Tracking Your Profits

I never tracked my profits until recently. I just didn't have time to.

Now that I have a little more time, I track my expenses and sales on a spreadsheet. I find it interesting and much more satisfying because I can actually see how much profit I made on each unit.

Does anyone else track their profits? Any tips?

Does anyone else track their profits? Any tips?

Yes.
No.

Currently (for first six months of year) running at 2.12 x the money.

Worst year was 1.59 times the money.
Best year was 2.68 times the money.

Tracking overall profit has been easy...ZERO! In last three years NADA.

Now comparing how much I buy a unit compared to how much total sales are? Haven't done that in a long while. If I had to guess overall it's about 2.5:1 ratio. This past Spring was brutal, probably only getting a 1.25:1 return. Last Fall was good, I was getting probably around 3:1 return.

I've pretty much figured to cover cost of inventory & all operational costs I need to triple the money across the board for the whole year to make a "profit". That hasn't happened yet. Still too competitive out there. 

Tracking overall profit has been easy...ZERO! In last three years NADA.

Will get to that quoted statement above in just a minute, but meanwhile...

I can't believe you haven't done a more accurate analysis of your profitability since all your other assesments seem so spot on as to approach to buying, selling, etc.  I would have thought that you would have closely figured in expenses such as gasoline, storage, dump runs, purchase price, etc and would have balanced those off against the money coming in.

Now to that ZERO profit statement. Are you saying that you just BROKE EVEN on all the locker work you've done...or worse, LOST some money during the total time you've been doing it?  I know it's fun to at least search for the goodies and anticipate the goodies, but if you truly haven't made ANY profit over the long haul, how could you have kept it up for so long?

I track mine month by month, include all expenses (even data purchase for the iPad, entry fee to some auctions, gasoline, etc) and know what the monthly and yearly ratio is on a running basis. I couldn't just go with a ballpark figure.

I have one friend who buys a fair number of lockers on a regular on-going basis; he stated the other day (after about 1.5 years (to 2) of doing this that "I started with $5,000 and I have $5,000 now". To me that's a lot of work for staying "even".

This fellow has a store that he admits after about 8 months of operation is "breaking even" so at least he is tracking that a bit more diligently. He does better at his 6 times a year yard sales saying he does between $2K and $3K each time, (frankly I don't believe that) but even if true, remember he buys lockers regularly for which he pays $800 to $1,500.

Anxious to hear your response on the ZERO profit statement.

From the very beginning I treated this venture as a business and not a hobby even though I've only been doing storage auctions part time until very recently. I have an accountant that does my books and according to him the last 2 fiscal years combined I have a running loss of around $7,000. Since this was part-time business, I had other income supporting me. Even though I have a running cash loss, I probably have 3 times that amount in inventory & property. Inventory & property is an asset on the balance sheet not "profit". If I were to sell all I had in one month then I would be looking at a killer profit! Unfortunately, I only sell a fraction of the inventory per month & there are fixed operating costs plus variable costs always accumulating. Not to mention buying more inventory (storage units). I no longer have the luxury of having one good month, say making $2000 in "profit", then taking the month off to enjoy the spoils. The fixed cost of the business are always chewing away and will eat up the profits from one good month quickly. The first 1-1/2 I would itemize the units to determine how much each unit would make. I no longer itemize units and just do a month to month cash flow sheet. I had an expensive Spring & sales have been slow this summer, but I'm showing around $1700 "profit" for the year. How I fair at the end of the year will just have to wait and see.

By the way... Another reason I may have less profit then expected is I'm one of the VERY FEW who run this business by the books! How many of you remit sales tax on all sales to 2 different states? How many of you pay business licensing & business tax in 2 different counties? How many of you pay yearly articles of incorporation fees to the state? how many pay excise tax to the state? How many pay income tax to the State & Federal Government on your profits?

Thanks for the two answers !  That says a lot more about the "profit". I do some of what you say in each of those two posts, but the two state thing is not a concern for me as an example.

By the way... Another reason I may have less profit then expected is I'm one of the VERY FEW who run this business by the books! How many of you remit sales tax on all sales to 2 different states? How many of you pay business licensing & business tax in 2 different counties? How many of you pay yearly articles of incorporation fees to the state? how many pay excise tax to the state? How many pay income tax to the State & Federal Government on your profits?

   My guess, Zero.

  My guess, Zero. 

I'm sure you're wrong about that as I know Alloro obeys all laws...except for the occasional breaking of the speed limit ....    "but officer, I was only keeping the flow of traffic going."

I do track income v. outgo. I include gas, lunch on auction days, truck rentals if needed, and of course the bid amount plus buyer's premium if any. Year to date, I'm about even but I have a ton of inventory that still needs to sell off, some from my first locker purchase in Feb. even. I don't count the income until the product actually sells. I know of some guys that make the mistake of assuming the value of their items and counting it as profit, like what they do on the shows.

You would be wrong on how many pay taxes on this business

I know I do, as do several others locally.  Course we do our best to minimize those taxes as much as we can like any business owner, but I assure you, we pay them.

I have tracked my income / costs down the penny in a spreadsheet since day one.  I pay my taxes listed as hobby income on my tax forms.  There are both positives and negatives to tracking it. 

One negative is that once I reach the point of "break even" on a unit the drive to move this crap breaks down.  Another is I find myself considering taking less for something than its worth because I've already made my money back.  Mostly a mindset thing I guess.

A positive is I can see which units "actually" made money.  I remember one particular unit I bought, I was sure I'd make a killing on ebay with lots of small shippable items in good condition.  (books / dvd's mostly)  After a serious evaluation I discovered that USPS made a killing, ebay and paypal collected a fair sum, and I spent three months working to get my money back.   Its changed my perspective on what I bid on.  Ebay is great if I got something rare its going to be hard to find a buyer for.  I don't bid on things with intent to sell on ebay now.  I use ebay when its the best method to sell something I otherwise ended up with.

I kind of keep a vague running tally in my head. Overall I know what I paid for a unit and what I make off a unit in terms of the bigger dollar items, in terms of the small stuff and clothes and such not so much. Then you buy another locker, merhc starts getting mixed you start getting buyers buying from diff lockers and it all becomes a blur. I genrally try to keep a running tally in my head but just way to much work with the nickel and diming type items trying to track it all.

just way to much work with the nickel and diming type items trying to track it all

I can see your point there.  Depends mostly on your business model.  I buy units as a hobby, about one a month. There's not a lot to get mixed up since I don't buy again until I have space.  I learned that lesson the hard way on my very first unit.  Got a damn good unit and destroyed half the merchandise piling it on the back patio under tarps.  Once somethings hung around long enough that I forget what unit it came out of its usually on the way to the landfill anyway.  I do keep one page on my spreadsheet for stuff I can't remember what unit I got it from though.