The new year is just around the corner, and there is no better time to make changes and improvements in your reselling business to help you scale and grow in 2022.
Here are some tips and tricks to help you start quarter 1 strong and have the most profitable year ever for your reselling business.
Reseller Tip: Add these books to your 2022 reading list: Profit First by Mike Michalowicz and Rich Dad Poor Dad by Robert T. Kiyosaki
Step 1: Analyze Your Numbers
You cannot create goals if you do not have a mindful grasp as to where you’re currently at. If you have been slacking on book-keeping, it is time to catch up. Before setting goals for the new year, you might consider determining the following:
a. Current Value of Inventory
That is, the cost amount of unsold inventory you currently have.
b. Average Sale Price (ASP)
Your average sales price overall, and also your average sale price on each reselling platform. This is a measure of sales price rather than gross profit.
c. Average Cost of Goods (COG)
The exact number here might not be as important as your average Return on Investment.
d. Average Return on Investment (ROI)
An approximate measure of an investment’s profitability. A percentage is calculated by subtracting your COG and any fees or costs from your revenue to obtain your actual return or profit. The answer is a percentage, and your average percentage is the focus.
e. Average Sell Through Rate (STR)
A metric that calculates how long it takes for inventory to become revenue in evaluating the amount of your inventory that you acquire in a given period versus the amount that you sell in the same period. The answer is a percentage, and you might choose to calculate it monthly or quarterly.
f. Your Salary Number of Hours Worked Each Week
These numbers are crucial to ensure that you are adequately paying yourself and still profiting. This includes a calculation of the hours you work each week and the amount that you are paying yourself each week.
g. Amount You Pay in Products and Services
It is wise to calculate what you are paying each month for various costs (in addition to inventory) including the following:
- Employees or contracted help
- Supplies and Products
- Software and Applications
- Book-keeping and Services
- Utilities and Gas
- Advertisement and Marketing
- Anything Else
h. Total Revenue for 2022
- Average Weekly Revenue
- Average Monthly Revenue
- Revenue by Each Quarter
i. Amount Paid in Taxes
Consult with a tax professional to be sure you are claiming all of the deductions to which you are eligible.
Knowing your numbers is crucial. These values can be intimidating. If you are like me and you started as a hobby seller (and you’re not a trained businessperson), it can be difficult to analyze data and calculate these metrics. But these numbers are among the most important figures for your small business- they’re the ones that you should be aiming to improve (whether that means to increase or decrease) to grow and scale. Many of your goals will likely be centered around these numbers.
Reseller Tip: Use Vendoo for inventory management, revenue-and-profit tracking, and powerful business analytics to grow and scale your reselling business in 2022.
Step 2: Mastermind Strategy for Brainstorming Goals
Once you have a grasp on your current numbers, a great way to set goals is to consider what is referred to as the mastermind strategy. Analyze:
- What is going well in your business?
- What is not going well in your business?
- What you want to change?
- What takes up most of your time?
While it sounds corny, writing this information will assist you to brainstorm goals for your business. Of course, the best goals efficiently save time and money while also yielding further revenue.
Reseller Tip: Consider joining (or forming your own) mastermind reseller accountability group. I participate in a daily group with other resellers to assist in the evaluation of my performance, implementation of goals, and peer-review business coaching.
Step 3: Establish Long-Term Goals.
Brainstorm your goals. Be specific with your goals, setting figures or timelines for each. For example:
- “To earn $xx in profit in 2022” “To start selling on Shopify and eBay”
- “To move my business into a warehouse”
- “To be more sustainable and ecologically friendly”
- “To replace the income from my job and start selling full-time”
- “To earn enough to pay off my student debt in the amount of $xx”
- List 25 new items each day
You may also like: 9 Steps to Start a Reselling Business Online for Profit
Step 4: Establish Short-Term Goals
Smaller goals will help to effectuate your long-term goals. Long-term goals don’t happen overnight but take diligent work and planning. Your short-term goals might be daily, weekly, monthly, or quarterly; all working toward accomplishing your long-term goals.
For example, some short-term quarterly goals that correlate with the long-term goals above might look like:
a) To earn $xx amount of profit weekly, listing daily, cross-listing to more platforms, relisting daily, enhancing SEO in descriptions, and advertising more. Here, you would more narrowly tailor specific goals for each of these activities to help accomplish your profit goal.
b) To start listing on a new platform(s), you might choose to set a start date, by which time you will have done some research about the platform, created an account, established book-keeping, and prepare to start cross-listing.
c) This larger goal will take more planning than other goals. You might start with research about warehouse space near you and the average rental/purchase and insurance costs to determine if (or when) a move would be feasible for you. Thereafter, you will have a better sense of the profit required to make the move. Similarly, consider the logistical concerns about moving.
d) A goal to be more sustainable is easily accomplished with small acts each week. For example, you may decide to change your packaging supplies and procedures. These goals are easy to implement on a weekly or monthly basis.
Short-term goals should be achievable and calculated to assist in the completion of larger motives. Ascertaining long-term and short-term goals is helpful for you to stay motivated and concentrated.
Step 5: Write Down Your Goals
Categorize your goals by ongoing daily goals, short-term, and long-term. Post them where they are regularly visible. Consider your goals when confronted with decisions, or when you are developing new ideas. Each day, you should be making small steps toward the realization of your goals. Regularly evaluate, brainstorm, and research ways to achieve your goals. Most importantly- get selling! Your long-term goals will require time and money.
Your daily goals should inspire your short-term goals to generate growth and revenue, which will help you to achieve your substantial long-term goals. Hard work and a Goal-Oriented Profit-First Mindset is the key to success.
Step 6: Crunch Some Numbers
If you are not in the habit of meeting with an accountant or tax professional, I highly encourage that you do. Most goals focus on achieving the desired level of profit (or expansion that requires capital). As such, it is important to analyze your Cost of Goods (COG), Return on Investment (ROI), Inventory Management, and Book-Keeping practices.
COG refers to the price you spend on an item for resale. Return on Investment (ROI) refers to total profit; that is, revenue minus expenses- including COG, platform fees, taxes, supplies, dry-cleaning, repair, shipping costs, and anything else which you spend money on to effectuate the sale of that item. For business success (as well as tax purposes), stay mindful of your expenses and earnings. There are many tools such as Vendoo which will help you to calculate these metrics.
As your business grows, strategically make improvements to your processes. Strive to save money and maximize efficiency in each step of the resale process. Research how to inexpensively source items for resale, and source strategically to maximize ROI. With growth and revenue, consider investment in supplies and software to streamline the photography and listing process. Conduct ongoing research about Search Engine Optimization (SEO) and e-commerce selling. Consider enrolling in a course that will help you achieve greater revenue on various platforms. Organize your inventory management and book-keeping systems. Remember that time is money.
Step 7: Follow-Up with Your Goals
It can be tough to scale, and difficult to ascertain how to increase efficiency, output, and profit simultaneously, especially for hobby or part-time sellers with limited schedules. As such, it is important to constantly evaluate your performance and your numbers to see what is working. In evaluating the progression of your goals in comparison with your efforts, you will notice what is working, what is not, and which goals need further attention.
When you are ready, do not be afraid to invest in your business and your goals. There are many things that you might consider paying for to assist you in productivity and increasing revenue that will pay for themselves. The goal is to have such a firm grasp on your numbers that you can be sure that the investments are yielding the desired results.
In 2022, you might consider the following:
a. Investing in Your Business:
Investing in new products is a great way to increase productivity, save time, and make a true difference in your daily operations in a calculable way. For example:
|Current Situation||You Might Consider|
|Regular Printer Label||Printer with self-adhesion for faster shipping|
|Handheld Steamer||Stand-up steamer with a large reservoir for quicker preparation|
|Inventory Spreadsheets||An Inventory Management System Like Vendoo|
|Photo-Editing for Hours With Many Application||Enhanced Photography Equipment|
|Piles of Pieces Awaiting Alteration Or Fixing||Hire a Seamstress or Tailor|
|Searching for Sold Items for
|A Comprehensive SKU System|
|“Sharing” or “Refreshing” Frequently||Automated Assistance or a
your listings Virtual Assistant
Be sure to check out the TOS of where you sell and use it at your own risk
|Shipping Daily||Shipping every other day.|
|Write Down Your Miles Each Day||Download Quickbooks Self Employed To Automatically Track Your Business Miles|
While these will not be relevant to everyone, they are all true examples of investments that I have made over the years that have saved me time, increased my productivity, and enhanced the value of my work.
Reseller Tip: Most business investments are tax-deductible
b. Hiring Help
You are one person with two hands and twenty-four hours in each day. Once you have utilized all of the efficient products and software you can, you will reach capacity, and require further labor to achieve further productivity and income.
c. Changing the Way you Work
You might consider enhancing your COG (which you would usually strive to keep as low as possible) to enhance your ASP. It took me quite some time to recognize that having 20 weekly sales in the amount of $40 each is better than having 40 weekly sales of $20 because I was doing less work and spending less time to achieve the same amount of profit. While this may sound obvious, it takes a true analysis and humble self-reflection to recognize that your hard work does not always pay off if it is not skillfully focused.
d. Liquidating & Starting Fresh
Do you have some really, really stale inventory- I mean, inventory that has sat around for literally years? Inventory that -even if you sold for the current asking price- would not yield a profit that would pay you for your time, COG, years of sharing and relisting, facilitating offers, answering questions, accounting for, storing, and the time it will take you to ship? Donate it.
While you may be inclined to recoup anything you can for inventory you are “upside down on”, any further time that you invest into that inventory will make you more upside down. That time will be better spent on new inventory or practices that create revenue and profit. The new year is a great time to donate some stale inventory and start fresh.
Remember, that with access to ample resources, donating some is an important and wonderful thing to do (and most donations are tax-notable).
What are your business goals in 2022? Please feel free to share any tips, tricks, or comments below!