How do I figure out how many sales I need to stay on top of my Bills and Daily expenses?
I don’t ask myself how much money do I need to make each month. I break it down into what do I need to list each day to end up with the sales I need to cover the amount of money it takes to live today, tomorrow, next week, next month. What I mean by this is I pull out all of my bills and write on a calendar, I use a white board, and I write down on the date the bills are due what it is and how much is owed. Then I know how much I need to bring in each week prior to that to pay those bills.
The rule of thumb on ebay is if you sell a $100 then your net will end up being approximately $30. Lots of sellers use the 1/3 rule. There are selling fees, inventory expenses, you have to pay for your gas to go find it, etc. Now if you only buy items that cost $1-$5 then are able to turn it into $20-$30 then your profit margins may be much better but you will not always be able to do that. You will have items that you think are never going to sell that just sit there. I have found out that the things I think are going to sell really good don’t and the things I’m not even sure about listing actually seem to sell really fast. So it’s tough for me right now to prioritize my listings. Children’s clothes always seem to sell good so that’s a safe item. Clothes in general move better than coffee cups or dishes. Bedding has been really slow for me. All of these things have to be considered when choosing how many listings you need to list to make the number of sales you need to make.
Here is examples of how I do the math
If I want to earn $1,000 per month:
- 20 / $5 Listings per day = $100/day in Listings
- 10 / $10 Listings per day = $100/day in Listings
- 5 / $20 Listings per day = $100/day in Listings
- 4 / $25 Listings per day = $100/day in Listings
List $100/day x 30 days = $3,000 in uploaded items now for sale online
If you sell half of these listings over the next 30 days then you will have $1,500 in Gross Sales but once you take off your fees/expenses then you will end up with between $500-$1,000 depending on how much you had to pay for your inventory, listings fees, selling fees, paypal fees, any storage fees, postal and shipping fees, shipping supplies.
$1,500/3(the 1/3rd Rule) = $500 mth in estimated Net Profit on $3,000 per month inventory listed. Now this is just an estimation to try to project sales. You must look at your own sales and consider your own quantities and dollar amounts.
If I have a bill for $500 that I pay each month, say a loan payment or child support, and I know I have to pay this every month then I also know that I need to list $1500 per month to cover this bill.
I map it all out on a calendar and project how many listings I need to complete on the work days I have available to do it on. I may not be able to work on a Saturday or a Sunday because of going to the flea market or church or there may be a family event that I have to go to. That leaves me 5 days to schedule in the time it will take to take all the pictures and build the listings so that by the end of the week I have completed the number of listings in my goal.
Remember the listings you list today will pay your bills next month. These listings may not pay any of your bills this month. It can take time to sell them. What you do today will affect what you can pay next week on this day or next month on this day. There is a term called “duration.” This is how long it will take for your item to sell. If you start logging on a spreadsheet or download from ebay your sales you can actually see how long it is taking you to sell certain categories. This may be a little time consuming but would help you in the long run on estimating sales for your bills versus what you listed that month.