I started my inventory with an investment of $20 a week. You read that right. Every Friday I would take $20 in cash out of our bank account to prevent overspending. Each week I’d buy as many items as we could with our $20. But at the time I was buying just anything and everything I could flip for a profit. I didn’t really have a clear direction, and our first target audience, wasn’t buying.
I knew I needed to change it up. So, I did. I stopped buying the kind of things that weren’t selling, I still have 2 mess kits I can’t get rid of, and I started buying things that would suit a broader audience. It was a strategy that paid off. The first sale I made was an Erik Frost Mora hook knife for wood carving.
That first sale was so exciting! I still remember the feeling. I wanted to duplicate that. I did. Slowly but surely I made more sales. It was a routine for me. Take the $20 down to the antique store, buy something, flip it. After a while, I started to crave bigger profits. In order to do that, I had to spend more money. I was ready to scale, on a macro level.
I don’t remember when I increased the budget to, but if I wanted bigger profits, I had to spend more. Again, things started to pay off. Bigger, higher dollar items, meant bigger profits. As it stands, the most we have paid for an item was $125. I can’t even put it up on the Etsy shop because its too big for us to ship. I’m saving that for my next scale: a booth.
I’ve been ready to scale up again for a wile now, but I’m working on the logistics. That can come in a later blog but I am biding my time for some wheels capable of hauling the kind of items I’ll need for a booth. I can’t wait for that adventure!
But, I digress. At one time, I’d have balked at paying so much for a single item. It was just so far out of the budget! As it stands now, I’m happy to pay $75 for something knowing I can sell it for $225. There was growth there. As the business grew, I was able to invest more money in better items, for bigger profits.
One thing that I do recommend is using a separate bank account for the business money. Right now, I’m are using the same account for WTCO and our personal money. I’ve been able to keep it from getting jumbled up together by using a ledger in the notes on my phone to keep track of the WTCO money.
Bookkeeping is important. Keep track of your cash, so you know how much you can spend, and that you know how much you’ve spent. I also use a spreadsheet to keep track of every item in the inventory. Each item is accounted for, along with how much was paid for it, what the Etsy fees are, and what the profit is. I’ll go over that in a later blog. Make sure to start keeping track from the very beginning, I didn’t, and I regret that. If you’re going to use an item number system like I do, list the items in chronological order. I made some mistakes early on, and I am hoping to keep you from repeating them.
Long story short, you can start out with $5 or $50, just make sure its an amount that you’re comfortable with. Allow yourself to grow, and so will your profits. I wouldn’t advise taking out a loan. You’ll have to make those loan payments wether there’s profits coming in or not. Its okay to start small. Warren Buffet made his money, literally, a quarter at a time.