Monthly Archives: December 2012

Sales or Profit

By Tony Lam

 running for sales or profit

eBay and Paypal provide whole bunch of reports including sales and expense reports to the sellers. However, there is no report showing the net profit. Most of the sellers may be misled by the sales figure without noticing that their profit margins are gradually eaten up by increasing shipping charge, packaging material cost, eBay FVF, etc.  To have a clear picture of the net profit, sellers may need to create their own account report combining sales with variable cost and fixed cost. Knowing the MTD accumulative profit, sellers can be able to adjust their selling strategies continuously (using Deming cycle PDCA) to meet the profit targets before it is too late. Here I am going to share my way to track the profit for each transaction and MTD accumulative profit. It helps me a lot to put my focus on actual money in the pocket and catch up net gain when it is behind the target. How about yours? If you have other ways or suggestions, I would like to learn from you.

  1. Variable cost

Define variable costs such as eBay insertion fee, Final Value Fee (FVF), Shipping, Insurance, packing materials for each item and put it in an Excel spreadsheet. Define a Range Name(itemlist) for the list.

eBay item list

Then, record down each transaction in a separate Excel spreadsheet with total amount received.  Select the item by drop down list from the Rang Name (itemlist). Most of the entries are filled out automatically by Excel Vlookup. In case of some situations (such as multiple qty or combined invoice) that the formula does not fit, you can overwrite them with your figures.   If you are not familiar with Excel functions such as “Vlookup”, it is easy to google tutorials with keyword “ Excel Vlookup”. Here is one of the tutorial for creating drop down list and defining a range name.

eBay profit tracking table

  1. Fixed cost

Define monthly fixed cost such as rental, utilities, monthly subscription fee from eBay store/Inkfrog/Auctiva/ Other app. etc.  The figure forms a break even line for your profit and loss. For example, if the monthly fixed cost is $500, your monthly profit from 1) is $2000. Then, your profit is $ 1500. On the other hand, if your monthly profit earned is less than $500, you will report a loss for that month.

Continuous Improvement PDCA cycle

By Tony Lam

Lifelong education without implementation is useless. To implement the business ideas or process learned, I apply the iterative four-step continuous improvement method PDCA (Plan-Do-Check-Act).  It is simple and easy to follow. Like driving or breathing while swimming, it does not require much effort if keep practicing without stop.  In handling task like getting rid of dead stock or filing complaints, I always apply the PDCA method.  You may try it to see if it works for you.

Education & PDCA

PDCA definition

Plan :  Establish the expected outcome and define necessary steps

Do : Implement the plan

Check : Study the actual result against the expected result

Act  : Analyze the reason why the actual result is different from the expected result.  Tweet the plan and include more details in the next iteration of the PDCA cycle.

PDCA example

Handling of USPS complaint of missing page (details please read my article here)

Cycle 1 Plan Get the refund, Follow the steps learned in the first occurrence
Do File a case to CS at USPS.com
Check CS rejected the refund request
Act CS provided standard answer hope to close the case quickly
Cycle 2 Plan Escalate to higher level
Do Opened several cases to CS,  copied to the Postmaster General  (PG)
Check No reply from CS or PG
Act Message not reaching PG, still working on it or he doesn’t care ?
Cycle 3 Plan Seek judgment from public via Social Network & community
Do Posted at Twitter, FB USPS official page & eBay community forum,  Filed case again addressing next action plan. Resent email to PG
Check CS called & assured my refund and retraining of post office staff
Act Actual result met expectation. Mission accomplished

Lifelong education

By Tony Lam

lifelong education

As a seller, I need to keep watching the rhythm of market, update myself with latest technology knowhow and learn from other sellers from time to time.  It is a lifelong education.  The owner of Gully Farm Consignment was branching out and listening to other sellers on eBay forums.  Some tried to read books from expert or blogs from other sellers, forums, or Youtube channels to update themselves.  I found Google Reader is a very effective way to feed me the latest information automatically. What I need to do is to register a Google account and get started with Google Reader. Then, click the subscribe button and add my favorite sites by cut and paste the RSS feed (sellertools.org/feed) or the blog URL (http://blog.terapeak.com/).  Also, I use Flipboard app at my iPhone and iPad to connect my Google Reader account so that I can read whenever I want (except driving).  I like photography, online selling, and medical knowledge. I put the most important blogs and Youtube channel in to “must read” folder to prioritize my readings. Below are my favorite blogs, forums and Youtube channel.  How about yours? I love to hear your ways to update yourself.

eBay Discussion Boards: Recent Topics in Auction Listings

The Ebay Entrepreneur

blog.terapeak.com

The Online Seller

My Secret Ebay Diary

Digital Photography School

SFBayAreaMD.com

Yaro TV channel

Shipping problems resolved !!!

By Tony Lam

Merry Christmas to every one !!  I feel blessed for the year.  Both USPS and UPS shipping problems have been resolved before Christmas.  Finally, I got a full of refund from USPS for the “missing page 1 “ on 12/22/12 after filing several cases to USPS.com and two emails to the Postmaster General.  Below is their internal communication message regarding to the case.

“ We have re-trained our SSA’s in all Fremont stations regarding proper procedures of handing PS Forms 2976-A and 2976(Customs declaration forms)”

As to the problem of UPS pickup not scanned, the tracking records finally showed up after I filed a lost claim at UPS.com. Below is the latest tracking activities.

“Get rid of dead stock” game

By Tony Lam

Are you being annoyed by the dead stock in your garage or warehouse? Dead stock is the inventory that cannot be sold. They may be the purchase because of mistake in merchandizing, sub-quality or blemish items.  Instead of a headache, dead stock is fun. Am I kidding?  Nope !!  it would be really amusing just to switch your mind and consider it as a game to challenge yourself. Set one or two simple game rules.  Test out your ideas and twist them if not work out as you wish. Be creative in your strategies and make a win-win situation to please yourself and please your buyers. Here is an example of “get rid of dead stock” game rules:

  1. No loss in terms of material cost of dead stock.
  2. Buyers are happy for the transaction.

I tested several strategies and some work pretty good for me.  If you have other creative ways want to share, l love to hear.

dead stock game

1)      Surprise Gift

No price slashing is required for the dead stock item.  Give away the dead stock item as a surprise gift together with a hot item with profit margin that can cover the dead stock item.  The surprise gift comes with a greeting message to the buyer.  Because the buyers are very happy with the extra gift (high perceived value) that they never think of, I received a lot of exciting feedbacks.  Yeah !! I got a Win-Win.

 

2)      Optional FREE blemish item for buyer’s discretion

I have some rejected violin bows found during my shipment inspection. They may not all be bad from customers’ point of view. If I ship them, I have a risk of receiving negative feedbacks. Therefore, they are left in my garage as dead stock.  Thanks to God who gave me an idea of offering it as an optional item for the buyers (for free) to decide if they want to get a rejected bow as a backup bow.  Below is the message I put at the listing. The feedbacks from the buyers are very positive.  Around 50% requested an extra backup bow from me.

“I have limited number of blemish violin bow  (round stick) want to giveaway. If you want to receive one extra rejected bow (round stick) , please state “I want a free giveaway rejected bow” in your payment note. I will then include one extra rejected bow to you. As I said, it is a blemish bow and if you don’t like it after receive it, you can dump it and don’t complain to me. It is out of my pocket and does not cost anything to you.”  

 

3)      Bundle it as a bonus to make a super deal

Without cutting the price of the dead stock item, I offer the item as a bonus with multiple hot products to make a super deal that on one dare to offer. To outstand other listings, I created a brand new mix-and-match that nobody is offering. In the eyes of buyers, it is a unique irresistible super deal.  To me, it accelerates the sales of hot products without a loss.  Hooray !!! Win-Win again !!!

Example of Super Deal bundle :

“Two Sets of 6-Stringed Acoustic Guitar Strings ~ Bonus One String Winder”

 

More readings….

7 Surefire Ways to Turn Stale Inventory Into Cash

Whether you’ve overbought on inventory, sourced the wrong products or have merchandise on hand with little shelf-life left  in it, “stale inventory” is a common (and normal) challenge  for online merchants…. and more

Thoughts On Dead Stock Management

Over the past 20 years of presenting to distributors, I always ask audiences to show me the hands of those having dead stock on hand. I am amazed that almost everyone raises his/her hand;…. and more


Shipping Large Items