Only 5 MILLION dollars. Talk about taking advantage of a $0.50 listing day!
I dunno... In the ad they mention they sell a million dollars a year. Doesn't sound right to me- with 4000 auctions a week, you'd think that number should be higher.
But it's 5 million dollars, and they won't accept Paypal. I guess that leaves me out!
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We do not stop playing because we grow old. We grow old because we stop playing -- Anonymous
posted on March 23, 2004 02:03:08 PM new
Getting out while the getting is good. When the biggies sell, you should listen. Just don't let your friends hear you listening.
posted on March 23, 2004 02:16:51 PM new
HMMM..Brand name on eBay?? Are they full of themselves or what??? The almighty dollar is the King on eBay - not "brand names"! They are selling their user name, feedback and about 100,000 in unsold inventory...for $5mil????
posted on March 23, 2004 02:31:03 PM new
if i have 5 millions dollars,why should i sweat over ebay ??
1 million dollar sales per year,how much is the net??
5 million dollars is 5 times sales,sales mean nothing if you start at one penny /
it should be x times cashflow,not sales.
anyway,may be their source is drying up??
also,wby bother to mention landlord,with 100,000 cd inventory,you can move to iowa or wherever you reside.
plus in iowa,you can watch the corn grow while you list on ebay/
-sig file -------we eat to live,not live to eat.
Benjamin Franklin
posted on March 23, 2004 02:38:08 PM new
Agreed- There isn't much there to physically own.
The "brand name" just doesn't mean anything on eBay. I have several eBay IDs, and for EVERY one of them when they were new and zero feedback, I listed a bunch of CDs for a penny. It's a quick way to make guaranteed sales. Not necessarily a big profit, and occasionally even a loss, but you'll acquire feedback quickly.
I would think the most difficult part of their job is knowing where to buy CDs cheap enough to sell using their gimmick. They aren't just combing the thrift stores and garage sales for those CDs. Coming up with 500-600 CDs EVERY DAY would take an incredible effort. And that's just acquiring the inventory, not counting the time involved listing them.
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We do not stop playing because we grow old. We grow old because we stop playing -- Anonymous
posted on March 23, 2004 02:38:45 PM newIn the ad they mention they sell a million dollars a year.
About $1.2 million a year, according to several sources. About 208,000 auctions a year. That would make their average auction sale $5.77, which sounds right to me.
They net virtually nothing on shipping.
They've already tried (unsuccessfully) to leverage "jayandmarie" by starting a fulfillment business, in the apparent hope that that might subsidize some of their overhead.
Remember, Jay Senese has been widely quoted as saying that he has never met an eBay millionaire and doesn't think they exist.
As far as $5 million for the brand name, someone should tell Jay he's eight days early for April Fools.
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
[ edited by fluffythewondercat on Mar 23, 2004 02:39 PM ]
posted on March 23, 2004 02:42:16 PM newComing up with 500-600 CDs EVERY DAY would take an incredible effort.
That is, or was, Jay's job, reportedly paying from $2 to $4 per CD. Remember I just commented that the average eBay sale would be about $5.77.
No one knows how much the Seneses net from the business, though they live in a pretty expensive area of Southern California.
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 04:10:04 PM new
Agreed with Fluffy....5 million does seem a tad high for what they're selling. And as Parklane says, it says something when the highest feedback seller is getting out. I don't know the business, but it appears to me like it's net profit is in the neighborhood of 200-300k per year. If this was a normal brick and mortar business with a more predictable future, then paying 20 times earnings would be almost right. But in the uncertainty surrounding this business, 1 times earning seems about right. So that's 200-300K. Throw in 150k for the inventory. Normally a brand name is worthless on Ebay, but in this case I think that you have to give it some value. Say 100k. So about 500K seems about the right price. But who knows, stranger things have happened, on Ebay and in California. Maybe it will sell for 5 mil. And there are Ebay millionares. I do personally know 2 people that have made 1 mil net off Ebay per year in the last 2 years. I'm sure that there are others. You'd think that for 5 mil they'd make it a featured listing.
posted on March 23, 2004 04:45:33 PM new
I went back and re-read their listing.
If the Seneses truly believe they have huge potential in "jayandmarie", why not get outside financing to fund the expansion they say the business needs?
Could it be they've tried already, and no one wants to front the money with so few assets to pledge as collateral?
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 05:01:31 PM new
no venture capitalists would fund any business selling cd at one penny?
how much is final value fee?what if some joker comes along and bid on the item,then they have to wait 7 days to file bidder alert notice and then another what 7 days to file for refund??
-sig file -------we eat to live,not live to eat.
Benjamin Franklin
posted on March 23, 2004 05:12:21 PM newOnly 5 MILLION dollars. Talk about taking advantage of a $0.50 listing day!
Ok that was funny LOL!!!
Seriously, sure, I've read a lot about them, and the 1 + million a year, but then, they have employee(s) and they do rent an office, or bought one, from what I've read.
They must really be burnt out on the ebay biz. I cannot see anyone with that kind of capital wanting a business like this.
But between the 2 of them and a couple employees, they do very, very well, I think they just need a long vacation.
__________________________________
"Somewhere, something incredible is waiting to be known."- Carl Sagan
posted on March 23, 2004 06:16:55 PM new
..maybe the industry numbers that point to a loss of 30 percent over last two years are a reality check for this end of the business..
myoldtoy
[ edited by myoldtoy on Mar 23, 2004 06:19 PM ]
posted on March 23, 2004 06:22:41 PM newI do personally know 2 people that have made 1 mil net off Ebay per year in the last 2 years.
BS. What are their usernames ?
No "mom and pop" seller has netted a million on eBay. It hasn't happened yet and never will happen. Once you get close to even $50,000 a year you'll have two hundred competitiors start up and drain your profits away.
eBay has the only brandname recognizable on eBay and the only brand name worth anything.
But think about it, why would anyone purchase an existing ebay business ? It is too easy and inexpensive to start an eBay business.
Why buy their CD selling business ? If you think you can successfully sell CDs on eBay, go buy some and start selling them. You don't need their username to do it.
The only way to have a sustaining and viable revenue stream on eBay is to have a unique and exclusive product to sell. There are few mom and pop sellers on eBay that have items that are unique and exclusive.
posted on March 23, 2004 06:24:55 PM new
I also wouldn't purchase any small businnes without first having a CPA go over the books and also make the sellers certify the figures as part of the sales contract.
posted on March 23, 2004 06:33:18 PM new
I think that they are just worn out and now is a good time to bail. There is a big drop in the cd market like everything else so that can not be a good thing for them.
They must see the handwriting on the wall.
Will they get 5 million? Who knows but I would not hold my breath waiting.
posted on March 23, 2004 06:54:44 PM new
fluffy..i think i pickd up all numbers correctly...
their feedback shows +525000, using your average at 5.77, the gross is apprx. $605000 annually - on this portion of the business...shortfall somewhere? maybe they have a second exceptional market...
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..i dont see how 2.50s/h can convert to a profit either...i once counted, again approx., 2000 auctions closing in an hour..this gives new meaning to "labor intensive" tasks...
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..the task is not incredible, it just takes a big truck[to haul the mdse]...as well as the capital to purchase in l000pc lots..
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posted on March 23, 2004 07:02:17 PM new
To be honest, their numbers are easily verifiable- it's almost all publicly available on eBay.
Let me do a quickie analysis and let's see how many holes you guys can blow through this
Assumptions:
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1) No one combines orders for shipping. We have no way of knowing the true numbers here, so let's ignore it.
2) Let's also assume the number $5.77 supplied by Fluffy is correct for their average sale price. It's obvious looking at their listings that their sell-through is very nearly 100%. Let's leave any shipping overcharge out of it and go by the costs alone.
3) Let's also say they pay $3.00 per CD as their average cost. This seems low to me, but let's say their buyer is very good.
4) Online and Postage. These we can figure pretty much exactly.
Listing Fee:
A simple $0.30 each since they all start under $0.99
At Closing:
$5.77 * 5% eBay FVF= $0.29 for each CD sold goes to eBay
$0.30 + $5.77 * 3% PAYPAL = $0.47 for each CD sold goes to Paypal
$3.00 for the physical CD itself
Total final costs $0.30 + $0.29 + $0.47 + $3.00= $4.06 !
So your basic cost is $4.06 per sale. In reality, this would be a little lower, since not all buyers are going to use Paypal. But from my own experience, I'd bet MOST of them do use Paypal.
they list about 4000 auctions a week x 52 weeks = 208000 auctions per year
208000 x $4.06 sales = $844,480
208000 x 5.77 income = $1,200,160
$1,200,160 - $844,480 = $355,680
Then there are REAL overhead costs... their building, 3 or 4 employees I read somewhere, etc. Let's say 3 helpers making $20,000 each a year, which is probably low for that part of the country. Let's give $50,000 a year for rent and utilities as well. Fixed costs = $60,000 for 3 employees + $50,000 building = $110,000 as a low estimate.
$355,680 - $110,000 = $245,830
Which doesn't sound too bad, but keep in mind, I think I was VERY conservative on the wages & rent estimates. That profit falls FAST if the wages or rent is higher than that.
Assuming ALL my numbers are correct it would take...
$5,000,000 / $245,830 = 20.34 YEARS to make your investment back. OUCH!
I doubt a VC person's numbers are going to be any more generous than mine.
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We do not stop playing because we grow old. We grow old because we stop playing -- Anonymous
posted on March 23, 2004 07:19:27 PM new
Hello All, Good for jayandmarie!! I hope they made a lot of money. Its nice to see a business that did well. My hats off to jayandmarie.
[ edited by bigpeepa on Mar 23, 2004 07:21 PM ]
posted on March 23, 2004 07:35:39 PM newShipping may be where they are making the lions share of their profits, assuming they pay $4 for their CDs
Aren't you forgetting that not-so-little thing called LABOR?
How many of you have ever purchased anything from jayandmarie? I have. And I paid with a money order, which might have cost them more to process than PayPal would have. (I am sure they qualify for PayPal's very lowest merchant rate.)
When you win something from jayandmarie, you have to respond to their EOA with your name and address. (I don't require that on my auctions.) Then that email is printed out and passed along to the fulfillment guys, who cut out the name/address part and tape it to a bubble mailer. A big stamp provides the return address.
jayandmarie's auctions used to say that they would ship immediately without payment for people with 10 feedback or greater. I don't think this was charity. I think that waiting for and coordinating payment with address information would have raised their costs considerably.
With 4000 auctions a week and late payers being endemic on eBay, they must have tens of thousands of CDs and DVDs to pick through to find the one you bought. I'm sure they're in numerical order, but still. It's not instantaneous.
When I tried to find a cost-effective method of fulfillment, I could not find any outside agency that would do it for less than $1.50 a piece. I don't know what jayandmarie's costs are, but I do know they have an office manager, which implies some number of worker bees. And functions that some of us do that take an hour or two every week would be full-time in the j/m operation. Like doing NPBs and FVFs...unless they don't even bother going after the fee refunds. I know I scarcely get enough back in fee refunds to justify the time spent processing them.
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 07:41:27 PM new1) Obviously they DO make some profit on shipping. Maybe as much as $2.00 per package.
No, I don't agree with that. Supplies don't magically appear on their doorstep. Someone has to take the time to order and (hopefully) hunt down suppliers with better prices. Picking. Packing. Slapping stamps on. (Yes, they use stamps! Or did.) Purchasing postage.
You guys are only looking at the most superficial aspects. If you don't count labor and hidden costs, you don't get the real picture.
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 07:48:24 PM new1) Does their auction service take any percentage cut?
Vrane does their EOAs, or did. I'm sure they buy Universal Credits by the boatload, but it's still not cheap. Vendio would probably not appreciate me talking about it here.
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 07:48:41 PM new
Replay....I agree with you.....From what I know and after your number crunching we've come up with the same number. I say 200-300k net per year. You say $245k.
BS. What are their usernames ?
No "mom and pop" seller has netted a million on eBay. It hasn't happened yet and never will happen. Once you get close to even $50,000 a year you'll have two hundred competitiors start up and drain your profits away.
It's not BS. And it's not mom and pop, It's grandma and grandpa. It's good marketing and a good choice of products within their category. They also have a nice supply channel. Why would I make it up. I'm jealous of them. I wish I had their supply.
You have no idea what you're talking about. I know many, many people who make over 50k per year net on Ebay.
posted on March 23, 2004 07:51:04 PM new
Postage=$0.85+$0.40 for an envelope = $1.29 shipping cost. They charge $2.95.
$2.95-$1.29=$1.66 pre-labor profit on shipping.
Certainly there is a cost involved beyond the stamps and envelopes, but I *DID* count labor seperately in my previous analysis.
I'm assuming one or two of those employees do nothing BUT shipping.
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We do not stop playing because we grow old. We grow old because we stop playing -- Anonymous
posted on March 23, 2004 08:40:20 PM new
This Canadian seller has a sales volume of several million dollars on ebay (I don't know his profit but I know he does well). If you click on the video on his Me page you can hear him talk about his business.
posted on March 23, 2004 09:26:32 PM new
4000 auctions divided by a 40 hour week.
That's 100 packages an hour.
Can you ship 800 packages a day?
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 09:36:26 PM new
Oh, there it is. The Chicago Tribune article talking about the details.
3 clerks who do nothing but sit at laptops and process orders.
Multiple shipping clerks. I'd guess at least three.
I think your labor estimates are low, even accounting for the fact they're using teenagers.
"With fees, rent, salaries and other expenses, Jay Senese figures a CD needs to fetch $5 to $6 at auction to make a profit."
--
"The word 'aerobics' came about when the gym instructors got together and said: `If we're going to charge $10 an hour, we can't call it Jumping Up and Down.'" -- Rita Rudner
posted on March 23, 2004 09:47:02 PM new
JayandMarie has always seemed to me a "LOL" business model(Labor of Love).
Herding ants, really.
"I won't be wronged, I won't be insulted, and I won't be laid a hand on. I don't do these things to other people and I require the same from them."- John Wayne/The Shootist"(from the novel by Glendon Swarthout)
posted on March 23, 2004 09:53:56 PM new
BTW, I just ran the numbers for the Canadian seller mentioned above for the last 30 days.
1634 auctions
21% sell-through
$7,400 in sales
2 million, eh?
Nice video, though.
"I won't be wronged, I won't be insulted, and I won't be laid a hand on. I don't do these things to other people and I require the same from them."- John Wayne/The Shootist"(from the novel by Glendon Swarthout)
