Today I received a message. It’s a message I’ve actually received more than one time, but this guy caught me at the right time and I laid it out for him the best I could given the time I had. So, I thought “What the hell, I’ll post it to the blog.” (With his permission, of course).
A lot of people want to try and get into the shiny object phase, and in reality, it boils down to a simple equation in order to be successful in this business.
Buy low, Sell High.
Check out the email, and the following response and let me know what you think.
Here’s the email:
I had a question, and if you’d rather not get into it that’s fine; but I just really got all the way into reselling, and I want to support my family doing this. I have been out of work for a while, and I am tired of waiting for job prospects to call me back. How do I go about making this something I do full-time without wasting my time doing things that will not make me money? I appreciate your time.
In a word… HUSTLE.
There’s definitely money to be made doing this. I do it full time myself. But beware of some of the information you see online. Everybody wants you to believe that you can just hit thrift stores and make a killing. They don’t tell you about the learning curve and the mistakes, which you’ll make plenty of. The good thing is that you probably have a smart phone, so you can look things up on eBay completed listings as you go and that should help you make less mistakes.
My recommendation would be to get a part time job to supplement your income while you build this business. The reason being is that you need to have a bankroll. Buying is the life blood of this business, so cash flow is king. It can be done without a job if you have a spouse or some other way to help support yourself, but it sure makes it easier if you have a part time job or some other form of income to live on while you build your bankroll.
I don’t know your financial situation, but I can tell you that if you don’t have money to reinvest consistently, the business will just flounder and you won’t make much. If you continually buy a $10 item and sell it for $100, then take $90 as a pay check, you’re going to plain off really quickly.
Ideally, you want to buy a $10 item, sell for $100, then go buy 10 more $10 items that you can do the same with. It’s all about money management. Unfortunately, that makes paying the bills kind of hard if that’s your only source of income. And that’s the problem I see with a lot of newer pickers/resellers.
If you can overcome that hurdle, the next huge issue will be space. In order to make a full time living, you’ve either got to be moving volume, or be a REALLY good picker that gets lucky with home runs a lot. Either way, it’s going to take space.. Make sure you assess the amount of room you have available to you.
If you’ve only got a small amount of space, you’re probably going to want to focus on items that either sell really quickly, or make you a lot of money. If you have a ton of space, then you can buy items that have lower margins (but ideally still move quickly).
The things you’re going to need in order to make good money reselling are: time, a bank roll, and knowledge. So, anything you can do to increase all of those will help. YouTube is a good start, but don’t get caught up with “shiny objects” (the latest and greatest). This business truly is as easy as buying low, selling high.
Someone who gets out there and buys stuff for a great price, then lists it on eBay or CL or any number of other outlets, and sells it off as quick as they can, then repeats, will make more money than most of the pickers here on youtube. People just get caught up doing stupid stuff that doesn’t make them money. Surfing Facebook doesn’t put money in your pocket. Limit your time spent on tasks like watching YouTube videos to only maybe 15-20% of your time when new (and focus on solid knowledge) and multi-task (list items while listening, etc) if you can.
When you first start, I would focus on the “quick buck”. It’s better to double your money on something quickly, even if you could hold out for a little more later, because you’ll be able to reinvest that money into other items and “double down” (i.e. build your bankroll) much quicker. That’s a tough one for a lot of people to get. They want to hold out for as much as they can get, but that’s actually costing them money. Inventory is never the problem… it’s everywhere. Selling your items is the bottle neck.
I’ll give you an example.
Slow Dime Version:
You buy a $25 game system
Market value is $100 if you really hold out
You wait a month to sell it, but get your $100.
Monthly profit: $75 (minus selling costs)
Quick Nickel Version:
Same $25 game system
You sell it in a week for $75 because it’s a good deal for someone else
Then you reinvest that $75 into 3 more $25 items and sell all of those for $50 each throughout the rest of that month.
Monthly profit: $50 (game system profit) + $75 (3 additional $25 items profits) = $125
Granted, that’s a very simplified version, but it’s how it happens in real life. The quicker you can turn your money over, the faster it multiplies.
I’m not saying sell stuff just above your cost. Price it competitively, but make it a great deal for someone else so it moves fast. You get happier customers because they got a good deal, and you move your money faster.
The same can be said for items you messed up on. If you screwed up and spent $100 on an item that is only worth $75.. take your lumps and get your $75 back out of it as quick as you can, and record the loss for your taxes.. Then take that $75 and parlay that into a couple of wins.
Fail Fast. Learn. Move on.
Holding onto a dud just costs you cash flow and other opportunities that could make you money. Dump the pride and get out of the item as quick as you can so you can go back to making money.
WHEW! Bet you didn’t expect an entire book.. haha.
Hopefully that helps you out.
So, there it is, folks. Let me know what you think in the comments below! Hopefully I’ve been able to help some of the other guys (and gals) out with this post. If you have any questions, let me know below! I kind of like doing these as posts. 🙂