As I have mentioned often here, my resell strategy, for the most part, was focused on big ticket items. In my previous post I outlined what I’ve sold in the last 12 months and the various returns on investment (ROI) I have had on those items. My bread and butter for the last 12 months were iPads. The ROI was ok, 13%. While I used to think that was a great ROI I have since come to the opinion that I can do better, and the pros often do.
I focused on big ticket items, in part, due to my funding strategy. I am not doing this reselling thing with a lot of money. The most I am willing to float is $2,000. Consequently, I would wait until my items sold and I received payment before making my next round of purchases. Such a strategy caused me to focus on the specific dollar amount I was receiving as profit instead of the ROI. So, I focused on big ticket items (iPads) because I wanted to make as much money on one item as possible. My average profit per iPad was $65. I’ve come to realize the error of my ways.
My biggest error was not thinking about efficiency. Let’s compare an iPad that I sold (prior to the bottom falling out) versus three items I recently sold on Amazon.
iPad Pro 128 GB
- Cost = $754.30
- Sale Price = $886.99
- Fees = $60.21
- Profit = $72.48
- ROI = 8.9%
This particular iPad sold in one day and I earned $72. Not bad. Now compare to three items I recently sold.
Brother Label Maker + WD Elements 2TB HD (x2) + Crayola Color Pencils (x8)
- Cost = $87.27
- Sale Price: $34.98, $83.00, & $7.16 respectively
- Fees = $80.74
- Profit = $90.25
- Average ROI 30.2% (Low of 17.76% and high of 93.52%)
In all I sold 11 items and they all sold out over a 3 day period. I earned more profit on these 11 small ticket items than I did on one iPad. Most importantly, I only had to float $87 compared to $754.30 for the iPad. Less risk and more profit; a model in efficiency.
I feel like a dunce for not figuring this out sooner, but better late than never. This does not mean I would not turn down a good deal on a big ticket item like an iPad. It just means my focus when searching for deals will be on smaller priced items with high ROI and a good sales rank. When I find those I will buy as many as I can.