Hope everyone’s week is off to a good start! With this blog I am often sharing things that go right and the best parts of selling online full time. What is often “swept under the rug” are some of the issues that come up when the sailing is not so smooth. I have been very fortunate to not have had very many items that I have lost money on up until this point, but there have been a few.
Before we get started into 3 items that I lost money on, I will add one more comment regarding the lifestyle that selling online allows that is often assumed, but is not always discussed. This past Friday through Monday was a good example, as I was able to leave mid-day Friday to head home (I live a little under 2 hours from my family) to watch one of my younger brothers high school basketball games that night, my little sister’s dance competition on Saturday, and hang out with my other younger brother at his house at college on Saturday night. Over the course of the rest of the weekend, I hung out with my parents, and the 2 younger siblings that are still living at home, and ended up arriving back at my house around 9PM on Monday. Less than one year ago, all of this would not have been possible as I would have been in the midst of “busy season” working 55+ hours a week with Saturday’s required. The freedom of time aspect of being completely self-employed is arguably more or equally valuable to the potential financial benefits. It is a great feeling to be able to do what you want, when you want, and not have to check in with an employer or boss for permission. I am not claiming being self-employed is for everyone, just be sure that you are spending your time in the way you want, very few others are going to be looking out for you in this regard (particularly not most employers).
Alright, now let’s get on to some items that I lost money on. You could call them mistakes, but I would prefer to think of these items as “tuition” and learn from them in the future so that they will not be repeated. For all 3 of the items I will be showing you today, I lost money on. This was a choice, as I could have decided to hold out for a higher price that I may or may not have received in the future. I went through my inventory in early January and looked at items that prices had dropped significantly on, and either decided to hold prices steady, or to sell them at the current market prices to get my cash out to reinvest elsewhere. So, item #1 that I lost money on is a Play-Doh set that I paid $14.99 for from Target. I ended up buying 3 of these, so this loss was multiplied by 3 (click to enlarge this screenshot, and any others throughout this post):
Per item I lost $2.98, plus inbound shipping charges to amazon. I purchased this item in December of 2013, and at the time I bought this, the price was significantly higher. Let’s take a look at the price history from www.camelcamelcamel.com to see:
If you’ve never used this site before, I would recommend checking it out, it’s free and provides some valuable history for price and sales history. It’s not 100% accurate, but it can provide some valuable information. As you can see, this item was selling for $40+ in December and that is likely the price I saw when I scanned this item for potential resale. The takeaway for this, is that prices can get out of equilibrium in December with all of the Christmas buying, and this must be considered when buying items in December. HERE, is a link to the current product page on amazon if you want to take a look. The low price is now higher than what I sold these for, so if I was more patient on these I could have received more.
So, I lost about $1.50 each on these items, plus the cost of inbound shipping to amazon. Let’s also take a look at the price history before commenting further on the loss:
This item was purchased in November, and prices at the time were in the $40-$42 range. I purchased this item as a speculation play, hoping that some of the lower priced sellers would sell out of the item as Christmas grew closer, and that I would be able to sell at a profitable price. Another factor contributing to the loss is the $4 per unit fulfillment fee as the item was oversize. I likely did not factor that in when purchasing the item. The takeaways here are: if you speculate, you expose yourself to possible loses if what you think will happen doesn’t, and be sure you know what fees you are subject to ahead of time, as oversize items incur more fees. HERE is a link to the current amazon listing.
As you can see, I lost about $1.80 each plus inbound shipping charges to amazon. Now for the price history:
At the time I purchased this item, it was selling for about $18. So, why would I have paid $10.77 to sell for $18? Well, because I thought I was buying this item for $5.34. The item was found in a Christmas section with a sign saying 75% off all Christmas items. This item did not ring up at the right price, and I did not notice until I was going through my receipts. The takeaway: make sure to pay attention to the prices that items are ringing up at when checking out at the stores you go to, if you don’t it will cost you money. HERE is a link to the current amazon listing.
Hopefully seeing these 3 items that I lost money on will help you avoid similar mistakes in the future. If you missed my last “mistakes” post, HERE is a link. If you have any questions or comments, please leave them below, or send me an email at firstname.lastname@example.org.