Someone on Reddit had a BF with a lot of collectible action figures, and an idea to create a home business selling them for profit. This was my answer, edited, explaining how I think about selling and space issues.
He needs to be a better seller. [Oooh, I was a little blunt, and mean, there.] He should probably focus on finding more ways to sell what he has.
I sell stuff, for a profit, and there is a certain quantity of inventory required to have stable income. Here’s the algorithm, in case he doesn’t know it.
- Figure out what %age of the inventory sells per month.
- Determine an income goal, of income/month.
- Determine the space required to store an inventory large enough to achieve the income goal. Find the rent on a storage unit large enough to contain this inventory.
If the rent exceeds the income, then it’s not a viable home business.
I think everyone living in an apartment, or house without extra rooms, who starts a collectibles-selling home business, needs to reckon with this relationship between income and space/rent.
Sellers who need to acquire more inventory, also need to look at the profit, as well.
I calculated the income before deducting the cost of the goods. Consider the profit: you can still sell inventory to pay that storage unit rent, and lose money.
A 5×10 storage unit in my area is $122 a month.
Here’s how I’d think about it. This is a little different from what I described above, but the thinking is the same: this $122 storage unit is large enough to store 14 plastic bins.
If 20 boxed toys fit into a bin, that’s 280 toys. If the profit per doll is $30 on average, then I need to sell 5 dolls a month to make the rent. (The top of the market on Ebay is selling dolls at $60 to $100 per doll, pretty much.) That’s 1.7% of my inventory.
If the average profit per doll is $6, then I need to sell 21 dolls per month to make the rent. That’s nearly 10% of my inventory.
At this point, I’d see if I could create Ebay listings, and find sales venues, where I could get $6 profit per doll, and sell 21 dolls in a month.
If I couldn’t sell 21 dolls, then, there really isn’t a business.