Thread: What's consider a good roi on selling tangible assets?

I remember reading that 10% roi a year is a good return for investing in stocks.
What about rois on selling things like clothes, electronics, etc? I seem to be getting 30-50% selling things on ebay. I always want to double or triple my return. I'm wondering what people consider a good return?

Kudos for taking the plunge!

I think your question above is referencing two different things: ROI vs. margin.

ROI - return on investment, usually calc'd based off cash in vs. total cash out. Usually best to annualize this number so you can accurately compare to other opportunities and risks.

Margin - is the profit made off selling a service or product. There are a bunch of different ways to calc this stuff, but generally you look at what it cost you to get the product sold and subtract it from what you sold the product for.

Sounds like your clothing sales are a business. You need to look at the amount it costs you to run your business for a year and subtract it from all your sales. That will give you total cash return. Find out how much money was put in to start the business and you can calc the annualized ROI for your business, as opposed to looking at the individual sales.

Does this make sense?

A 30-50% return is pretty solid for an Ebay business. Wanting to double or triple your return is a good goal, and it will probably take a decent amount of research to find a line of products that will offer that kind of return. With my Ebay business, my bread and butter products bring in about a 100% level of return, but I also sell products with lower profit margins, in the 10-50% range, just to round out and diversify my product range. Also, to add to what RealOG said, keep in mind that there can be lots of hidden costs with an Ebay business, especially if it's home-based... Listing fees, Paypal fees, office supplies, printer cartridges, paper, shipping, shipping supplies, gas for your car, home utilities etc. Just don't forget about things of that nature when you're making your calculations.

Always be on the lookout for new products and ways to distinguish yourself from your competitors. Try to have a few well-researched product ideas on the back burner at all times. Remember that great customer service is your number one priority. Keep the worst-case scenario in mind too. What happens if product X suddenly becomes unpopular? How will I get rid of the stuff without taking too much of a loss? What happens if someone else steps up to the plate offering product X at a ridiculously low price? What happens if Ebay changes their fee structure? Should I expand to my own online store?

So, always try to anticipate the future, always be on the lookout for better products, and your business will thrive for years. A 30-50% return is a great start. Keep it up, congrats!

Originally Posted by RealOG

Kudos for taking the plunge!

I think your question above is referencing two different things: ROI vs. margin.

ROI - return on investment, usually calc'd based off cash in vs. total cash out. Usually best to annualize this number so you can accurately compare to other opportunities and risks.

Margin - is the profit made off selling a service or product. There are a bunch of different ways to calc this stuff, but generally you look at what it cost you to get the product sold and subtract it from what you sold the product for.

Sounds like your clothing sales are a business. You need to look at the amount it costs you to run your business for a year and subtract it from all your sales. That will give you total cash return. Find out how much money was put in to start the business and you can calc the annualized ROI for your business, as opposed to looking at the individual sales.

Does this make sense?

Thanks for the replies. Yes that's better stated. I wanted to see what people thought of my profit margin.

RealOG has it right with the two most important concepts margins are usually for business inventory

ROI is a big picture concept evaluating the business as a whole

The answer to your question is a standard of 35%

The percentage is a magic number that will make most businesses successful, in fact when I size up any business I will plug in this number to get an immediate identity

Businesses with smaller margins tend toward a volume concept

General rule: Set your margins first

Originally Posted by unicon

RealOG has it right with the two most important concepts margins are usually for business inventory

ROI is a big picture concept evaluating the business as a whole

The answer to your question is a standard of 35%

The percentage is a magic number that will make most businesses successful, in fact when I size up any business I will plug in this number to get an immediate identity

Businesses with smaller margins tend toward a volume concept

General rule: Set your margins first

As Unicon said, set your margins

Margin, not mark up. I've always thought that markup was a pretty useless number. Profit margin is the gross ROI for an item where markup is something else entirely.

30% mark up- $100*1.3= $130 = 23% margin
30% margin- $100/.7= $142.86