In the last post I wrote about going to the store and buying shoe fresheners for cheap, with hopes to return a profit by selling them online. Here is how it went.
The way I think about running a successful and sustaining e-commerce business means dealing with items that require the lowest warehouse space and turning them around often; Low space, high volume. That's what led me to the shoe fresheners. There were 2 sets, one pair and three pairs, of these at the store. From my initial research, they were selling higher online so I made the decision to get them. Here is the breakdown:
The one pair package was on sale for $2.99 at 6% sales tax for a total of $3.16. The normal retail price on the package was $4.99 and selling higher on Ebay. I posted it and it sold for $4.99 and $2 for shipping for a total of $6.99. My mistake was not accounting for shipping properly. Packaging and shipping went for a total of $4.16. The math goes: (6.99-(3.16+4.16))=$-0.33.
The 3 pair package was on sale for $6.99 at 6% sales tax for a total of $7.40. The normal retail price on the package was $9.99 and also selling higher on Ebay. I posted it and it sold for $9.99 and $2 for shipping for a total of $11.99. I also made a mistake here for not accounting for shipping properly. Packaging and shipping went for a total of $4.62. The math goes: (11.99-(7.40+4.62))=$-0.03.
That's a loss of $0.36, all because of packaging and shipping. I learned I can either increase the price, or lower my cost by sourcing cheaper packaging material. When I try this again, I'm going to do both, along with better market research. If you will be doing this same challenge, set the total selling price higher or get a more accurate estimate on shipping/packaging to maximize profits. Even though this is a loss, I learned a lot about the market of shoe fresheners and packaging needs for shipping. Learning and getting better is all we can do in life. As always, Be hungry, Stay hungry, Be fed. Get out there and go do.