account for this and each time ebay would send you a payout when that appears in your bank account you could transfer over a percentage of that money to a separate account and that becomes your income account now ideally you're using some combination of these two things you know what your time is worth per hour and you take a profit percentage roughly equal to that amount in dollars from an accounting or book peaking bookkeeping perspective though it might not look exactly like this uh for example i pay myself 25 hours a week at minimum wage on payroll but i take profit from the business separately to fund my personal life and that is real income taxable income there's a lot of different ways that you can structure it it all depends on how you like to operate your business it also depends on the um accounting and tax rules where you live and i can't comment on specific business structure as i'm only familiar with canadian entities but in the end somewhere somehow you need to be able to pay yourself and fairly now you have to also make a decision about what's fair to you so for me it's about 50 an hour so i do things that will produce that much value in my business as often as i can otherwise i or outsource them to somebody else and i work on other things instead or i may make the choice not to work at all now it's important to know that the value of your time will and should evolve as your business does if you're paying yourself first before your other expenses especially if you're using that percentage method your pay grows as your business grows automatically and as your business grows the type of work you do is going to shift you may do less day-to-day stuff and more essential strategic or magic managerial activities these are key activities to the growth of your business and really only you can do them as the owner so they have huge value to the company and they need to be compensated appropriately so you can always change the value of your time over time and increase it or shift it as you see necessary as long as you're always paying yourself something now as this growth happens you're going to need people so you can focus on the most valuable activities in your business and we're going to address this a little bit later in the presentation but it's just important to remember that this is a natural progression and it's something that's key to the long-term growth and scalability of your business so now we'll move on to the second part of our agenda which is all about sourcing more valuable items so this means looking for higher value items to increase your average selling price and it also may mean shifting the way that you're sourcing so that you can buy more items at the same time now that you know the value of your time you want to make sure you're spending it wisely because remember it's a non-renewable resource so ask yourself how should you be sourcing inventory to ensure that you are earning as much as you've decided your time is worth or that the work you're doing is worth that much right now you are probably one person in your business maybe two you source items you process you photograph you list you sell you ship you pack you pick all of it yourself now that you know the value of your time what is it costing you to sell all of those items if your prices are too low you might find yourself losing money with every sale and to fix this you need to buy in bulk and increase your average selling price the more items especially high-priced items that you can get in the same amount of time sourcing the more money you can earn and that efficiency is going to increase your profit over time so we'll look at average selling price first do you know yours this is mine and you can grab this data from your ebay dashboard under your sales metrics anytime you want to see it this is mine from june 3rd to july 3rd 2021. 63 dollars and 24 cents in my business we always try to keep it over sixty dollars and you can see in this screenshot that it is up fifteen percent over may and that means that we dropped a little bit below sixty dollars and we're working on getting it back up again so first of all find out what your average selling price is and that gives you a benchmark for working on increasing it so remember it takes roughly the same effort to source process and ship a ten dollar item as a hundred dollar item so doing that once for 100 item is much more efficient than doing it 10 times for 10 10 items to earn the same revenue and once you have put all of that time into it your actual profit on 10 10 items is going to be much lower than on one 100 item as you as you add more listings at higher average prices even if you keep your total listings about the same your revenue is going to increase your amount of sales if you keep your total listings about at about the same number are going to stay you know you'll have the same amount of sales but your overall dollar value will be higher so you'll be starting to increase your average selling price so think about whether you would rather sell one uh one hundred ten dollar items or a hundred hundred dollar items many of you will say but i'm happy to sell both 10 and 100 items and that's absolutely fine what we're going here for here is averages there are lots of 15 items in my store if you look through you'll see hundreds of them but even then we try to when we list lower priced items we try to list the types of things that buyers are likely to bundle into larger orders so action figures die cast cards and comic books so we have sort of shifted our sourcing in that way so that we buy very similar items in bulk and that encourages buyers to purchase five or six items and if those are five or six items or fifteen or twenty dollars then boom we have a hundred dollar sale and sometimes we offer order discounts on totals to encourage that type of behavior and get higher sales per customer but of course we always have to be keeping an eye on profit an average selling price of a hundred dollars means nothing if it spent you if you cost uh if you spent 75 dollars to get that item after the fees you're not making very much at all so yes more valuable items will bring up your average selling price but you still have to source smart and ensure that your profit is there in my business the benchmark is five to one so we try to make five dollars for every one dollar that we spend on inventory your benchmark may be different it all depends on what you sell so let's look a little bit at shifting the way that you source and i just want to give you a few tips to increase your profit in part by decreasing the cost you pay per item so seeking large quantities of similar items helps your business in a variety of ways when you buy in bulk you know this you will often be able to pay a little bit less per item but this has a trickle-down effect to the rest of your business because if you're processing photographing listing and packaging and shipping very similar types of items all the time you can become very efficient at that and so all of the other processes in your business also become easier faster and more efficient and oh that time that's so valuable you get to spend more of it doing other things so you do want to consider your space constraints and i want to be respectful and acknowledge that for sure many people work in very small spaces in their home their garage their kitchen their dining room we've all seen and gone through that and we started in our house as well and then in our garage and eventually moved to a small warehouse if you are constrained to a small space and you still want to apply this strategy to begin buying in bulk consider just purchasing small things that you can store a lot of in a small space or think about whether and how you will be able to expand your space available space over time and incorporate that as a cost into your business my second tip is to take calculated risks and bundle stuff so sometimes we'll spend a little bit more to get a larger bundle of items even if it means including some things that we're not quite sure we're going to sell so we sell a lot of collectibles and so one of the things we'll do is go to an estate sale or somebody's home who's moving or downsizing and will buy a whole bundle of the variety of items from their home and when we do this we try to pay attention to the things that that seller really wants to get rid of and sometimes we'll incorporate those into the bundle even when they're not necessarily things that we're going to make a big profit off of because we know that by making this bulk purchase we're going to spend a lot less per item and the items that we can't sell in the long term we can donate or do something else with so it's a strategy that we use a lot and occasionally we will walk away with a small percentage of items that we realize a little bit later that we probably aren't going to be able to sell or not for very much now you can also take calculated risks with how much you spend per item i know a lot of pickers and resellers and notice that many people are afraid to spend more than a dollar or five or ten dollars on a single item again there's that idea that we all want to have a bargain but evaluate the risk of spending thirty dollars or maybe one hundred dollars even if you may not profit huge in the long term you learn something about a new category and you should be able to as you scale up and grow your business absorb those small losses associated with 30 50 or 100 items because in the long run that's not a lot of money when you look at the grand scheme of your business so i'll give you an example of a can't lose situation i was at an estate sale a couple of years ago and there was an electric guitar there in pretty nice condition they wanted 35 for it there were a lot of other pickers and resellers at the sale and nobody bought the guitar because nobody wanted to risk spending 35 on it now you don't need to know a lot about guitarists to know that if this electric guitar is functional it's pretty much guaranteed to be worth more than 35 no matter what it is or where it came from so that was a small risk and we ended up selling that guitar for a thousand dollars the third thing you might want to do is you really start to scale up is consider a line of credit to enable much larger purchases and i'm talking about purchases of ten thousand dollars and up when you're at scale in your business a line of credit brings cash flow so you don't always have to be completely out of pocket you can borrow from your line of credit pay it back quickly and you can buy a lot more things at one time you just have to make sure that you're working any interest payments on that line of credit into your expenses or ideally paying it off fast enough not to incur any interest at all if you have the space and you have processes in place to deal with that level of inventory a line of credit can enable those types of purchases so consider it and now to the last part of our agenda which is all about building efficient processes into your business and i've already hinted at this a couple of times throughout the presentation it does kind of trickle into all of the other aspects of business growth now it might sound really boring doing this and honestly it kind of is but the results you get from this work are definitely not boring so first of all let me define what i mean by efficiency and efficient process efficiency is all about getting more done in less time so we're also talking about productivity here taking that valuable time of yours that you now have a price for and squeezing everything you can out of it which in turn is going to make it even more valuable efficiency also means having more time for the business the parts of your business that you love the most we all have pieces of our business that we really don't like to do so by developing efficient processes for how to do them we find ways to do the things we dislike a little bit better so that they're finished sooner and we can get onto things that are more fun now importantly your business should be able to operate at some level without you for some period of time developing processes and documenting them properly means that your business can keep going whether if you need to be unavailable if you get sick or if you just need a temporary break so this is a long and arduous task and one that really never ends because you're always improving and changing processes as your business grows but if you have never done this before first sit down and make a list of what the key operational tasks in your ebay business are they may include sourcing organizing listing picking and packing shipping label making there may be others that i haven't put on this list so it's not an exhaustive list and think through each one of these tasks which ones take up the most time now they may be the ones that you don't like to do sometimes when we don't like to do something we drag it on as long as we possibly can or they may be things that you're just not very good at but the idea here is to go through each task in minute detail and really examine how you do everything in your business in order to find your bottlenecks so for example if the value of your time is 50 an hour and it takes you an hour to make four packages you're effectively paying 12.50 to make a package and that is way too much so if that's you figure out what's taking so long are you clumsy with tape like me i'm terrible with tape invest in a product that makes that easier do you spend too much time sourcing packing materials set up an account with a supplier or find a source of free supplies that you can always go back to we are total supply scavengers and we have an auto parts shop two blocks from our warehouse that fills up its cardboard bin with wonderful boxes every single day and we stop by there a couple of times a week on the way to the warehouse fill up the truck continue and empty it all into our our space so it works out perfectly for us so dissect those tasks and look for ways to do them faster and this is key without sacrificing quality we obviously don't want to end up making packages so quickly that things get broken in transit and things like that so you don't want to sacrifice the quality at all but maybe there are ways you could do things a little bit faster now this is the boring part you have to write it down step by step and revise it as you need to and as your business grows that documented documentation is absolutely key we just use google docs to record our processes and just share them with people as we need to um and they don't have to be exactly perfect right off the bat because as you eventually add help into in your business and you start hiring people those people may end up doing some of the tasks in your business even better than you and they can help you revise your process and your system to make it even better so the key with this is about addressing bottlenecks and just knowing that also solving one bottleneck usually creates a new one this is called theory of constraints and you can google that if you want to learn more about it but it's a constant cycle as soon as we fix one problem it usually um magnifies another one that we might not have been seeing at first but doing this even though it goes on forever it makes your business better in the long term so remember that documentation is key to building efficiency because eventually you are going to have to hire help i know it's really scary but you have to do it eventually when you have consistently applied processes and you're doing things kind of the same way every time that's going to lead to more stability and revenue so for example we all know that listing every day is one of the best things you can do to bring in consistent sales with someone else doing listing for example you're not obligated to do that yourself all the time and you can put your attention into other very important things like sourcing or shipping as you build this revenue that's going to create more work for you more packing more customer service inquiries more label making more sourcing more organizing more cleaning in your in your available space all of that adds more work to you and we don't want you to burn out because the more work you have to do that means you need to get help before you start to stretch yourself too thin one of the issues that a lot of entrepreneurs run into as soon as they start to scale is that they continue to try and do everything themselves all the way until they absolutely can't anymore and that can lead to unnecessary stress but hiring on its own is a pretty nerve-wracking thing and i know that people are expensive training takes time you have to learn to manage people which not all of us are trained for or particularly good at and it may seem like more trouble than it's worth but you still have to be thinking long term about the scalability of your business if your time today is worth fifty dollars an hour but you can outsource somebody to do some tasks in your business just as well as you can for twenty dollars an hour then you're effectively making thirty dollars an hour having somebody work for you while you work on the things that grow your company long term so let's address the elephant in the room which is the fear of hiring maybe you've caught yourself thinking some of these things no one can do these tasks better than me i'm the expert yes absolutely you are the expert which makes you perfectly poised to be the teacher if i hire someone they'll just start their own side hustle and they'll make more money than i pay them well it's important to remember that not everybody is motivated in this way some people are very happy and they seek a stable day-to-day job it provides stable income they don't have to deal with the difficulty and the risks of entrepreneurship and so don't assume that as soon as they figure out what you do that they're going to run off and do it on their own i'm not making enough money to hire someone that's one of the most common things i hear you're probably not making enough money not to hire someone because not hiring will constrain your growth and hiring will always be kind of an uncomfortable thing it's important to hire when you're even if you're not comfortable doing it because you'll otherwise never feel ready or maybe you're thinking it takes too long to teach someone how to do it so i might as well do it myself it's important here to think long term people can also help you as i mentioned before improve your processes and help you become even more efficient as they get as good or better than you at the things that you're currently doing it's right it's true teaching somebody else to do what you do is not easy in the short term but those long term benefits are huge and it's really the only way to grow a business that runs without you when you need it too so by working on these three areas of your business you can eventually structure it to support whatever you want to do whether that's quit your job spend more time with your kids travel the world upgrade your car and stereo system whatever matters to you you can structure your ebay business to support that and give you the income you need to do it we were able to buy a brand new truck off the lot in cash we've traveled throughout the us and europe while running our ebay business and we enjoy frequent dining out and our business profits provide all of that for us we have a ways to go and the next goal of course is seven figures but i think that we'll get there if we're willing to do the hard work and i think that's important to remember is like maybe the key message here is to recall that this is a long-term game you won't scale and grow your business to the place where you want it to be in six months or 12 months it will probably take you several years and by the time you reach your first goal you may already have another one on the horizon but you can sort of minimize the peaks and valleys through developing key and efficient processes for your business helping other people learn to support you and what you do and that'll create consistent revenue for you so you can eventually have that stable reliable income that replaces your job scaling up is hard work but the results will set you free thank you for having me

2021-08-13 18:50

Other news