In the beginning of 2020, pre-pandemic, Joe and I primarily bought Amazon return liquidation pallets. We enjoyed the variety of items they provided and decided it was one of our better business decisions. 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.
However, when the pandemic struck, like countless others, we faced the challenge of adapting our business model to an unforeseen crisis. Selling on Facebook dwindled, and brick-and-mortar stores saw dwindling foot traffic. Even though our state didn’t implement a complete lockdown, the financial and time management overhead of local selling became unsustainable.
The undeniable truth in business ownership is that change is constant. Seasons shift, circumstances evolve, and it falls upon you to assess whether the resources—time and money—you invest in your practices remain worthwhile.
While I’m not particularly fond of change and relish perfecting processes, my business thrives on change. Adapting my model to cater to the ever-changing needs of clients and customers presents both a welcome and demanding challenge.
While monetary management is a given, there’s another asset that deserves equal—if not more—attention: 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.In the realm of business, understanding your worth per hour is crucial to prevent wastage on unproductive tasks. Resellers, in particular, can benefit from this approach, but it applies universally to all business endeavors.
1. First, calculate your hourly worth:
As a reseller, your primary income stems from sales generated by your listings. Start by assessing:
- How many hours you dedicate to work each week.
- The average number of listings you post weekly.
- Your weekly sales figures.
This calculation might require a few weeks to acquire accurate data, especially if you monetize your business in various ways (e.g., blogging, writing, website management, or monetized social media accounts). To simplify, evaluate each business aspect separately.
Here’s the equation:
- Divide your Sales per Week by the Listings per Week to determine your average dollars per sale (often found in analytics).
- Divide this average dollars per sale by your average weekly working hours to establish your earnings per hour.
2. Analyze Tasks’ Value Against Your Hourly Rate
Resellers possess the knack for spotting profit in almost anything. Broken appliances can yield spare parts for resale, and vintage or discontinued items often retain value. However, a successful businessperson evaluates whether the time invested in generating profit is genuinely worthwhile.
Suppose you’ve established that your hourly worth is approximately $15. You stumble upon a broken lamp that has potential, but repairing it entails:
- Driving to the hardware store.
- Sourcing replacement parts.
- Ensuring the necessary tools are available.
- The actual repair process.
- Testing the item.
- Time spent learning the repair process.
Will the hours invested in fixing the lamp cover all expenses (including your hourly wage) and still result in a satisfactory profit?
For some, the answer will be affirmative, as they’ve accounted for the time, have the necessary knowledge, parts, and tools, and can quickly resell the item.
For others, the equation won’t add up, considering the added expense and time for knowledge, parts, and tools. The lengthy reselling timeline may result in financial losses.
There’s no one-size-fits-all response. Success in reselling hinges on understanding the unique facets of your business. Transactions extend beyond financial figures; all variables must be considered.
In conclusion, comprehending your worth per hour is pivotal to making informed business decisions. By valuing your time alongside monetary investments, you’re empowered to prioritize tasks that genuinely contribute to business growth.
Have you calculated your hourly worth?
How do you determine which tasks are worth your time?
Share your insights with us!