Monthly Archives: May 2012
Haha, Groupon. We already know that its business model has set itself up to fail, but I always enjoy a little anecdotal evidence. This weekend I finally gave in decided I needed a haircut and checked Groupon for any possible “Now!” deals, which are meant to be used the same day. A good haircut and color in my pretentious town runs at least $130, and I saw a deal for much less than that (I don’t want to give the actual price and get the merchant in trouble) a quick drive from me. Groupon puts the salon’s address, phone number and website in its deal detail page. So I call the number and ask if they have time for an appointment and they book me for an hour later. And then I casually ask (because this was definitely an experiment on my end), “Do you want me to buy the Groupon or just come in?” and they tell me to just come in. Three hours later, I walked out with a great haircut, perfect color and a blowout that’s good for a couple days. I got a great deal, and the salon, although it gave me a heavily discounted price, got to keep 100% of my payment and I tipped on the cost of the full-price service. The only loser here was Groupon, who knew nothing about the transaction, and won’t be collecting 50% of the deal as it normally would. Doomed, I tell you. Doomed!
Weekend Reading for General Enlightenment
Free Kindle eBook: The American Frugal Housewife sounds like it would have made a great blog 200 years ago. The feat of a book that was written as a practical guide on being economical in 1828 still being relevant and entertaining today is considerable. Child’s focus on self-discipline, being level-headed and putting children to work from a young age (none of this “useless play”) will resonate with anyone looking to bring restraint and practical wisdom into their lives. She has a dry tone that made me think she was from New Jersey, but it turns out that’s just how they all talked back in the day. You’ll learn about everything from what to season sausage with and the uses of herbs (and that blueberries used to be called the awful-sounding and possibly poisonous and/or acne-inducing whortleberry). It’s fun to learn about things that seem quaint and outdated until you realize it’s still perfectly applicable today. Consider the section entitled, “How to Endure Poverty”:
That a thorough, religious, useful education is the best security against misfortune, disgrace and poverty, is universally believed and acknowledged; and to this we add the firm conviction, that, when poverty comes (as it sometimes will) upon the prudent, the industrious, and the well-informed, a judicious education is all-powerful in enabling them to endure the evils it cannot always prevent. A mind full of piety and knowledge is always rich; it is a bank that never fails; it yields a perpetual dividend of happiness.
and a discussion of her modern society sounds an awful lot like our own (minus the terminology, I don’t know what a bottle imp is either):
Perhaps there never was a time when the depressing effects of stagnation in business were so universally felt, all the world over, as they are now.—The merchant sends out old dollars, and is lucky if he gets the same number of new ones in return; and he who has a share in manufactures, has bought a ‘bottle imp,’ which he will do well to hawk about the street for the lowest possible coin. The effects of this depression must of course be felt by all grades of society. Yet who that passes through Cornhill at one o’clock, and sees the bright array of wives and daughters, as various in their decorations as the insects, the birds and the shells, would believe that the community was staggering under a weight which almost paralyzes its movements? ‘Everything is so cheap,’ say the ladies, ‘that it is inexcusable not to dress well.’ But do they reflect why things are so cheap? Do they know how much wealth has been sacrificed, how many families ruined, to produce this boasted result? Do they not know enough of the machinery of society, to suppose that the stunning effect of crash after crash, may eventually be felt by those on whom they depend for support?
Luxuries are cheaper now than necessaries were a few years since; yet it is a lamentable fact, that it costs more to live now than it did formerly. When silk was nine shillings per yard, seven or eight yards sufficed for a dress; now it is four or five shillings, sixteen or twenty yards will hardly satisfy the mantuamaker.
If this extravagance were confined to the wealthiest classes, it would be productive of more good than evil. But if the rich have a new dress every fortnight, people of moderate fortune will have one every month. In this way, finery becomes the standard of respectability; and a man’s cloth is of more consequence than his character.
Offline Reading: I continued reading on money, debt and society in Harper’s magazine. The June 2012 issue isn’t online yet, but there were two excellent articles about money, “The Price of Admission” on the cost of college tuition and rising student loan debt and “In Recovery: Twelve Steps to Prosperity”. The first article was a brilliantly written dissection of college as a corporation and one with often bipolar views of itself. The second article introduced me to Underearners Anonymous, an anonymous organization similar to AA or NA. The founder had been attending Debtors Anonymous classes, when he decided that underearning was its own, separate disease/addiction. You may not be comfortable with the term disease or addiction describing something that is not a physical or physiological condition, but the organization addresses an important point: are we putting ourselves in a position to earn less than we are worth? I know that I’ve done this many, many times. Consider the “symptoms” of Underearners. Stability Boredom? I’ve been planning to write a post for some time called “How to be Consistent without Getting Bored to Death”. Giving Away Our Time? Happens all the time! In any case, I find the idea of underearning to be highly relevant. While no one operates independently of society and the economic realities of the markets, it certainly doesn’t mean you have to work for $10 an hour when you have taken the time to learn and develop skills that are worth more to an employer or business or when you have work experience that is relevant to a position in a different industry. If I am serious about earning more and paying off a ton of debt in just over a year, then heading to a meeting might be very worthwhile.
Bloggy Reading: There have been some excellent posts lately. It’s so hard to link to them all! My Twitter feed is always full of good reads on the net but here are just a few good ones:
ee musings hit a homerun with On authenticity in blogging. She is an adept writer and each post is always measured, thoughtful, sometimes funny and always realistic. Not realistic in a “life is shit and then you die” kind of way but realistic in that she sounds genuine and I have become a faithful reader. Plus I loved that she wrote her post on living in New Zealand for me and others curious about life there. Oh and I just realized she’s only 23. Seems like some of my favorite bloggers are the younguns!
Another favorite blogger friend, My Broken Coin wrote How to Make it in America. Good advice that’s not standard or recycled. But I don’t expect anything less from a regular Business Insider contributor!
Erin at Dog Ate My Wallet wrote about a friend from the other side of the tracks. Erin comes across as quiet and reserved (unlike bloggers like myself who fill their posts with exclamation marks!! And italics and bold statements!!) but her posts and her comments on my blog and others always blow me away. Her friend Russ lived a difficult life but that didn’t stop him from doing what he could do for his daughters. It reminded me not to judge other people and to live my life, which is always easier said than done.
Anyone who pays $50 for their car is awesome.
Modest Money wrote a great Mother’s Day tribute to his mom. Savvy, hard-working businesswomen always make me happy.
And lastly, it was a while back but Well Heeled Blog did a cool job putting her 5 financial stressors out there. Of course, I don’t wish her any stressors, but somehow, it seems like she got less stressed about it just putting it all out in written form and enumerating each stressor. She has a lot on her plate but darn if she isn’t staying practical and reasonable. I’m impressed.
I had more of you to add but it’s 2 am and I want to watch Mad Men. Next week: May Debt Update, a Triple Book Review and maybe an LA post. Stay posted!
Happy Halloween: If you can’t have good customer service, do this.
After you’ve started selling on eBay, you’ll discover a weird secret about sales: you now have customers. If you’ve never worked in a restaurant, retail or other direct-interaction-with-the-general-public type job, having customers is a strange new phenomenon. Here are a bunch of strangers who are suddenly asking you a lot of questions at once and a sale might depend on it. When a sale is completed, there are even more questions coming in and you have a few of your own: How do I handle this flood of requests? How do I deal with returns? How fast should I ship? Every successful eBay seller is different. But after having spoken with sellers whose volume ranges from $20,000/month to over $1 million/month, as well as handling my own much more modest sales volume, I’ve developed my own way of doing customer service on eBay. It’s unique to the platform and it’s focused on efficiency, because by its nature, an eBay business is less efficient than a normal retail sales operation. But with lower overhead and start-up costs, eBay is a great place to gain real world sales and customer service experience. My overall eBay customer service philosophy is: be as descriptive and honest as possible, always offer a refund or a way to correct any problems and work customer service tasks when they are convenient for you (you don’t have a 24-hour customer service number for a reason!).
Tips for Strong eBay Customer Service
1. Always describe items to the best of your knowledge with all flaws clearly described. It’s so much easier than dealing with returns. Jeans have a weird oil stain? Mention it and take a picture of it. Selling a Tiffany necklace with a loose clasp? You better describe it! I have found that it is better to disappoint people upfront and I am in the habit of describing items with plenty of detail, several pictures and an open, enthusiastic tone (some eBay sellers sound very unhappy in their product descriptions and make the buying process sound like a punishment. Make buying from you sound like a fun, positive experience). Sometimes I sell stuff I know nothing about and have no way of testing to see if it works, like computer components or SCUBA gear. I list those items for parts only/non-working or as is and with tons of pictures. Specialty items tend to find their buyers and get bid up to their value, even if the exact condition can’t be verified.
2. Offer a No Questions Asked refund policy. It’s easier and faster and most people won’t abuse it. Someone will probably take advantage of you at some point, but not enough to matter. Most customers are very impressed with an easy refund policy and will leave you glowing positive feedback despite not getting the product they were expecting.
3. Do Your eBay Work in Batches. Like any other online activity, eBay listing and management can become a time warp, and you can waste hours listing one item at a time, leaving one feedback at a time, or printing out shipping labels one by one. I do everything in batches: process orders twice a week (since my listings end twice a week), leave feedback for all paid transactions once a week, and account for all sales, refunds and fees once a week. Turbo Lister is a free eBay tool (but it’s only for PCs) and will save you time when you are listing multiple items.
4. Don’t Respond to Every Question. It feels counter-intuitive, but you don’t need to respond to every single question. I’m at the point where my feedback and my extremely detailed listings speak for themselves. In my case (but certainly not everyone’s) most people’s questions are irrelevant. They either ask me to ship to countries I don’t ship to, ask about a detail that is already in the listing or are requesting a product I don’t have. If I have something they request, I will list it and respond to them. But if I don’t and I have no plans to get it, I don’t respond. My eBay sales are not intended to become a big time commitment and I like it that way.
5. Ship items promptly and with tracking. As long as you ship out within one business day, your buyers will be impressed with your speedy shipping. An item could end on Thursday night, your buyer will pay on Friday, leaving you to ship on Monday and still meet the one business day window. Tracking is also vital in case buyers ever claim not to have received an item. USPS does lose mail and UPS is generally better but also more expensive. You will have to decide which carrier works best for your business.
6. Always be polite to a fault in messages and feedback. Since getting a lot more active in eBay in the past six months, I can tell you that some customers are going to be rude. It will be new and unexpected at first, but just know that no matter how detailed your listing and how easy your return policy is, you will never make everyone happy. Some people really enjoy complaining. Just offer them a refund and move along. Don’t get dragged into any fights and don’t defend your product (“What do you mean it’s broken? It was working fine when I shipped it!!”). Once you’ve offered a refund, you’ve done everything you need to do. You won’t change anyone’s mind trying to convince them that you’re right and they’re wrong. The customer’s always right, remember?
Are you interested in seeing more posts about eBay? I can talk about cutting down costs, the logistics of your operation, eBay stores and listing software. But I may look at some other small business ideas first as well as alternatives to eBay. Let me know what piques your interest…
If you’re under the age of 35 or so, chances are that someone has asked you to do something web or tech-related for them. I actually really like that. I miss the old days when my mom would ask me how to get to her Gmail while she was looking at the Yahoo! homepage (now she’s all savvy and checks her Facebook on her iPhone). I’m a pretty active eBay seller and people are always asking me to help them set up their eBay listings or figure out what to sell. eBay is awesome. Setting aside the double-dip they get on their fees (eBay charges fees per listing and per PayPal transaction, the online payment processor it also owns), the magic of eBay is that it provides efficiency to an inefficient market. Anyone can sell their used and new items and can choose whether they want to make their product available to international eBay buyers as well (thereby increasing their market with a single click). But after ten years of selling apparel, electronics and highly technical niche equipment on eBay, I have a pretty good idea of what is worth selling and where you shouldn’t even bother. There are tons of eBay seller guides available to help you research what sells well, as well as Terapeak, but I like to round these ideas out with real sellers’ experiences.
The following are just a few of my favorite products and brands to list on eBay and are based on my personal experience only. These brands sell well even when the item is used, as long as it is a current style and in good condition.
- Tory Burch (People go crazy over anything with that big double T logo)
- Michael Kors
- Tommy Bahama (Men’s Hawaiian shirts in general sell like gold on eBay)
- Juicy Couture Kids (it’s a little less common on eBay and tends to sell very well)
- Whatever the hottest denim brand of the moment is (Seven, Citizens, J Brand, True Religion)
- Under Armour
The important thing about electronics brands is that they seem to sell well even when it is really dated stuff (to you). So if you’re in doubt, just list it. You’ll start to get a feel for what’s popular based on the number of watchers and page views your item has.
- Apple (duh)
Other Stuff that Sells Well on eBay
- Scuba/diving gear and other specialized sporting equipment
- Power tools
- Construction small items like clamps, connectors, fittings, etc.
- Anything related to CB/Shortwave/Ham Radio
- Auto parts
- Vintage/collectible/antique items in popular, low to mid-priced categories (Bakelite, vintage costume jewelry, army/navy/war surplus)
…And Stuff that Doesn’t Sell Well on eBay
- James Perse/Vince/and other non-flashy aspirational designer brands (Rule of thumb: does it have a big logo? Sell it on eBay!)
- Generic clothing (Don’t expect to make a living selling plain black t’s unless you are already a well-established seller)
- Super-specialized items that don’t have a large enough audience on eBay to sell for what they’re worth (like high-end antiques)
There are many different ways you can go with an eBay business. You might start out just cleaning out your house and garage of old stuff you never use and realize you really enjoy selling and don’t want to stop (especially when you’re just two feedback away from the next color star!). Then comes the more difficult task of actually choosing a few items to buy over and over to sell on eBay. It might take a few tries, but you will eventually discover what works for your business.
Next time on The eBay Series: Successful eBay Customer Service
Remember Post #1? I shared one of my biggest financial goals: to own and invest in real estate. It is still my second biggest priority (after getting out of debt), but I think I need to admit to myself that I am just not prepared yet. Let’s say I get approved for a mortgage, find a place that would make sense as a rental property and come up with 10-20% down. If I do that, I would have probably 45 cents left to my name following the closing of the house and zero slush funds to take care of buying appliances, maintenance, repairs or anything else. And then what? Well, shoot, we need a washer and dryer, so it’s off to Home Depot for the zero-percent interest card! And Macy’s! And Lowes! And Bed Bath and Beyond (just kidding, I hate that place)! I would be back to growing my debt in a heartbeat.
There are a lot of other things I need to consider before buying my first place:
1) I need to reduce my credit card debt: I have a horrible confession. I realized last month that while my overall debt has been going down, my credit card debt has stayed almost exactly the same from when I began tracking it last June! I have four debts, two being credit cards and taking up two-thirds of my total debt and the other two being my student loan and car which are less than $10K combined. I’ve brought my Discover card balance down somewhat, but I need to attack the remaining $4,300. It needs to be gone in less than six months. Being down to three accounts and that much less in credit card debt will make my repayment a lot more manageable and a mortgage a lot more obtainable
2) Additional, dedicated house funds: I need at least a $5,000 slush fund just for the house (separate from the down payment) for unexpected closing costs, appliances/stuff for the house and funds to cover at least two mortgage payments in case I became unemployed. Current amount: Um, $10?
3) Who’s living here: me or tenants? I asked Money Mamba the question a few weeks back: do you buy real estate investment property when you rent your own home? He made some great points as did the other readers and it doesn’t come down to any hard and fast rule, but what makes sense for you. On the one hand, the area I want to buy in is not bad at all (it’s in Orange County and all of the OC looks idyllic compared to LA, where unless you’re in Brentwood, it can look like one endless strip of dingy corner stores and broken sidewalks), and I would be 100% comfortable livng in the place I eventually plan to rent. But does it make sense to make a move from LA down to OC, relocate, set up the condo with appliances and whatnot, just to move out in 6 months to rent to a tenant? And will we have another 20% down payment ready for a second place or will we go back to renting? I haven’t decided at all because I’m so hell-bent on just getting a place, which brings me to the title of this post…
4) I’m Too Emotional to Make Rational Decisions in Real Estate: Maybe it’s our culture (I’m Iranian), but I grew up around a lot of real estate talk and near-real estate worship. I know more real estate agents in the Southern California area than seems reasonable. I’ve spent many a weekend house-hunting with friends, family, heck even acquaintances if they invite me (I love open houses). So I have always, always, always wanted to buy a home, or maybe lots of homes, or maybe an apartment building, or a mall or a parking lot, or JUST SOMETHING, damn it. Sometimes it feels like I have a “To Do” list for my life and it looks like this:
It’s true. I put the pressure on myself and I let it get to my head. I think I am way behind in everything because I don’t own any real estate yet. But it’s not a small decision. It’s not something you just jump into because it seems like the right thing to do and everyone else is doing it. More importantly, I chose to live a different, non-traditional life for a couple years and made no effort to save money or stay in one place. I loved it and will never regret it. So why do I beat myself up over something I chose? It’s irrational. It’s emotional. Its like PMS, but worse because it’s in my head every day like some grating video game background music that loops over and over and over again because you didn’t shut off the Xbox. What I am trying to say is that I can’t trust myself to make reasonable decisions that aren’t intricately tied up with my expectations of lifestyle and perhaps wanting to impress people or show them I’ve made it when it comes to real estate. I don’t like that part of my thinking and I need to get it straight on my own about why I am buying a place and why it makes sense. And I have to understand that owning real estate with a mortgage is not going to magically solve all of my financial wants/needs and keep me from worrying about money ever again. It’s more stuff to think about and new stuff to take care of. I think a good next post in this series will be getting past my more immature expectations of real estate.
The market in Southern California has started to recover, but interest rates remain low and there is still plenty of inventory in Orange County and Los Angeles (not so much in San Diego). So if I really want to buy that house and not just dream about it, I need to get serious about paying off my credit card debt, separating out savings for a house fund, and not getting rushed into something for “fear of missing out”. That’s been one of my biggest flaws in my thinking, which is worrying just a little too much about what others are doing and how I compare to them. I loved Mo Money’s post on that idea, that sideways glance (how did he get that?) and she has some great advice on getting over it and living your life or, to put it in a more annoying way, “do you”.
I still dream and obsess over real estate. But I need to develop patience. I’ll continue to read and stay current with the market. I’m just getting my head in the game so I can do this thing right.
Do you guys have any great real estate first-time experiences to share? Is there something you wish you had known before you purchased your first property? Would you buy a property to rent if you didn’t own the home you live in? Or if you already do that, does it still make sense for you?