posted on December 7, 2002 05:37:59 PM
Do any of you ever run stats on the selling history of other sellers? It is useful to track competitors. Sometimes it can be fun to track people you meet at auctions and such, see if their bragging has any merit. And it can be fun to do the statistical analysis on friends and relatives.
I've been tracking a few sellers, and I wonder why they even bother selling on ebay.
I am not referring to sellers who purchase in quantity from distributors.
Example one, a lady who sells in my categories, she buys all of her inventory on eBay, purchases sets and subsets of porcelain, then lists each piece one at a time. Thus it is easy to track her costs over the months and determine that her average cost per piece ranges from $30 to $35. She bids high to win, because she is bidding against other sellers who do the same thing, and against the china replacement companies. She lists quite a bit each month, usually more than 400 listings, and all of her starting prices are under $9.99 to minimize eBay fees, and so her starting price doesn't even come close to covering her costs. Her gross each month looks impressive, and her sales rate is over 90%. Yet month-after-month, her average sale ranges from $28 to $32. In November, she spent $5000 more on inventory acquisition than she grossed in sales. So why does she even bother?
Example two, one lady goes out to yard and garage sales and buys to resell on eBay. I know this person, and she told me what she thought her costs were, then I added an estimate for the costs she left out, like Paypal fees, gas, packaging supplies, and so on. Her average cost per yard sale item is $2.00. She lists over 450 auctions each month. Her sales rate is around 50%. Her average sale is $3.50. She is making a profit of $1.50 per auction. But why even bother. From acquisition to mailing to the customer, there is quite a bit of time and work involved, all for $1.50?
posted on December 7, 2002 06:26:29 PM
Some people don't care if they make a profit - some don't even know.
Around my town, I can seldom buy older collectibles at auction anymore- especially glass and china, things that appeal to women. Why? Because of all the malls that have opened renting booths.
I call them the Affluent Housewife Dealers- the ones that can outbid anyone trying to resell because they don't care what it costs. I've kept track of a few and there is no profit in it- just "something to do". They pay high retail, mark things up 300% and then wait.
Of course, if they DO sell something they do well- but they seldom do as their prices are so high any knowledgable buyer walks right on buy. At the BIG monthly show there are any number of dealers that I and many others walk right on by- because they have the same stuff they had last month and the few new items they have are grossly overpriced- and they don't care. Family money is behind them - it's viewed as a nice little hobby.
Those of us who need to make a living at it have moved into other types of merchandise or have developed alternate sources of inventory - and if you stick with the glass/china it's REALLY easy to underprice them.
posted on December 7, 2002 07:06:56 PM
Bob9585, gosh, strange as it is, what you say makes sense. There are sellers who are not motivated by profit, but instead the motivation is self-esteem and personal identity issues. We are seeing an entirely new method of doing business that is outside the normative textbook explanations, and contradictory to our understanding of basic capitalism.
Eventually the bubble will burst. Even if a seller's losses are funded through other income sources, a losing business cannot be funded over the long-term.
What stupefies me are the choices being made, to devote hours and hours each month pretending to own a profitable business, when the funded losses could have been used elsewhere, and the hours could have been spent accomplishing successful projects. Do you think the other income sources realize the extent of the losses? I am sure someone will wake up sooner or later, because something invariably happens - job loss, slump in the asset portfolio, wage earner becomes ill, divorce, and so on.
One thing I've noticed, in the malls where the sellers have over priced merchandise, and so the merchandise doesn't sell, I see those malls closing their doors. The owners can't get commissions from unsold merchandise.
At one recent show, I walked by a vendor who was telling a lady how she got all of her chocolate pots that she had for sale off of eBay. The pots were priced real high: $500, $700, ... I kept on walking. I am not interested in buying from a seller who paid real high prices to buy inventory on eBay. Instead, I buy from the sellers who purchase direct from the estates.
posted on December 7, 2002 07:21:50 PM
That "hobby" phenomena hit near me too. And for a while getting really good glass was hard. Prices skyrocketed and unless you were very canny you'd get burned. But in the last few months two of the local auction houses have gotten the inventories of the failed affluent housewives. One thing you have to remember, AHs bore easily. So once it's not fun anymore they move on. I salivate in anticipation of some of the inventories that will liquidate. Some of my best friends are AHs. But I tell them that eBay and antiquing is hard work.
I'm not dissing affluent housewives. I am one. I've always worked (now laid off with a stinking job market) and am lucky enough to be married to a guy who makes really good money. But I like a challenge and eBay can be that.
posted on December 7, 2002 07:32:58 PM
During the past couple of years several bored affluent wives have opened B&M stores in my town in direct competition to me.
After awhile they find out that it's a job just showing up there and they call it quits. But others start up to take their place.
AH is also an abbreviation for something/someone else.
posted on December 7, 2002 08:43:53 PM
I meant AH in the nicest possible way. But if I think about it too long...
[ edited by jensmome on Dec 7, 2002 08:44 PM ]
posted on December 7, 2002 08:50:59 PM
I look at many flea market vendors and often wonder why do they bother as some must lose money on a regular basis. I believe that many of the marginal vendors sell for the social contact and to get out of the house for a while.
posted on December 7, 2002 08:54:17 PM
Kiara, I am curious - the shops that opened and closed in your business neighborhood by affluant ladies, in your opinion, what is a rough estimate of their total loss from start to finish? $100,000? $200,000? More?
I always assumed those type of businesses were started by people who inherited money from grandma or grandpa, possessed no business skills, just had a goofy business idea, like opening a doggie day care, and used their inheritence to implement the idea. Then within a year, the business was closed and the inheritance was gone.
I speak as being someone who will never inherit anything from anyone, and if I did, I would invest the sum wisely, continue my life the same as alway, and let the investment build me a richer future.
I have a strong business background with respect to education and employment. About 20 years ago I had quite a bit of money saved from my hard work and I had an idea for a little business. I went out, pounded the pavement, did market research, surveyed people, collected data, analyzed it, then concluded that my business idea was not feasible for my area. Doesn't anybody else do basic research anymore before opening a business and losing a whole bunch of money?
I think you are right on target with the flea market and swap meet people. I know after my grandmother retired, and my grandfather died, that was the thing that really kept her going. It allowed her to have contact with others, even if she wasn't making a profit or even making expenses, it was worth it.
They have a monthly flea market here that sets up at the same location, I go sometimes just to see if there is anything interesting, but there isn't. Everything is high priced, there is usually negligble traffic, but they keep setting up.
posted on December 7, 2002 09:39:15 PM
I have no idea how much money they made or lost as I have been so busy tending my own business and trying to compete as this is my living.
I do know that one was financed by her boyfriend and she was spoiled and soon lost interest. Another operated with money from an inheritance and she had a bit of business sense while she lasted.
Another got money from her mother and ended up blowing most of it up her nose while her business went under.
Two of the ladies operating now have admitted that it is a hobby as they are bored at home. One is showing up for work less and less and her shop is closed off and on now so perhaps she is losing interest already.
posted on December 8, 2002 05:50:38 PM
>What stupefies me are the choices being made, to devote hours and hours each month >pretending to own a profitable business, when the funded losses could have been used >elsewhere, and the hours could have been spent accomplishing successful projects.
My now-former Real Life career attracted TONS of "affluent housewives" (which does NOT describe me) who just wanted to get out of the house and have a "career" they could brag about to their friend at The Club, or complain about because they were now just soooooo busy they could barely cope <much sarcasm there from the one who got stuck straightening out their disasters>. Granted, they weren't (necessarily) losing money, but they certainly weren't making any, either.
There was also the "my divorce settlement says he has to pay spousal support until I can support myself so I'll make it look like I'm working" crowd--fortunately they'd usually remarry, because they had NO interest in supporting themselves.
[ edited by KarenMx on Dec 8, 2002 09:36 PM ]
posted on December 8, 2002 08:26:50 PM
Karenmix - Ok, I'll ask "what was your former career?'.WAIT. Before you answer
give people a chance to guess, 2 guesses each.
posted on December 8, 2002 11:13:51 PM
We see that around here a lot also. Part of it seems to be an attempt to shift personal expenses (vehicle, phone, furnishings, travel) into a business where they will then be deductible. I think that there is a 3 or 5 year period before something must become either profitable or be declared a hobby. In that period, a whole lot of 'buying' trips can be a way of turning a vacation into a business expense. And a whole lot of 'inventory' can furnish a home, all of it business expenses.
Then there are people for whom collectibles are a form of therapy. It really does get people out of the house. It does provide endless socializing and being with people. The work of setting up and taking down is probably an aerobic work out. And the endless work is probably very good for depression.
As a 19 year old (soon to be 20), I really can't relate to some of these things at all.
I sell on ebay purely because of the broad range of people I can reach, and the fact that it takes less time for me than compare to some part time job. Plus its profitable.
Its not like the reasons doesn't make sense, I'm just kind of shock I guess. Talk about a whole different world there. Boy do I feel like a kid. heh.
posted on December 9, 2002 06:41:46 AM
(coming in late) My best friend is anAH I guess. She buys semi-precious beads and makes necklaces. Her stuff is nice, too. But she buys and buys and buys,,, ans hardly ever can get herself to go into the room and do the work, unless someone will sit with her, she can't stand the loneliness of the creative part. Iused to sit and string beads with her, but I am too busy myself. AND- she doesn't want to sell retail, because the government will tax her! She'd rather sell wholesale, for half the value, and not pay sales tax. But the stores won't take commision, or else they've lost, broken or stolen from her... I keep[ telling her I will put her stuff on ebay for her, She doesn't trust the internet... At that point I threw up my hands.
"And All Shall be Well, and All Shall be Well, and All Manner of Things Shall be Well"
posted on December 9, 2002 08:14:20 AM
Hows this... My goal in business is 2 fold. First, I want to Empty my closets of the second and third examples of my collectable (Olympic pins).
Second, I want to show a small decarable income every odd numbered year so that I can write off my trip to the Olympics every even numbered year.
Backing up my business? My job as a classroom teacher.
posted on December 9, 2002 10:53:53 AM
There are lots of people who buy and sell antiques/collectibles as a hobby, and thank goodness we have them. While they may create competition when buying, they also keep a lot of stuff in "float". There are not (and never have been) enough end-customers to absorb the amount of middling material in the marketplace. Probably 95% of this stuff is sitting in dealer inventory somewhere.
I have hobbies I enjoy that also cost me money. People who know what I do think it strange that I am just storing this stuff and not using it or selling it. But if I went on a cruise or a ski trip, that would not show a profit either, and these people would think that was a fine use of my money.
If these small time sellers did not have an outlet, they would still go out shopping on the weekends looking for things, since for many people, antiques are fun and interesting, and an opportunity to learn.
posted on December 10, 2002 10:37:59 PM
Three good guesses, but all wrong. I was a travel agent for 13 years, until the airlines stopped paying commission in March. It's not an easy job (not that it's rocket science, but it is easy to screw things up in a major, major way), and no, you don't get to travel everywhere for free--especially now.
posted on December 13, 2002 09:34:55 AM
Tell ya what gets me...
When I go to a flea market, see something I might be remotely interested in, and the seller just sits there reading a book or talking to his buddy, totally ignoring me! Are they waiting for me to beg them to take my money?
If they don't want to sell their crap, why even drag it around?
My other major heartburn is vendor's who don't have prices marked on their stuff. I don't even bother to stop at those tables. I'm not psychic (sp?) and I'm not interested in a long discussion about value. I just want to know what their asking price is.
posted on December 13, 2002 10:19:11 AMvendor's who don't have prices marked on their stuff.
I wonder about this all the time. Do they look at me and think about how much money I will pay for things? Do I look wealthy to them, or do I look poor?
Do they wait for a dialogue to see if I really want it so much I will pay anything they ask?
Did they buy the item from the vendor next to them for next to nothing and they are afraid to price it for fear he may see the big profit they will get?
posted on December 13, 2002 10:44:43 AM
When they do not mark their prices they are commiting one of the cardinal sins of a flea market yet the vast majority do not mark their prices. Usually those are lazy sellers.
One drawback to marking only a few of the flea market items is that if the items are generally marked way too high the buyers will quickly assume that everything is unreasonably price and move on. ( and justly so )
Another common sin is for the seller to go off shopping for long and frequent juants. The neighbor and temporary custodian of the stuff is merely instructed to tell buyers that the seller will be right back.
Yet another sin flea market seller commit is to leave stuff in boxes or in a pile or not have any decent access to their stuff ( no walkways or clear areas or card tables )
