Anyone thought about/already run an "I Sold It..." store?
BobS
Posts: 1,738 ✭✭
So, just wondering if anyone has tried or is currently operating one of the "consignment" type operations like "I Sold It", etc.
Not necessarily an "I Sold It" store, but anything similar?
I'm looking into the possiblility myself for a number of reasons.
1) Quit working for the man, and BE the man.
2) I spend a lot of my free time on e-bay anyway, so why not explore the possiblility of doing it full-time.
3) I live in a community of about 50K people, and there are no similar stores around.
4) Commercial storefronts can be rented for $500/month around here.
5) Typical commission is about 40% in these places.
6) Seems like low start-up capital needed. I already have a computer and a nice digital camera. What else is left? Shipping supplies? Maybe some advertising?
7) My wife has a very good job and could support both of us if needed.
8) In this economy, people are looking for quick cash and selling everything not nailled down.
Some of my reservations include the fact that e-bay may be shifting to a fixed-price only format soon. Also, maybe everyone out there has become computer savy enough these days that if they have something to sell, they can do it themselves. Craigslist also puts a wrench into things. Have I missed the boat?
Thoughts?
Cheers, Bob
Not necessarily an "I Sold It" store, but anything similar?
I'm looking into the possiblility myself for a number of reasons.
1) Quit working for the man, and BE the man.
2) I spend a lot of my free time on e-bay anyway, so why not explore the possiblility of doing it full-time.
3) I live in a community of about 50K people, and there are no similar stores around.
4) Commercial storefronts can be rented for $500/month around here.
5) Typical commission is about 40% in these places.
6) Seems like low start-up capital needed. I already have a computer and a nice digital camera. What else is left? Shipping supplies? Maybe some advertising?
7) My wife has a very good job and could support both of us if needed.
8) In this economy, people are looking for quick cash and selling everything not nailled down.
Some of my reservations include the fact that e-bay may be shifting to a fixed-price only format soon. Also, maybe everyone out there has become computer savy enough these days that if they have something to sell, they can do it themselves. Craigslist also puts a wrench into things. Have I missed the boat?
Thoughts?
Cheers, Bob
0
Comments
In fact, if you pay for AdWords, you can use Google Checkout at your store for absolute ZERO fees!
So I had a rule of only selling those collectibles i knew. $500/month is a lot of 10-15% commission sales before you turn a profit. You have to offer something different and easy to use for those of the uninitiated. Those who are unable to use computers are falling in numbers.
It's a great business to be in, volume was my problem.
edit: (it should be added in my state filing as an LLC or SP is pretty simple to do) make sure you look into that as well.
Although with the economy, I bet pawn shops are doing well. People selling things for pennies and the owners turning a decent profit. (Especially if you own one near a casino) Maybe a Pawn Shop with enough wiggle room to sell what you want to on ebay, ecrater, etc?
The only thing with a Pawn Shop is that you have to have enough capitol to start with to buy items that come through the door. I bet some real neat and interesting things walk through. I think the toughest part of a Pawn Shop is knowing gemstones and precious metals. How do you tell 10K gold vs 14K? I dont know cuz Im not in the business.
1. Most people are computer savvy now to an extent. 40%, even though it is what is required to make decent money, is too high for those people that have the ability to sell on ebay or ecrater themselves. And a lot of those who arent familiar with online sales, know someone that does.
2. Your business would be based upon the needs of others rather than having a unique product to sell. There are several of these consignment shops in our area that only use their storefront and take about 40% that continually go out of business.
3. The only store locally that did the online sales thing, which was also the local UPS store, required you to pay any listing fees UPFRONT!!! People that need the money, do not have this to begin with. You would either have to front the expense for them (unwise) or not sell their item at all.
4. Considering $500 for a storefront, then figure another $250 in utility (a low estimate), taxes, advertising, etc. etc; Your store would have a monthly expense of $1000-$1200 depending on location of business. Many people forget the added expenses of business (not saying you would, just a random thought). To break even, you would have to have a monthly sales total of close to $3000 per month. To bring home 30k a year, you would need to sell nearly $110k per year ( assuming a 40% rake on sales). You would be surprised at the number of people I am friends with that say I make a bundle when I tell them my yearly sales are in the 150-175k range, boy if they only knew.
5. Even though this is a good business in this economy, since many people will be selling a lot of personal items, you still need buyers. I would never recommend doing that in the state the economy is in now.
As I stated, these are only my opinions and I can sure understand not wanting to work for "The Man" anymore. I did that for 13 years in temperatures ranging from 120 degrees to 10 below, but from what I see, these types of business are a crap shoot. I dont think there is any way to tell how they will turn out, it all depends on your area and the individuals in it. Good luck to you in whatever you decide.
There are 2 pawn shops in the area, but know (from experience) that if you have a item (tool, electronics, etc.) that may fetch $400 on E-bay, you'd be lucky to get $100 from them for it. That's why I think these "I Sold It" stores work. It's the open market dictating the prices, and people seem to believe they'll get the most $$ they can that way, even with a high commission.
Marc - there is an "I sold It" store about 45 miles away in Columbus (about 15 times larger than my community). Any suggestions on how to go about picking these folks brain without offending them as potential "competition".
Careful selling freight items --- they often don't have a nifty shipping costs website.
I wouldn't for Two main reason's.
1. I have watched three stores in Western Co. Open and close within 1 year.
2. As a fairly savy collector I don't buy anything, ever, from I-Sold-it or anything similar because I refuse to pay the rediculous Fees associated with purchasing anything from these types of entity's. As an example a couple of years I saw some cards listed at the store about 1/2 mile from my work that is now gone. I stopped by and asked if I had to pay fees if I won the item and stopped by to pick it up after. They said I had to pay the same whether I got it mailed or picked it up...Period. Needless to say I didn't bid on it.
I think you would be better off opening a Pawn Shop. There are two new ones here in the mountains in the last 6 months. That should tell you something. And no city's of over 3-5 thousand within 75 miles.
Neil
A major problem is that people will want to bring in the stuff they typically sell at garage sales and expect you to sell them for top dollar. It isn't going to happen. The business model is based on the premise that you will only accept items that will sell for $50-$75 or more. Therefore, as others have noted the problem is volume of quality stuff to sell. If they don't get it or you accept stuff that you know will not sell for those dollar values, you are wasting your time, money and effort listing junk that will not sell. You really need to be an expert in a lot of areas - or at least know how to research well. You never know what is going to come through the door. What may seem like a really cool item may only be worth pennies.
The other problem with consignment models is that you are recommended to start auctions a $0.99-$9.99 in order to drive competitive bidding. As many sellers know, people are looking for deals. Consequently, on many items, they will sell for less than what they are worth. Something you think should for $200 may only go for $50 or worse $0.99 - but this has always be the case with eBay. This can be stressful at times when you do not know if all of the time and effort to list something will sell or at a price that will make you a profit.
Finally, the changes to eBay (increased FVF, fixed price format, etc) have really made this model a tough one to make money at. Not impossible but it will take a lot of work to be successful.
You may be better off linking up a wholesaler and sell something you know from your home than opening a brick and mortar store but that is a choice you need to make. There are downsides to this as well, a.ka. inventory unless you link up with a drop ship wholesaler.
Hope this helps.
1992 Topps FB Golds (72% complete)
1997 Topps FB Minted in Canton (10% complete)
1999 Topps FB Record Numbers Gold (80% complete)
2001 Topps FB MVP Promotion (35% complete)
When walked walked our dog by after they were closed up, all their equipment was still in the store. This lead me to believe they were shutdown and could not pay the lanlord to even get their equipment back.
<< <i>can you somehow start up working out of your home (to save overhead) to see how it works out? >>
His wife might not like the blinking neon sign over the front door.
<< <i>Make 1/2 of it a card shop, and you can be Bob's Cards and Consignments. >>
I love that idea. There are no shops around, so it could be interesting.
Like I said in the OP, I think the ship for these types of places has long sailled, but was interested in others opinions/ideas. Just don't see me doing what I have been doing for the past 12 years for the next 20.
I worked with several antique dealers, thrift stores and libraries and for nearly three months I was self-sufficient. That however wasn't pure consignments and I had nearly zero overhead as I ran it from my house. So it is possible, but you have to look at diversifying what you do and how you sell. Pure "we'll post it on ebay for you" type things I don't think will have near enough traffic in smaller munis to make cash.
Prove you can sell and know your subject and you might get more consignments then you know what to do with ... 1/2 card shop and consignments might be a good start.
that it is NOT an easy road to get rolling on. My comments should NOT be thought of as negative.
1. The I-Sold-It concept is a failure-certain model, for 99% of folks who try it. The
problems with runing one are so numerous that I am not even going to list them.
(I will say this, though: If you look at that concept as a possible way to make a
living, you need to read some basic biz-books - or take some biz-courses - before
you even think about getting any more "bright ideas." Harsh, but real.)
2. The BEST opportunity in the land - for us little guys - is the lending biz. Pawn is
a goldmine and it gets better everyday. There are HUGE obstacles to overcome
in a launch, but they are the ONLY biz that I would throw overhead money at in
the current/pending environment.
Pawn shops are heavily regulated on a state/county level. Most towns/cities enforce the
regs in very draconian ways. MANY small shops are owned by the brother-in-law of the
police-chief/sheriff, and they will do ANYTHING to force failure on their relatives' competitors.
Entry costs are high, overhead is high, and profits can be enormous. The phrase "it takes
money to make money" is never more true than when applied to the pawn biz. (My biz
has evolved - because of HEAVY competition - from a retail-lender into being a bundle-lender
to retail outlets; some secured, some not. They take the risks of attracting customers and paying
overhead, I take the limited risk of funding their buy programs. I borrow the money and relend.)
There is a small backdoor into the biz, that has some pitfalls but can work.
3. The Backdoor: It is very cheap/easy to start a Commercial Mail Receiving Agency (CMRA).
These are those little private mail-drops that offer the same services that the UPS-Store
provides. After a few months the box rent should cover your rent/utils.
Now, you get whatever permits/licenses are required in your town to operate a "We Buy
Stuff" outlet. The cops will usually throw roadblocks, but any competent lawyer can get
it done for not too much money. Since pledges are at an all time high, and redemptions
are at an all time low, pawn shops are basically turning into a "buy stuff" biz. They will
use their political clout to keep new guys out, but a lawyer can walk the project through.
The best focus to start with is buying metals. If you don't know metals, find somebody
who does. Better yet, study-up and learn how to do them yourself; it's math, NOT rocket
science. PMs, coins, cards, stamps, all kinds of collectibles can be bought CHEAP via the
CMRA base store.
Newspaper ads are still the most effective way to seperate folks form their stuff:
"INSTANT CASH"
WE BUY
(List The Stuff)
You will then resell the stuff online. Which most of us know how to do.
All PMs can be wholesaled quickly at HIGH prices. Other stuff will need to
be retailed online to get the max money out.
Because you are not offering redemptions, most jurisdictions do not consider
you a pawn shop and the permits/licensing are much easier.
4. The Buy Stuff biz is a good one. You must know your merch and you must
know collectibles.
Staying "clean" is the hardest part. The temptations are BIG. Lots of newbies
end up out of biz or in jail because they don't realize that the legal way IS
all the "license to steal" you need to get rich.
Record keeping is burdensome and required by most all jurisdictions.
Employees all steal - even relatives - so you want to keep them to a minimum
while you build capital. Eventually, sadly, you will need some workers.
You will need a gem guy, but he does not have to be an employee. You can learn
gems, but it takes time and LOTS of touching the stuff. Diamonds are a rough
game and MOST are not worth ANYTHING. You can get killed playing with stones,
if you don't understand the game.
If I was starting something today, I would go with a CMRA/BuyStuff model.
There are consultants out there who know how to build these deals, and many
will work for reasonable fees.
////////////////////////////////////
////////////////////////////////////////
//////////////////////////////////////////
Online Stuff:
In my view, EBAY, as we have known it, is not the best playground to invest
time and money in. That may change as time passes.
ecrater and the new-launch of auctivacommerce are the places to build for
the future. Auctiva jumps off in a few days. Free for a couple months; then
$9.95 + FVFs.
ecrater is FREE. All you need to do - as noted above - is buy adwords and
promote the thing; you will make sales. (You need lots of stuff in your stores
to make them work their best. Critical-mass in an EBAY store is just over 100
items; in a free-stander like ecrater that number is MUCH higher.)
/////////////
Early in 2008, I ran some ads to help folks build EBAY stores. I had to throw
away the gophone to escape the calls.
I worked with several folks, BUT could never figure out how to get the gross
pay much above $10 an hour. The "customers" simply cannot afford to pay
high-end money for the work.
Ads to help folks with ecrater might work now, but I still don't know how to
make it a "business:" it would be just a "job."
Maybe, the trick is to offer existing biznez help in setting up an EBAY presence.
I dunno. At least they have some money to pay, which the little guys just can't
come up with.
Don't over-estimate the number of folks who are "computer savy." MANY folks
have no clue how to do EBAY. It is a "valuable" skill, if you can figure out how
to monetize it at a high enough rate.
/////////////////////////////////////////////
This economy is going to get MUCH worse. NOW is the time to start building
your own enterprise.
/////////////
not spell checked.
Keep your day job, the man ain't that bad.
Steve
I was waiting for your thoughts.
On your first point - I have read a few biz books, enough to earn only a minor, but still know a little. Your comment wasn't harsh at all. I actually started the company I'm with right now (environmental consulting) in 2000. The guy I started it with knew even less than me about business. We've held our own the past 8 years, and I'm sure I could do this for another 20. The only problem is, I don't think I want to.
Everything else you said is waaaaaay over my head, but did make a little sense after reading it a few times.
I guess I just need a change, and buying/selling on e-bay is something that I like to do. Guess I'm in just one of those moods that we all get in from time to time where we think doing our hobby for a living sounds like a good idea. In the end, it is not. Maybe after retirement from the man, but not now. Hmmmm..wonder if an "I Sold it" store in Playa Del Carmen, Mexico in 2020 is an option?
Did I mention Bob is a great guy and sells nice unopened 70's-80's stuff.
//////////////////////////////////
NO insult was intended.
At least five-times each day I get a hair-brained idea that I run
by my guys and gals. Happily, they tell me to lay down and rest
before I proceed. I spend a lot of time reclining.
Buy-It-Sell-It is based on providing a service to folks that insert
themselves into the profit-picture when they are NOT needed.
It is MUCH easier - and more profitable - to just give those folks
a little money and send them on their way. I am NOT interested
in being "partners" with them; that is essentially what they are
in a BISI deal.
First off, VERY few BISI deals can even pay the rent. Much less
support the owner with a living wage.
What do BISIs do with PayPal and credit-card chargebacks on
EBAY? They EAT IT.
You might consider signing up as a "Trading Assistant" and runing
a few local ads. You could pick the stuff up, or let the folks come to
your house (not recommended), or office.
///////////////////////////
Steve's point about rent is the key. I am a landlord and a tenant. I
understand both sides of the deal.
LOTS of landlords will make a deal, right now. Each day a place stays
empty, the rent is LOST forever; no way to get it back. It's better to
have somebody paying something, than nobody paying anything.
We have seen the housing crash get started good. The BIG crash that
will hit commercial RE has not even begun yet.
It may take lots of offers and lots of rejections, but if you want space
at an affordable rate you can find it.
The best RE deal is to buy a little free-standing building that is foreclosed
or about to default. Just keep making +/- 40% offers to the REO guys
at the banks; eventually, one will bite. The only downside is that you
have to have your financing set-up before you start making offers.
The REOs want cash, not promises and they will not help with financing.
////////////////////
My favorite BISI stories are about the gypsy gangs that con landlords into
letting them move into a strip mall. They run ads - paid for with stolen credit
cards - and solicit small town folks to bring stuff and consign it for sale on EBAY.
At the end of the month, before the next rent check bounces, the gyps load
big trucks with the "consigned" merch and head for the flea-marts of Florida.
That is probably about the only way to make money in a BISI.
What's up man? Let me know if you're going to be down my way anytime soon. We can do a beer. I think I'm going to take a few shows off (setting up) at the vet's in 09, but plan to go and shop around. Not sure when the next is. I always foget to take the flier that has them all listed for the year, so I check on the beckett.com site.
For the record - you seem like a great guy too.
Storm - can I call you the swaimee (sp?). I had no idea the BISI businesses were such a donk. Guess that's why there are none around here. Too bad that's also why I thought it was a good idea.
Thanks a ton for the info.