FamilyEbiz

Greetings from Moscow, Idaho!
This is Stephen Beck with Family Entrepreneurs.
Before we get started:
Our family’s Ebay results (the power in the little things):
Month of October (to date, since the month is not over yet)
Sales Total: $1,302.00
One more “before we get started”:
In addition to our auctions, we now have an Ebay store. Check it out here. By now you realize I am a big fan of Ebay. But I am an even bigger fan of selling books on Ebay. The reasons I like selling books on Ebay (and CD's/tapes) are:

1. You can ship them media mail which is much cheaper than shipping parcel post. Thus, people are more likely to buy a book because the shipping does not account for a large percentage of the purchase price.

2. They are easy to order and easy to stock. You can sell new, used or both.

3. They can be very niche oriented. Meaning, you can find a niche where people are willing to pay a generous markup because it is very specific information. Do a search on books on Ebay and look at the subjects. Pick a subject that interests you (and would interest hundreds of other people) and then look at the closed (finished) auctions. You can find out what is popular by what is sold and how much they are selling for.

Well, apparently someone else thinks the same way I do and wrote an Ebook about it. I am reading How To Sell Books Using Online Auctions, by Elaine Kreig Smith and recommend it highly. Since it is an Ebook, you can download it and be reading it in a matter of minutes!

This is THE BOOK on selling books on Ebay, so find out more details here, HOW TO SELL BOOKS USING ONLINE AUCTIONS. She even has a 3 month, no questions asked, guarantee. How can you beat that!

Biblia:

Prov 27:23-27
Be diligent to know the state of your flocks,
And attend to your herds;
For riches are not forever,
Nor does a crown endure to all generations.
When the hay is removed, and the tender grass shows itself,
And the herbs of the mountains are gathered in,
The lambs will provide your clothing,
And the goats the price of a field;
You shall have enough goats' milk for your food,
For the food of your household,
And the nourishment of your maidservants.

Last time we saw that God commands us to know the state of our financial affairs. After all, it is His money that He has entrusted to us. But this passage deals with more than a cursory knowledge of financial numbers. It is also speaking to priorities. In the first part, Solomon is exhorting us to know the state of our herds for a specific reason…that riches and crowns are not forever. He is saying that there are some things that provide for us day in and day out and we should not jettison those in search of the more flashy ones (of course that is not all he is saying, but this is one aspect). How many businessmen have you seen lose it all grabbing for something fancier? They make their money in a “meat and potatoes” business and then use that money to start something more flashy and wind up losing it all. Or some people will take their retirement and invest in a “can’t lose” stock or real estate proposition, and wind up scattering their herd.

A large part of wisdom is gratitude. We should be grateful for all the “stuff” that God has given us and even more grateful for the opportunities that He has given us. Knowing your assets is a form of gratitude. Tending the flock that God has given you is a tangible way of saying “thank you” to Him. I heard a great illustration of this from Doug Wilson. He said that even that beat up car you drive (with the roof liner hanging down) is a gift from God. King Nebuchadnezzar would have given half his kingdom to have one of those and as he drove it around on top of his walls (they were wide enough for six chariots abreast), his people would have thought he was a god!

Practica:

Last time we talked about increasing sales by making the purchasing of your products easier and faster for your customers. So, when all that money starts rolling in, how will you know if you are really making a profit? By the time you pay for the product, the website and the shipping, are you actually coming out ahead? What are your numbers? And how do you interpret those numbers?

First, as a business owner, you need to know your gross sales (all of this applies to family finances as well). All of your other numbers will work off this number. How much did you make (total) this year (or month or week) from the products that you sold? By comparing year to year (and month to month) gross sales, we can get an idea of what we need to do differently to increase sales.

Next, what is your gross profit? After you have paid for the costs of the products that you sell, what is left over?

Next, what is your overhead? This is the cost of your gas, insurance, phone, electricity, your wages, merchant account, website costs, etc. Items that you can not attribute to a specific product, but are expenses none-the-less. Now, if you have a very small business you may not want to calculate every jot and tittle, but the better you know your numbers, the better you can make decisions. For example, our homeschool bookstore does not have an outside store and the electricity it consumes is minimal. But when we go on the road to book fairs, you had better believe that knowing our overhead costs is critical! We choose which book fairs we will attend by looking at past book fair numbers. How much did we sell? How much was the hotel? How much did we spend on food and gas? How much were the booth fees? Some book fairs have smaller attendance, but the attendees spend a lot and make it worth our while. Some book fairs have a lot of people but since it is later in the summer and people have already bought their curriculum, they do not spend as much. Other book fairs have large companies that sell at huge discounts. We know what they carry and try to carry different items. You see, knowing our numbers helps us stay alive and make sound financial decisions.

The final and most important number you need to know is your net profit. This is the money you have after you have paid all the costs of your product and after you have accounted for all the overhead it takes to run a business. This is commonly called take-home pay, but that can be misleading. For most businesses, the owner’s salary is figured in the overhead, since it is a cost of doing business, and the net profit is what is left over after all costs have been accounted for, including your salary. The net profit is then used to develop more business or as a bonus to the employees (owner included). Without a net profit, you have no cushion and nothing to plow back into your future business.

Now, what can we do with all of this boring information? Well realize that there are some relationships here:

If two years have identical gross sales, but one year has less overhead, my net profit increases (a good thing!)

If two years have identical gross sales, but one year I spend more for the same product, my net profit decreases (a bad thing!)

If I have higher gross sales this year than last year, but my net profit remains the same, something is wrong.

If I save $20 a month on long distance by using Total Call for my long distance, what will happen to my net income?

Now, you can take this to the next level by using ratios, but I will cover that next time.

Warmly in Christ,

Stephen Beck
www.familyebiz.com
www.curriculumconnection.net
email: steve@familyebiz.com

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