In the beginning of 2020, pre-pandemic, Joe and I primarily bought Amazon return liquidation pallets. We enjoyed the variety of items they provided. One of the benefits of these types of pallets were the low up-front cost and the healthy mix between larger, harder-to-ship items and the smaller, easy-to-sell-online items. Between our well-established eBay store with consistent sales, our flea market booth, and Facebook Marketplace traffic, moving inventory was easy.
But, when the pandemic hit, we, just like everyone else, struggled to figure out how to adjust our model to survive the curveball. Selling on Facebook was no longer thriving and people just simply were not shopping in brick-and-mortar stores anymore. Even though our state never fully shut down, we still saw that now the overhead cost of selling locally was no longer justifiable, both in a financial and a time management sense.
The point is, in owning and running a business, there are few things you can rely on. One thing that you can count on is that the needs of your business will change from season to season. When (not if) that happens, it is up to you to figure out whether or not the time and money that you’re putting into a practice is still worth it.
I am not a person that particularly loves change. I enjoy the predictable and get a thrill out of perfecting processes day after day. My business just happens to be one that likes to change a lot, and it’s a welcome and difficult challenge to learn to adjust my model to the needs of my clients and customers.
Money is an expected asset to manage. It is easy to understand that wherever you place monetary investment is directly correlated in how much profit you make. But, surprisingly, as important as monetary investment is, there is another asset that you must manage.
I daresay, it maybe even be an even more important than money.
That asset is time.
Making Business Decisions: Is it Worth My Time?
To make sure you’re not wasting time doing tasks that don’t focus on growing your business, you need a clear idea of how much money you make per hour. You can then be in control of the decisions you make regarding where you spend your time. This is geared towards resellers, but this can be applied to any business endeavor.
1. First, find out how much you’re worth per hour:
As a reseller, your main income will be the sales you make from listing. Ask yourself:
- How many hours do you work in a week?
- What are the average amount of listings you post in a week?
- What are you average amount of sales you have in a week?
This may take some time over the next few weeks or so to get an accurate idea of how much time you spend working and the average amount of money you make per hour. If you’re only reselling as a business, this can be fairly quick and easy— but if you’re monetized in other ways (such as blogging, writing, website management, monetized social media accounts, etc.), this can be a little more challenging.
The least overwhelming way to do this, is to account for each of those business endeavors separately.
The math goes like this:
- Divide your Sales per Week by the Listings per Week to get you average dollar per sale.
(many listing platforms also have this information on their analytics page so you don’t have to calculate this yourself.)
- Take that information and complete this:
The average dollar per sale (figured in step one) and divide that by the average hours in your work week to get average dollars earned per hour.
2. Ask Yourself, “Is this task how much I pay myself per hour?”
A good reseller can look at almost anything and tell you how much they can profit from an item. There’s money in almost anything. Broken appliances can taken apart and parts can be sold individually as replacements. Old items still have value, especially if they’re vintage or no longer in production. Most of the time, broken items can be repaired in some way or another.
A good businessperson can look at almost anything and tell you if it’s worth the time spent making that money is truly profitable or not.
If you’ve done step one and have decided that you make about $15/hour on average, and you find a lamp that you think is great, but it is broken and needs some work to replace it and make it sellable—have you accounted for the time spent:
- driving to the hardware store,
- finding the pieces,
- making sure you have the tools available,
- replacing or fixing parts,
- testing that item,
- time associated with learning how to replace the parts?
Will the amount of time spent fixing the lamp pay for all the overhead (including your hourly wage) and still make a decent profit?
For some people, the answer will be, “Yes. I have accounted for the time that it will take to replace this item, and I have the knowledge/parts/tools available on hand. It won’t take me long, and I can still resell this item and make a profit I’m happy with.”
For others, the answer will be, “Yes. I have accounted for the time that it will take to replace the parts on this item. I do not have the knowledge/parts/tools available and that’s an added expense and time. It will take me a long time to resell this item, and by that time, I will have lost money repairing and reselling this item.”
This is not a one-size-fits-all question.
If you want to be successful in your reselling business, you have to understand the foundational parts of your unique business. There are more transactions that happen in your business than the ones you see in your bank account. If you want to grow your bank account numbers, then you have to account for all the numbers.
How about you? Have you calculated how much you’re worth per hour?
How do you decide which tasks are worth your time?
