Transcription
What's up, guys? Welcome to Data Refinement!
Today, we're going to address the question I get more than any other: When can I go full-time? When can I work in my pajamas? When can I set my own schedule? When can I quit my job I don't like?
In this video, we're going to discuss five things to consider before you quit your job. So please smash the like button, consider subscribing, and we'll see you guys in the show!
[Music]
Before we get started in the video, the short answer is: I think you need to be able to sell at least 30 items a day for $600 in revenue. That's the short answer.
Listing and selling 30 items a day for $600 bucks, I think, would be the minimum level to enter into reselling. But everyone's situation is different. Your expenses might be different; your overhead might be different—might be less, might be more. But in my opinion, that's the short answer.
Restar Nirvana is where you sell and list the same number of items a day: 30 sales a day, $600 profit. You should comfortably be able to go full-time.
Don't feel overwhelmed because in this video, I'm going to give you guys five things to consider that will help you organize your resale business so you can reach that goal.
The first thing to consider is: What situation are you in? This will determine how fast you become a full-time reseller.
So, number one: eBay is your only income. You live off of eBay. You take all of your expenses and all your monthly expenses out of your eBay account. This is the slowest way because you can't reinvest as quickly.
The second way is: Let's say you have a full-time job or a part-time job, and you leave the money from reselling in it. So, let's say you sell an item for $10 for $30. You get $10 profit. Now, instead of listing one item, you list two items and you keep reinvesting it. That's the second fastest way to become a full-time reseller.
So, the first fastest is—I'm sorry, the slowest is you live off of the money. The second is you have a regular job and reinvest the profits.
Number three: The fastest way to become a full-time reseller is to also use your own money and live off of your regular income so that you're basically financing your growth out of your own pocket. This is the most risky way to do it. A lot of people do that; a lot of people run eBay off of credit cards or with money that they don't have or the loan they took from their uncle. I don't recommend that model at all.
I recommend number two: Have a full-time or part-time income coming in so you have a little bit of a security blanket, and you just reinvest the profit from the eBay store. Only take your time, learn how eBay works, and how to really sell online. Have some income coming in so that you're not so worried, and just take your time.
I think it will take between one month and one year, depending on your skill level, to go full-time. I recommend number two: Have some kind of income coming in and reinvest eBay profits and start at zero.
So, number two is figuring out how much money you need to survive. I call this your monthly nut or the total of your monthly expenses.
So, your housing, your utilities, your grocery bill, your transportation—add all that together and figure out what your minimum is. This is going to help you determine how big your eBay store needs to be.
As an example, as a single guy, I was at $2,200 a month. That's what I needed to get by. With being married, it grew to $4,500 per month, and that's because it became two people. There are some shared expenses, so you gain some expenses, you share some expenses.
$4,500 for two people in the Bay Area. When we added the baby, it became $7,700 per month. If you want to grow faster, you can earn more than $7,700 per month, all the way up to, let's say, $16,900 a month.
This amount would allow you to save $6,000. You could use that money to turbocharge growing your eBay store even faster, or you could use that money to put into something more passive, like real estate or the stock market.
A lot of what people want to do is make money doing eBay, running their own store, but eventually, they want to retire. Eventually, they want to do something more passive. So, in order to do that, you've got to earn more, save, and invest that money into something else.
Now, we're going to go over what it really takes to run an eBay store.
So, number three is: You have to master the steps of reselling.
Number one is going to be sourcing. You need to figure out how to source products profitably. You need to understand your margins—how much does everything cost? eBay gives you all the fees up front.
I have a new challenge called the 100 Listing Challenge, which is at bit.ly/100listings. This challenge will help you determine what all the fees are with eBay and help you understand what specifically you need to buy.
Once you figure out what to buy, you need to make sure that your account health is perfect. Customer service is ideal. You need to understand returns, cases, and customer service. You need to answer questions quickly.
Once you have that set up, eBay will take care of your account health, and they'll also give you traffic in correspondence to that. If you don't take care of your customers, your eBay sales will drop because eBay will not trust you with more traffic.
Once you have customer service and sourcing, next is going to be shipping. You need to understand what every single type of shipping costs and what the different parameters are for every single thing because you're going to need to save every single penny along the way so you can use that money to buy more inventory.
A lot of people are wondering: Why do people who are growing, why are they so frugal? Why do they watch every single penny? Because when you save ten cents on something a hundred times, that becomes ten dollars, and you can use that to buy ten more items. If you're spending a dollar per item, you can grow your store even faster.
Next is going to be photography. I recommend a dedicated photo station. If you have a dedicated photo station, it's going to make it a lot easier for you to be consistent with your photos.
So, my listing station is nothing fancy. It's just an adjustable height desk so that I can sit or stand. It should just be a computer. I recommend the MacBook Air M1; I have that in my description link below. It's a simple computer. I recommend Macs because they last a little bit longer.
You don't need anything fancy; you don't need a special mouse or keyboard or a double monitor or quadruple monitor. You just need a cup of coffee or even a glass of water, your computer, and you can get all of your listing done.
It's super important to understand it's not super complicated.
Then finally, you need an inventory system because you can't lose items. So, me personally, this system is sequential and numerical. I have tons of videos on how my inventory system works, but you can't lose items because that is the number one way for you to get suspended.
People are always asking: How do I get out from below standard? Essentially, you need to ship your items on time, ship the correct item, and have a lot less defects. I mean, little to no defects is really important because if you're above 0.3 defects, eBay basically takes your traffic away.
So, make sure that you understand all these different things. Master the eBay process before you go full-time because it's very difficult if eBay is your only income to master it along the way. It ends up making you take a lot of shortcuts, and you end up with a big store with really low sales.
So, don't get yourself into that situation. Make sure you maintain a one percent sell-through or one sale per 100 items before you grow.
So, number four is: Determine how big your eBay business needs to be.
Eventually, a lot of people like to be in a position where they can hire people to help. That's why I recommend 30 sales a day and at least $600 in revenue. You don't need that, obviously, to survive by yourself, but if you want to be able to afford staff, you want to move the business outside of home, you need to figure out how much money you’re making per hour, how much profit you’re making per item, and then how long do all these processes take.
I just released a video where it takes me 41 minutes to do every single part of my business. That ends up being about four minutes per item. So, if I make $5 profit per item, essentially, I'm making $5 every four minutes.
You need to figure out how long everything takes, how much profit you make per item, and if you want to afford staff or the ability to do that, you have to make enough profit to absorb that.
A lot of people want passive income. Passive income means somebody else is helping you earn that income, so you need to be able to afford that. You have to have an emergency fund; you have to have things in place so that you can really take that next step.
So, number five is: How long is this going to take?
You can figure that out based on yourself, your rate, and the types of items you sell.
As an example, each one of these shelves for me holds 1,000 items. So, for me to sell 30 items a day at $20 average profit, I would need 3,000 items. So, that essentially means three shelves of 1,000 items each.
That would help me understand how much space do I need, what kind of inventory system do I need, and what kind of sourcing do I need.
30 items a day is 900 items per month. Does that mean I need to go to X amount of garage sales, X amount of thrift stores? Do I need to order wholesale online? If I order wholesale online, I know that a bunch of the stuff may not meet eBay standards.
So, do I have a way to sell those defects at a garage sale, at a flea market? Do I wholesale those off to another reseller? It's important to understand all the different pieces you need and how big you need to be.
How long it's going to take depends on how fast your items sell. If your items are higher profit per item—in this example, I'm using between $5 and $10 profit—if your items are between $5 and $10 profit, that's great. But if it's more, then you need fewer items.
If your items sell faster than one percent a day, meaning it takes less than 100 days on average for your item to sell—which in most people's cases it will, at least in the beginning—then you need a smaller inventory.
If you sold all of your items every single month, you'd only need 900 items, which is just one shelf. You could run a business on eBay just out of a one-bedroom apartment, but you would have to have everything sell every single month for that to work.
Number six: If you really want to do this fast, this is what you would do. You would put on some headphones, listen to Iowa Tiger on repeat, and you would list for 150 hours in a row.
So, essentially, with the system that we teach in our Patreon group at patreon.com/theresellerspodcast, we teach you how to do 20 listings per hour—photography and listing.
So, let's say your average item costs $5. If you spent $15,000 up front for 3,000 pieces of clothing or whatever product that you sell, and you put your headphones on, 150 hours later, if you work your butt off, you can do it in less than one month. You could build a full-time income on eBay pretty much within 30 days.
For me, it took me 74 days when I was running the Restar Nirvana store, starting with no money and sort of taking my time learning how eBay works. It took three months. But if you really want to just go beast mode and really knock it out—3,000 items, do it all by yourself, put on a really good jam, and just get straight into it—you could do it literally in one month if you had to.
All right, number seven is: Have all your business ducks in a row.
Now, this is the boring part, but this is the important part if you really want a long-lasting business.
Number one: You need to have your taxes, bookkeeping, and accounting on point. It doesn't take that long once you've figured it out. So, join our group, tag Cheryl Miller in the Facebook group, and sign up for a couple of hours of consulting. She's a real accountant; have her set you up with a plan so that you can do your accounting in one month or one hour or less per month. It's really fast.
Next, life insurance. I use Policy Genius. For me, my personal premium is $58 a month for a million-dollar policy. This is going to encourage you to, one, be healthy, and number two, just figure out what happens to you if you can no longer work.
I think about that because I'm in charge of my family. So, what happens to me if I lose the ability to work? Life insurance is really important, and it is very inexpensive, especially if you are younger.
Next is going to be health insurance. We're going to do a totally separate video on health insurance. For me personally, I'm still on my wife's plan, but it depends on your situation. If you want to go full-time, health insurance is really important.
Next is going to be business insurance. I recommend at least general liability insurance. It is difficult to get inventory insurance on used items, but I recommend you look into insurance because you don't want one thing to wipe you out.
That's why I put the suffocation label on my packages—because I'm trying to avoid any lawsuits if possible.
Next is going to be education. You're going to need to learn all these different skills. So, the Patreon membership that I offer is tax-deductible. Any books that you read about finance are all tax-deductible. You can watch stuff on YouTube for free.
If you're going to learn your information from YouTube, I recommend getting YouTube Premium so you don't have to watch any ads. I don't watch any ads; you shouldn't watch any ads because you don't have time for that. You're trying to get as much information in as little time as possible. Upgrade to YouTube Premium. I'm not sponsored by YouTube; I'm just saying that's what I recommend as a business expense for your education.
It's really important. If you want to become a doctor, you have to go to grad school; you have to get your MD. So, you have to invest in your education. Very, very important. The cheapest form of that is going to be a book.
Next is going to be one year of emergency fund. This is in case you can't find anything good. Not everyone is going to be able to save one year of expenses. I actually saved three years of expenses before I became an entrepreneur in 2014, and it's amazing how fast I burned through that money.
So, just make sure that you have enough money to support yourself before you make the jump because it's a lot harder than people think. It takes a lot longer than people think.
Next is going to be one year of inventory. I know that sounds crazy, but you either need to have a back stock of inventory in case you can't find items, and you can build that up over time, or you need cash to be able to buy a bunch of items in case you need to really grow.
Let's say you want to get a warehouse and employees. Now you've got to really ramp it up. You need cash for inventory. Growth sucks cash. When you are in growing mode, you're always going to be broke. Once you get to a certain point and maintain, that's when you can start to take money out, but not before that.
Finally, if you decide you want to hire people, you need to spend some time learning how 1099 contractors work, learning how W-2 employees work, figuring out payroll, figuring out taxes, HR. This is really important, and I do recommend that you actually come up with some HR policies in your company.
I recommend setting up some cameras. I recommend trying to do whatever you can for training to make sure all of your employees and staff are all on the same page because now you are responsible for them and their livelihood.
It becomes ten times more complicated. That's why a lot of people who are full-time just stay full-time solo. They don't bring on other people because it becomes a lot more complicated.
I'll also tell you from personal experience: Hiring people part-time just to help you on the weekend—your niece, your cousin, your uncle, your aunt, your grandma to help you—that sucks because they're not permanent, and they're just helping you for fun.
Family relationships are more difficult because sometimes they don't work, and they still get paid. Sometimes they have different expectations. Sometimes they take your good inventory and wear it or use it themselves.
So, I recommend keeping business and family separate. If you do decide to go with your family or friends, no problem. Just have the expectations as clear as possible and hopefully in writing.
I'm looking for this from you for this much money by this time. No deadlines and no pain, no structure—you're going to have a disaster on your hands.
So, make sure you have all these business things in a row—all these business ducks lined up. It will take you some time. That's why I recommend you sign up for the annual subscription in our Patreon. That way, you can stay on track and be around like-minded people all aiming for the same goal.
I'm going to show you guys what I think really full-time reselling looks like. I'm going to put a graphic here. You can also download this or screenshot this on my Instagram. You can follow me at Daily Refinement.
This is all the things I've learned in the last five years, all condensed into one ridiculous Instagram post.
So, let's go over this.
40 hours of reseller income: You're going to make between $50,000 and $100,000 profit estimated. It's compiled by me. I'm Daily Refinement. My website, dailyrefinement.com, goes over all these processes in detail if you want to check out my website.
So, this is what I recommend: 3,000 quality items listed correctly that are at least $10 profit with proven history of sales.
So, 3,000 good items. Every time you list an item that sucks, it does not count. It has to be at least $10 profit with verifiable sales in the last 100 days. Like we said before, it needs to sell within 100 days. If you plug in a whole bunch of garbage, it will not work. It's going to bring your whole store down.
Number two, or this next part: One percent daily sale. This means with your 3,000 item store, you're selling at least 30 a day.
Next is going to be—oh, I want to clarify this: 3,000 items. Start small: 100 items, one sale; 200 items, two sales; 300 items, three sales. Slowly scale up that way you can make sure that your store is performing before you grow.
A lot of people will add three, four, five hundred items into their store, and their sales don't increase. That's a recipe for disaster. Make sure that your sales increase with your listing habit. If they don't, go back and fix it.
So, 30 new listings launched every single day, or 42 Monday through Friday, and take the weekends off. A lot of people do seven days of production in just five days, Monday through Friday.
So, I recommend building up at least a two-week draft bank. In this scenario, you're listing 210 items per week. You want 420 items in your draft.
Of course, everything I'm saying in this example right here is very difficult. I'm not saying it's easy. I've never said it was easy. There are a lot of people on Instagram and YouTube saying it's easy. That's why I'm giving you guys this rubric right here to try to build your entire business off of.
So, two-week draft bank in case you want to take a vacation every year, in case you have an emergency.
This is going to all equate to $600 minimum revenue a day and a $20 average sale price or more. Now, that's conservative. The reason why I'm using this number is because that would yield you hopefully at least a $5 profit, which is a 25 percent margin.
I think on a $10 sale, you make at least $2.50. On a $100 sale, you make at least $25. This is conservative. As you remember in the beginning of the video, I said you want $10 profit minimum. So, I'm saying sometimes you have to be willing to accept a $5 profit.
Now, again, of course, there are obvious exceptions. Sometimes you sell something for $100 profit, $200 profit—that's great. I just consider that a bonus. I'm giving you guys the most conservative, the most basic example of getting at least $5 profit, which should be doable.
Okay, next is you need a set schedule. So, you can't accidentally list 30 items a day. That's why I recommend 30 items a day because it will teach you to be really focused on what is important.
You can't accidentally list 30 items a day. You can list 5 to 10 items whenever you want, but 30 requires a dedicated set schedule.
So, that's going to end up being three hours a day or 21 hours a week on all the things we talked about earlier: customer service, shipping, photos, listing, resetting everything to zero so you can do it again the next day.
That's three hours per day. The rest of the day—five hours—is looking for the items that are in your store.
So, more than half of your day is going to be looking for items if you're a full-time reseller, in my opinion. That's a huge chunk of your day.
So, people who want to just order it online, be prepared for it not to work because somebody has already sorted through that inventory. They're just giving you sort of the remnants of the—they keep the good stuff and send you the basics.
So, that's more difficult. You have to spend more than half your week looking for great items, in my opinion, if you really want to excel.
Next is: I have a full supply list at bit.ly/resourcesupplies of all the things that I use. You can also go to dailyrefinement.com and see how I fit them into this whole system.
If you have higher margins or a faster sell-through rate, which we went over earlier, so things sell faster or you make more profit per item, you don't need this many items.
When I reached a full-time income in my Restar Nirvana store, I did not need 3,000 items in my store. I only had maybe 1,100. That's because I had way more profit per item, and my items sold way faster than 100 days. They were selling on average like every