This income report is a week overdue, but not as late as some of the others have been since my hiatus. Now that things are looking much better on the personal front, I am trying to get back into the groove of blogging and posting more than just income reports. There is quite a bit that I want to say, but there just aren’t enough hours in the day to sit down and write everything out.
…but I digress.
The month of May was very eventful for us! As I stated in April’s income report, there were a lot of new changes on the horizon for us, starting with our desire to incorporate. I am proud to report that we are officially an S-Corporation as of May. I wasn’t expecting this to happen until around June, but I am glad it happened when it did. At the moment we are still finalizing things like planning our first organizational meeting and we waiting to hear back from our insurance broker regarding business insurance and worker’s compensation insurance for the employee that we would like to hire.
There are also quite a few things that must be crossed off our list before we can hire our first employee and I plan to document that process in a completely different blog post.
In other news, I am also proud to report that we stuck to our guns about going on a spending freeze! I didn’t elaborate much on this in last month’s income report, but there were two (2) reasons for this spending freeze:
- We have way too much money tied up in inventory that either needs to be damaged out or sold on eBay
- We want to start saving money to purchase a truckload of liquidated merchandise (more about this below)
Thanks to the buying/spending freeze, we are actively working towards both goals and we are seeing great results.
As I usually preface in most of my income reports, the figures that I report below are from part-time re-selling. The hours that I put in fluctuate from 2 to 15 hours per week. My first and full-time job is my family and my home. I occasionally have the help of my husband and that equates to approximately 1 to 6 hours per week. No week looks the same for us. Re-selling is something that we both do on the side and unless our circumstances change, it will remain a part-time venture. With that in mind, if you can dedicate full-time hours to re-selling, your numbers will in all likelihood be higher than those that I report on this blog.
With that out of the way, let’s jump into the numbers…
It has been some time since I included any eBay earnings in my income reports. I pretty much left eBay alone for a couple of months and as a result, I was on the verge of losing my “Powerseller” and “Top Rated” badges from a lack of selling. Thankfully, I was able to salvage things by listing and selling on eBay during the month of May and believe it or not, we actually had a decent month in terms of eBay sales. I can only attribute this to the fact that Hubby and I made it our mission not to purchase any new inventory for Amazon in order to tackle the mounds of lingering eBay inventory that we have.
Most of the items that I sold this month were from large liquidation purchases that we made back in January. To give you a little back story, Hubby and I got our first taste of buying “store returns” from a new supplier/liquidator in the early part of January. Our small test buy proved to be very profitable since most of merchandise that we purchased and shipped to Amazon sold out within 48 hours of hitting Amazon’s warehouse and very little had to be damaged out. After that experience we placed another small order and when we had similar results, my husband suggested that we make a much larger purchase. Unfortunately, that may not have been the most well thought out move on our end because I will admit that I went a little overboard at Hubby’s urging. Ultimately, we wound up with a good mix of at least 400 items that were customer returns. After processing the merchandise, we separated what could be sold immediately (on Amazon) and we boxed everything else up to be sold on eBay.
…that was 4 months ago. 🙁
We have finally got around to opening those boxes and started listing those items on eBay thanks to our spending/buying freeze. They way we see it, there is at least $3k that we have tied up in inventory that can only be sold on a secondary market like eBay (or a flea market or to other re-sellers). Since we are not in a position to sell at a flea market and I don’t feel comfortable re-selling to other re-sellers without a formal place of business, eBay is our only option.
I managed to sell 32 items in May. So far, that is a record for 2015! I know that may not sound like much to others, but for me, that is an accomplishment!
Here are the numbers:
I’m excited about finally tackling our inventory. As much as I’ve been put off about listing, it actually feels good to be back into the swing of things and to hear those “cha-chings” every time we make a sale.
Now that I’m listing more, I plan to return to running more auctions. As I mentioned in previous posts, “Buy It Now” rarely works for me. There are only a select few items that I will list BIN that I know will sell quickly. Otherwise, selling via auction has made it so that we sell through most of what we list within 5 days (the average duration of our listings). If I recall correctly, we listed 35 items in May and 32 of those items sold. You can’t beat those numbers! The last thing I want or need is for inventory to linger on our premises. I want this inventory gone and I plan to make it my summer project to get rid of all eBay inventory even if it means that I have to neglect Amazon.
There will be no long-term / “wait for the right buyer” holds in our future. If an item doesn’t sell within 30 days of being listed then we will damage it out and write it off as a loss. As we have learned over the past few weeks, we have too much unsold inventory for a business our size.
Our sales on Amazon for the month of May were outstanding! This was the second post-Q4 month where we grossed $30k in sales. Prior to May, the only time we grossed $30k in sales was in December and January and those numbers are attributed primarily to the holiday buying season. This month there were two reasons for an almost $7k increase in gross sales: (1) testing a new category for liquidation merchandise and (2) getting rid of old/unsold liquidation merchandise that we’ve held on to for far too long.
Before I expound on those two points, let’s take a look at the numbers…
We sold just over 2,000 units and grossed $30,171.87. Hubby and I had bets going as to what we would end the month with. I didn’t think we’d get past $26k but he assured me that we would crack $30k and he was right.
Once again our sales this month were dominated by “beauty” items. In fact, the beauty category made up over 50% of the items we sold and almost 40% of our gross sales:
After running our year to date numbers, it appears that the “beauty” category is set to outperform our shoe sales. Our shoe sales are barely holding the lead by less than a $100 difference. I didn’t think it was possible for our shoe sales to be outperformed but apparently being able to purchase beauty items in bulk has played a significant role. It will be interesting to see if this trend continues during Q4.
As I mentioned in last month’s income report, I am revamping the way that I report my Amazon earnings. Based on May’s numbers and our estimated 35% profit margin, we took home $10k in net profit for Amazon sales and $774.15 from eBay sales.
The month of June will be an interesting one in terms of reselling since our spending/buying freeze will still be in effect for the most part. We only plan to make one large purchase and that will take place once we go back to Southern California for a graduation. During that time we also plan to visit the liquidator that I mentioned in last month’s income report.
I plan to spend most of June focusing on eBay and repricing our existing Amazon inventory so that we can clean house. One of our goals is to save enough money to purchase a truckload of liquidated/closeout merchandise. I’ve had my eye on a truckload from a particular liquidation broker for some time now but judging from past loads that have sold, the minimum spend would require at least a $20k investment for the merchandise and according to our freight broker, it would cost around $4k to have the merchandise delivered to us. Barring the fact that I don’t have the slightest idea where I would put 30+ pallets of merchandise, I’m not sure how comfortable I feel having so that much money tied up into inventory. Also, a load of this magnitude would require us to resell quite a bit of it to other resellers and we just aren’t setup to do that at this point. Nonetheless, we are working towards getting rid of existing inventory so that we can set aside enough money to make this happen — even if it doesn’t happen right now.
Like the saying goes: “A goal without a plan is nothing more than a wish.”
Until next time,