Rob & Melissa Stephenson from Flea Market Flipper share a huge mistake that resellers make and how to avoid it.
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Reseller Hangout Podcast - A Huge Mistake That Resellers Make, Are You Making It Too?
Rob: What's up, pro flippers? On today's episode, we are talking about one huge mistake resellers make, and maybe you're making it too.
Rob: Alright guys, so are you making this big mistake in your reselling business right now?
Melissa: So what is this? This, before we even dive into the mistake, this is something that we have struggled with over the years. Absolutely. It's something that we've had to work at. It's not something that comes easy or naturally to either of us in our business.
So we have to constantly be working at it. And so what is that mistake? It is not knowing your numbers in your flipping business.
Rob: That's right. You can boil this down to really knowing what your profit is, knowing what you're paying for the item, what you're spending on shipping, what you're spending on eBay fees or whatever fees associated with the item, repair bills, whatever it is.
Knowing all that stuff and having it broken down to individual items to know how much money you're really making in your business.
Melissa: Yeah, it, it's something that we, I guess, we started, you've, we've been doing this all our whole marriage. You've been doing it forever. And when you're kind of like a hobby seller, you're just selling stuff, make some extra money, it's just kind of like, eh, made a little bit of money.
I wasn't really like, not really treating it like a business. When we finally started treating it like a business back in 2014, 2015, 8 years ago. Yeah, yeah 2015, we started treating this as an actual business, you know, then we started really keep track of numbers. It wasn't just like, oh, go flip something.
We made extra couple hundred bucks or a couple thousand bucks. And it's like, okay, well now we really need to know what, what is, what are the things that are doing well in our business and what do we need to work on? And it's, it's, it's ironic. Not ironic, but it's something that's weird that neither of us are numbers people.
So I would think you would be a numbers person cuz you like math, but yeah.
Rob: Nope. But I'm not. So it's one of those things that, yeah, this will totally make or break your business if you do not know how much money you are making. So a lot of resellers, they do volume. They do hundreds, thousands of items in a month.
And that's why it makes it very, very difficult to keep track of that. Now what,
Melissa: well, it's difficult if you're not organized. So you just have to stay organized. True. You have to have a system in play, whether that's your numbers are, you know, each month you download it onto a spreadsheet or a weekly, you do it.
However, whatever works for you. You just have to be consistent in keeping those numbers. So.
Rob: And if you have those numbers, you can actually calculate what your hourly rate is. How much are you making an hour? Is it better for you to go get a job at McDonald's and make money or is this flipping business really paying off, and you're able to make a good income at flipping, and you don't, you can't figure that out unless you know your numbers, you know exactly how much you're making per item and per the time that you're actually working on your business.
Melissa: Yeah. Time is another factor that a lot of people forget about. Like, you have to know, is it worth your time to do. And like, you know, in the beginning when you're just starting out, obviously you're trying a little bit of everything and it, you know, you're not, you're gonna take a lot more time to do the things in the beginning than it will take you as you progress over time.
And then maybe as you grow in your business, maybe it's not worth it to, to clean, take pictures and make $10 on an item. Maybe, you know, you're, maybe your low number goes up a little bit. Like before you're fine with making $10 profits or $20 profits. And now maybe like, okay, I need to make a little bit more than that, or it's not really worth my time.
And now you're more experienced, you can do things more efficiently. So, so yeah. So that's one of the reasons, or one of the ways to make sure that you are just being efficient with your time.
Rob: Absolutely. That's definitely one thing you wanna do. Do we have any tips that you guys can follow to help, track this?
Really help get good at, you know, tracking your numbers, tracking how much money you're making, how much money you're spending to know that you are, do this is the right business for you?
Melissa: Well, I think it really depends on the person. So I am actually a pen and paper person. So when we first started really, like I had a log, an actual, income expense log that you know, had all the columns, whatever you pick it up at, whatever store, Staples or whatever.
And that's how I kept numbers and it works for me cuz I like pen to paper. Obviously over the years you evolve so that I got to spreadsheet. So a spreadsheet and a spreadsheet still, a simple spreadsheet works wonders. You don't need any fancy software. You don't need, if that like oh, is overwhelming to you.
You don't need any of that. You can just do a, a simple spreadsheet. The the biggest thing is you just have to be consistent with it. Absolutely. But there's also great software out there too. There's QuickBooks. If you use a cross listing tool, some of them have, like Vendoo we know has, bookkeeping within its thing. But like we're not big, I don't know, like bookkeeping is not your favorite thing. No, absolutely not.
Rob: I, I have a spreadsheet on my phone. That's what I use is actually a spreadsheet in there that I can jump in there. I can put the date that the items sold, I can put the amount of the items sold, how much I paid in eBay fees, how much I paid in shipping, and I usually break this down.
I don't do it by the sale. I should. But I usually break it down by the month. So once we go through January, I go in and I do my six seven sales that I did in January. February, the same thing. Remember, we're not doing, our model is not doing volume we're, which does make books a lot easier. It does, absolutely.
So I can easily go back and calculate. It takes me minimal time to go back, jump into a month, yeah. Jump back into eBay and do that. And then I also keep a running tab of items that I'm buying. I keep a tab of how much I'm spending on those items. So when I do sell an item, yeah, I have a another, in my notes, I have another note that shows me, hey, I just sold this stretcher.
I paid $183 for this stretcher. I sold it for $4,400. Now I know I can go in and put it all in my spreadsheet of how much money I actually made, the total profits on all that stuff. So I have a great idea month by month how much we're making and how much Yeah, we're actually the total profit is on the whole business.
Yeah.
Melissa: Cuz you want, you know, good profit margins. If you're doing this as a business, this is your side hustle, extra income, maybe it's gonna be a full-time income. And then that's what it really makes, it's really, really important, especially if it's full-time that you're doing the things that are gonna be making, increasing your profit margins or making you more money.
And I also want to note too, like knowing your numbers really helps you know your strengths too. So something that maybe takes a lot of your time, it actually might be worth hiring out, but you would only know that if you know what you're spending on an item. And you know, maybe it's worth hiring somebody to come clean the item for what, x amount of dollars an hour. You know, like people do odd end jobs. You can find on the internet, there's a couple services out there that you can just find people who do like handyman work odds or whatever. Or maybe you find somebody. There's other people, I, I've seen a lot of people who do listings for people.
So maybe that just takes too much time and you don't wanna do it. Or you hire somebody to come take pictures of your items, whatever it is. But you can do that if you know that your profit's still there.
Rob: Absolutely. And this is huge, and this even strikes my memory right now, why? We're, we're in the middle of a, a coaching, one-on-one coaching program that we're doing in one of our students.
Brandon actually, we had a conversation, we had a assessment with him and talking to him out about the business and what's going on, and he was like, dude, I bought this, this cooking, this, this Viking cooktop, and I spent days on getting this thing clean. I took it apart and I did this, and I really got it down to this and this and this.
And I'm like, listen, you, you might need to hire somebody that you can have, even like somebody who has a cleaning background who might be a house cleaner who might be a commercial cleaner and ask them a couple hours. Exactly. Ask them if they'll, they're willing to work a couple hours a week and come up with a price that you can do it.
But that way you can, you can do other stuff that is very, very needed in your business versus just cleaning something, cleaning something really well, so you can get good pictures of it. And he's like, man, I never thought about that. And it's one of those things that absolutely there are portions in your business that you can hire out and you don't have to pay a ton of money to do it.
I used to have a guy that did all of my stuff. He detailed it all, everything before I, I pictured it and before I shipped it out, I would have him work on it for a couple hours and he would detail it and clean it and get it ready to go. And then I would get good pictures and then would have to sit in storage for a little bit until it's sold.
And then I would have them do the same thing before I threw it on a pallet and I shipped it. So that's one of those things that it was worth it for to pay somebody to do it versus me having to spend my time doing it when I can do stuff like sourcing and, and you know, stuff that really makes me more money.
Melissa: And that you love to do.
Rob: And I love it.
Melissa: So it's the stuff that, yeah, you can live into your strengths, the stuff that you like to do, and then hire out the stuff that you don't love as much. And. But only if the numbers make sense. You have to know that going into it. So like some of our bigger items that are gonna make a couple thousand dollars, we can hire out somebody to come clean 'em for a couple hours or whatever and or a handyman for projects.
And that's a, it's something that we're still a work in progress all the time. Like you did have him and you don't have him anymore. He doesn't do it for you. So now like we're gonna hire somebody else hopefully soon. But it's something you keep putting off. Absolutely. Cause it's not like, it's not an easy thing to do because you.
You envision that now I'm paying somebody to do it, so now my profit margins are going down. So it's like I could just do it myself. But that's when you have to evaluate what is your time worth and where can you, like, where are you best suited in your business? Absolutely. So, absolutely that's something we struggle with so that we have to keep constantly growing and we wanna, you know, always keep you guys updated with how like we're growing our business and our flipping business and trying to scale it.
Cuz we do, like you even said like, we're not taking on any more projects. Cause sometimes you can get great deals on stuff, but a lot of times they need like one thing fixed and that's typically the stuff that gets put on the back burner.
Rob: Exactly. The bottleneck, the bottleneck of the business.
Creating the income because something needs to be fixed or tweaked or you know, cleaned whatever it is, a super deep intense cleaning on a cooktop, something like that. Yeah. So that's why we are trying not to take on projects to actually get all of the stuff that we have that's not listed, get it listed.
And yeah, that's the big thing about it as well. When you get to the point realizing how much profit are on your items that you do, like Melissa said, you do have some money that you can actually, you know, pay somebody, some of that profit to actually clean the items and then you can be doing other stuff that makes you more money.
So when you know what your dollar amount is and when you can start getting your profits higher and high, higher and higher, and go after those high profit flips, it makes it that much easier to be able to pay somebody to do some other stuff in the business that you don't either like, or you know, that you should not be doing because you should be doing the revenue generating portion of your business.
Melissa: Right.
One other thing that kind of goes along with this, it just popped into my head, was like even some things in the beginning, like when you're trying to find out if this flipping thing is right for you or whatnot, people ask us one question we get all the time, well, I don't have a truck or trailer.
I don't have, you know, all this, all these tools or whatever. I'm like, you don't need it. You can start, you could rent a truck for, I think U-Haul is $15 or $20 a day or something. Yeah. And we've had people do that. And then they decide. I go, well, that was definitely worth paying a little bit. And I didn't have to go buy a truck.
I mean, one of our coaches, Stacy, she didn't get a trailer till just like last year, and she does thousands and thousands of dollars of these high, bigger, high flips. She's been doing it for years and she just got a trailer maybe two years ago now. A year ago?
Rob: She didn't have a truck and all she had was a van, a minivan.
And that's what she did. She ran her business for the first couple years. Yeah. Of her business. But I also think about Lisa. Lisa jumped in and we helped her find one of a, it was a double, cooktop, or, sorry, a double oven. Oven, yeah. And she didn't have a truck. She didn't have a trailer. She didn't have a garage.
She lives in an apartment. Right. She, exactly, she rented a truck to get it back to her place where she got pictures, sold it in a couple weeks, and then rented - for $1,000 bucks. Exactly. So her total profit after she paid for the rental of the truck to pick up the item, to deliver the item back to the freight company, all that.
It was over $600 or $700 is what she made profit on that, that item. But she didn't have any of the tools needed.
Melissa: But she hired out what she didn't have. She, but it's still, the numbers made sense. And so.
Rob: Hopefully you can think about that and think about maybe I can do this too, to the next level and not have to go out and buy.
We always tell people, don't go out and buy a truck. Don't go out and buy a trailer that comes down the line. Once you start making money and you really start getting good, and you enjoy what you're doing, then you can go out and invest back into the business. Invest and get a truck, invest and get a trailer.
When you get to the point of you're making money, you're enjoying it, and you're loving what you're doing, then you can go out and go to that next level until you get to that point. You build up that, that cash flow, make that money, keep that money coming in so you can go to the next level when it's time to go to the next level.
Melissa: Yeah. I just wanted to add too, like also keeping good records, keeping good books helps you when it comes tax time. Like we, taxes are not our favorite topic either. You, you kind of zone out when we talk about taxes. Absolutely. Bookkeeping is not his favorite. We actually did, we are friends with Mark Tew, from Not Your Dad's CPA, we interviewed him, I think it was episode 21, so you can go back and listen to that. I, I believe it's posted on YouTube as well, but he has a whole, if you're a reseller, he has a whole reseller tax academy that he helps you prepare your business, for tax season. So very beneficial. We'll definitely put a link to that below cuz that's something that could help you just be more organized and be more prepared when it does come to taxes.
So, so because nobody loves, you know, taxes. But as a business owner, there's a lot of benefits too. So it's, it's important to just be organized and, and have your numbers and it, it is, it's a struggle for us. Like, and it's so weird. We have a lot of differences in personality. Like we're very different people, but usually one of you, one person in the relationship is like numbers driven, a numbers like data analysis person. And we don't have like, neither of us are. So we that's definitely been a weakness that we've struggled with. So.
Rob: But now we have a CPA who helps us a ton.
Melissa: We just hired last year, so, so you don't, definitely don't have to have that in the beginning.
We didn't have it for years, but, but it might be worth it at some point in your business to do that. So, so yeah, so knowing your numbers is a huge, a huge deal, absolutely in your business. So.
Rob: If you guys are listening to this or watching this right now, where can you go to learn more about this flipping biz?
Melissa: You could check out freeflippingworkshop.com. We kind of go through our business model, how we do things, and see if it makes sense for you. So thanks guys.
Rob: You guys rock. We'll talk to you on the next episode.