Our Strategy for Pricing Items to Resell for Profit

Amber:

Welcome to the fourth episode of the Gem Finders Podcast. I'm Amber.

Shaun:

And I am Shaun

Amber:

In this episode, we are going to cover how we price our items. I am a little bit nervous to put this out there because it's something a lot of people don't talk about. I do think it's an important discussion to have, and I think it's interesting from both a buyer and a seller perspective. I'm a little bit nervous about what the feedback will be, but we'll see.

Shaun:

I definitely think we're gonna be a little bit controversial today with this episode, but it is what it is. Amber thinks that it is important information to put out there.

Amber:

Um, you don't?

Shaun:

I don't know that this would have been my first choice for an episode, but we'll see how it goes.

Amber:

Alright, well, that doesn't make me feel good. 

Shaun:

I know people are very opinionated, and I'm sure we will get some negative feedback from this, which I don't think either of us particularly like. But sometimes you just have to roll with the punches.

Amber:

Alright, so there is really a lot that goes into how we price an item. That can range from the price that we paid for it, how much similar items have gone for in the past, how hard it will be to ship, and how much time it will take to ship. How much packing supplies will be needed, also how old it is and the condition of the items. So, there are so many different factors that go into the final price. It is not just what we paid for it. It really is a variety of different things that are important to consider.

Shaun:

And we try to offer a very different experience than a typical eBay store. I think we go above and beyond with what we do, from the quality of the photographs to the cleanliness of the items, to our packing and shipping methods. I think that from a typical eBay seller, you're not going to find the type of quality that we try to offer or that same kind of experience.

Amber:

Just from antiquing, I think that many vintage resellers really offer an experience above and beyond what the experience is like in an antique store. So not only are you finding antiques like you would at an antique store, but you don't have to do the hard part of the finding. And then you don't have to clean them and things like that.

Shaun:

I really view our business as a step beyond going antiquing. We are finding the items for you, we are styling them, we are curating them, we are cleaning them. We're offering a very curated collection. You know what you're going to have available when you're shopping from Gem Finds Vintage.

Amber:

So I think that is something to take into consideration when you are shopping from vintage resellers, is that there is a lot of extra work that goes into it beyond just shopping at an antique store. And that requires extra time, and that's why I do think that resellers should charge more than what you might find items for at antique stores. Because it is that kind of next-level experience to be able to shop these items from the comfort of your own home.

Shaun:

Yeah, so there are a lot of steps to our process from when we find an item to the time that it reaches a customer. So it is not just us finding an item, taking quick pictures, throwing it online, and sending it off. There are so many steps in between that I don't think most people even realize we're doing. 

Amber:

And I don't think most people realize how expensive it is to run a business like this. People don't realize how much bubble wrap costs. People don't realize how many miles we drive. People don't realize how many different expenses go into this from every angle, not to mention having enough money to pay us after because this is our full-time job. This is what we do.

So, I know a lot of resellers do this more as a hobby, where they find the things and they're excited to find them, and then they just kind of charge enough to get their money back. And I don't think that there is anything wrong with that. But there comes a point where it is beyond just a hobby, and it is a business, and we have to treat it that way.

So, we are never going to be known for the place to get the best value or the best deals or the best prices. But, I do hope that we are known for having a unique assortment, having an assortment of really high-quality items. I want to be known for getting the items clean to the customers. I want to be known for the items getting to the customer safely. And that is what Gem Finds Vintage is all about: that experience.

Shaun:

And don't get me wrong, I personally have a little bit of guilt about us not being a place to come to get the best deals. We have had differing opinions about this for a long time, and I think that I waver sometimes. I lean more one direction than the other, but I do sometimes feel guilty because when we started, we did offer our items for much lower prices. But, as we grew and we evolved, we started spending a lot more money on our inventory per item, so we couldn't justify selling them at the prices that we were a long time ago. And we have lost some customers because of that.

But we have also gained so many more, and we have built such an incredible community around the experience that we offer.

Amber:

We didn't always charge the way that we do now, and we will get into kind of my theory behind that and exactly how we price an item, but we didn't start that way. I really started being very comparable to everything that was on eBay and other comp listings, which we'll talk about in a little bit too. And then I kept stepping up from there.

And, if you're in the position where you're starting a vintage reselling business, I don't think that you need to kind of start at the level that we are at right now either. I think that you can start with much lower prices, and that's especially great in the beginning. I mean, we literally started with five-dollar auctions.

I would post an item on my Instagram page for $5, and most days it would go for five if anybody even bid, or it would go for like seven.

Shaun:

That wasn’t even—we, that was before I was even involved. That was just you.

Amber:

So we really did start from a much different place. But I also know that if we were still charging the way that we used to, there's no way that this business would support both of us.

Shaun:

We also weren’t offering nearly the type of quality items that we offer now because we were—I mean, not we, I should—I mean, I went with you a lot of the time, but you were thrifting most of these items. So, they were lower quality items, they were cheaper items. So, it was a—it was a very different experience. The business looked very different all around.

Amber:

I also think that along the way, I figured out how passionate I am about the type of items that we offer now. I love Fenton. I love learning about Fenton and finding different Fenton pieces. And, so I think part of that change also came from what I was drawn towards and really having a passion where I wanted to offer that to you.

Shaun:

She’s very picky and particular about what she wants to offer.

Amber:

There’s some different things that kind of went into that evolvement, but I really think that having a style and being a place where people come to for certain items has really helped the business grow.

Shaun:

I don’t disagree. Again, I think that sometimes I feel like we should offer some lower-priced items, maybe some more lower-end items.

Amber:

I've been trying.

Shaun:

But I—I also can't argue with the success that we've had because of the direction that you have decided to take the business in. So it's—it's hard.

I feel guilty looking at it from a customer’s perspective. And sometimes I see the price that she is asking for something, I'm like, "Whoa." But then there are other times where I’m like, "You could probably get more for that." So again, there's a balance there. And whatever—whatever she's doing, it works. I can't argue with that.

Amber:

Let’s just get into it—pricing the item. My thought process for pricing an item really begins when we're antiquing, when we're thrifting, when we're at flea markets. It starts in those moments because, in my head, I kind of have this general rule of attempting to make a 75% profit margin.

Shaun:

(Gasps) What?

Amber:

I know. It’s crazy. It is crazy.

Shaun:

Blasphemy.

Amber:

What am I thinking? But I'm kind of aiming for a 75% profit margin as a loose rule. I was gonna say something—I have no idea what to say.

Shaun:

Sorry, I was just

Amber:

—no, I think that’ll make for good content.

Shaun:

I was vocalizing what the people listening were—what their reaction was.

Amber:

Better for you to say it before them. But I know that that sounds crazy. I know that that sounds like a lot. But I'm going to explain why. And again, you have to take into consideration all of the expenses that go into this because it is an expensive business to run.

And it is extremely hands-on. We have to do every single step. There is nothing passive about this business. So, when I’m sourcing, I am thinking, "Can I charge four times the amount that I'm paying for this item?" And, I didn’t always think that way, but it’s definitely helped narrow down my choices now that I do it, and I’m really grateful that I kind of have this starting point.

And that's not a hard rule. So if I pay $2 for something, I’m not charging $8 for it, because just the box and the packing material and the time to pack it would be way more than $8.

So, if I find something for $2, the lowest I'm gonna charge for it is probably like $25 to $30 because I have to make it worth our time. And, on the other end of that, it’s also not a rule that I absolutely implement for items that are more expensive. So if I pay $100 for something and I'm pretty confident that I can get $200 for it, I am content with that. I don’t need to make $400 on an item that is $100. However, if I’m going to do that, I need to be pretty confident that I can sell it, because $100 is a huge investment in terms of our inventory.

So, I don't do that often, but I do sometimes, and sometimes it works out, and sometimes it doesn’t.

Shaun:

We spend over $100 fairly often anymore.

Amber:

I’m talking about an item.

Shaun:

We spend over $100 on items a lot more than I think you realize.

Amber:

But, in the grand scheme of how many items we have, it’s not that often.

Shaun:

And, I also want to say that my reaction is not to mock anybody. I think that if that was your reaction, it's very justified because, to be totally honest, when she first told me that was like the general rule of thumb that she was going by, I was taken aback by it. And, I'm still kind of adjusting to that. I will find something at a store and I'll be like, "Oh, this is good," and I'll say the price, and she'll be like, "Yeah, I don’t think I can make four times that."

It seems like a lot when I'm doing it at the time, but when you do break it all down and you factor in the time that we spend—again, from the photographs to listing it on the website, to the video content, to packing it and shipping it off, and the cost of the supplies—it’s hard to argue with trying to make at least that much for an item.

Amber:

And, also, to be transparent, this business has really stabilized us financially, but that is about it. So, we are finally financially stable in terms of we can pay all of our bills. We're not wondering where that next mortgage check is coming from. We got that.

But we are still very mindful about what we spend on groceries. We don't really have a lot of extra money for extra things, and we have a lot of home projects we want to get to, and they're not really in the budget yet.

We are potentially considering IUI and IVF for fertility, and that is very stressful because of the cost. So, even though we are stable, we're not rolling in cash over here. The only reason this business is worth it is because of how passionate we are about it and the potential we see to continue to grow.

Shaun:

Where we're at right now is enough to get by and survive and pay the bills. But, we work all the time, and that's kind of why we're doing this right now—is to try to expand and grow and find some other sources of revenue that are still related to the business but just kind of branches of it.

Amber:

Because even that four times what I pay for it—that 75% profit margin—when you take that all into consideration, it’s almost not enough. And, we’re also at a point where I don’t want to be charging any more than we currently are. I feel like I am comfortable here. I feel like this is a good place to be, and I don’t think - I think that if you charged any more for our items, I wouldn’t feel right. And, I don’t think I could ethically do that. So, I feel like we’re kind of at, like, the highest level that I’m comfortable with, and so that growth has to come from somewhere else. So, I'm so grateful that we've gotten here. I’m so, so, so grateful that the business has gotten us here. But, it is tricky when you don’t have a lot of extra time to make extra income, and we are in a position where we are packing orders all the time. We can’t really increase sales because we don’t have the time to pack any more items or to list any more items.

So, it’s a very different set of problems than we were used to having before. And it’s exciting because I’m excited to figure this out, but just keep that in mind when you see the price of our items, because when it’s all said and done, we’re really not profiting that much. We’re profiting just enough.

Shaun:

And the bottom line is, we are not forcing anybody to buy anything from us.

Amber:

No.

Shaun:

She is a terrible salesperson. One of the worst I've ever seen in my entire life. She’s terrible at selling things. She will not push anybody at all. She wants everybody to be very comfortable and make the decision on their own. And if they do, they do. And if they don’t, they don’t.

I’m a little bit more pushy, but I also don’t have a lot of room to be pushy because she won’t let me. So, we're not forcing anybody to buy these items, and we encourage anybody and everybody to do research. And if they can find a better deal—By all means, please do it. We are happy for you.

Amber:

I’ll be the first to celebrate if you’re like, "Well, right now it’s cheaper on eBay." Fantastic. Go grab it. What are you talking to me for? I love that for you. Is it going to arrive clean and safe? I don’t know. That’s a risk that you’re taking.

But, you’re never going to offend me if you say, "I found it cheaper on eBay." Just don’t do that after you already committed to it. If you commit to the item, please buy it.

But, it’s also not going to make me come down on my price. We do have different sales and different opportunities to save money, and I really don’t do that in individual interactions because it just gets too complicated and too confusing. And I don’t—I don’t want people to, you know, message me and be like, "Hey, can I get a better deal on this?" when I kind of know I’ve already priced the item at where I need to price it for it to make sense for our business.

Shaun:

Like you said, we do pretty frequently do sales. We do discounts during our live sales. We'll do flash sales, we do around the holidays. We do holiday hangouts where we give away lots of free Gem Cash, which is basically just money to put towards your order. And like gift certificates, things like that. So, we are always offering opportunities to get the items at a lower price than we originally list them at.

But, we also like to try to create a little bit of a sense of urgency to get those items when we originally list them because you never know how long it's going to be available.

Amber:

Yeah, and for the most part, we have a pretty good turnover. We do have items that sit, but I try to make sure that they're out of here within a few months so it's not like we're not in a position where things are sitting for a significant amount of time.

Shaun:

You will not let items sit for a significant amount of time.

Amber:

I hate it. If we have a Christmas item left over in January, I'm like, somebody get this out of here!

Shaun:

She will give it away. She'll literally like, we won't make any money there. There are definitely quite a few things that have sold, and we probably lost money on them because she is very impatient. If something is on the shelves for two months—that's it!

Amber:

I like to keep our inventory flowing, and that allows us to bring in a lot of new items too. We don't have the budget or the space to have too much of our business tied up in inventory.

So, I think that after doing this for almost four years—

Shaun:

I don't know how long you've been—

Amber:

Well, because I started shortly after we moved in. So you know, I've been doing this for almost 4 years, and there really is a strategy behind everything.

So, speaking of seeing things on eBay for less than what we're charging, I think it's really important that when you're looking at things that are listed on eBay or other marketplace platforms, that is not what they are selling for. That is a random price that somebody put. Maybe they thought about it, maybe they had their reasoning, and maybe they don't. Maybe they just saw another listing and decided to charge that much. But, just because that's what it's listed for doesn't mean that that's what anybody is going to make for it. So, it's always important to kind of view those listings with a grain of salt.

And, that goes for like when you're shopping at antique stores too. A lot of times, we'll have people say to us when we're considering an item, they'll be like, "Oh, it's listed for $200 on eBay right now." And in my head, I'm like, there's no way that I am getting $200 for that. So, just keep that in mind when you're looking at other eBay listings.

Something that people talk about all the time when pricing items is, "Look at the comps, look at the comps." And, a comp is basically what the item has sold for recently. And, you can do this on many of the reselling platforms. A lot of them still have the sold listings posted, and I think that is helpful. But, I don't think it's like the end-all, be-all in how much an item is valued at or what the price should be. Because you don't know if it was a vintage reseller who posted and sold the item for that. You don't know if it was somebody who was just trying to clear out their collection for the lowest price that they could. Maybe they're moving. You don't know if it was somebody trying to get rid of their grandmother's things and they had no idea what they had.

So don't let what is currently listed or currently sold on these platforms be the only thing that shapes your view on the value of an item.

Shaun:

And another thing—do your research. Become knowledgeable about what you're looking for. Because along the lines of when you're at an antique store and they'll say, "Oh, this is listed for whatever on eBay," sometimes they'll try to get you to buy something and they'll be like, "This is blah blah blah," and they're completely wrong.

So, do your own research, become knowledgeable, get books—we have lots of books here. They are probably the best resource for a lot of vintage and antique items. Because a lot of that information, surprisingly, is not available online. I thought that literally everything was online at this point, but a lot of this information isn't. So, if you can find books about whatever you're trying to sell, I would say they're invaluable. You can use those as a resource, and it will be better than anything else that you come across.

Amer:

I agree, but something to be careful with is that a lot of the vintage and antique books, like reference books, they will have suggested pricing in them. And, you really can't pay attention to that because a lot of them are very outdated. So, I think at this point, a lot of items are worth more, and then a lot of items are definitely not worth quite as much as they said at that time. So, don't really look at the prices specifically in those books.

However, the price that they have in there can be a good indicator of how hard the item is to find. And, they will also have details sometimes about how difficult it is to find certain items in a certain pattern or in a certain color. And so those details can definitely be helpful, and it's a great resource for identifying things. Because then you can take it to Google and search what the specific thing was and then find the recently sold items that are actually listed correctly.

Shaun:

I didn't mean to look at the books as a pricing resource—just to get knowledge. If you're in that situation, you know what it is and if you think it's justified at whatever the price they're asking is. 

Amber:

Because you really need to be so careful about what you pay for items. I've had so many things that I loved that I just didn't really bat an eye at the price, and then I get home and I do more research and I realize that it's a pretty common item and there are a bunch listed for $20 and I'm like, well, I just paid $20 for that. So, you do kind of have to make sure that you're always learning and always researching.

And you know, can I charge a little bit more than $20 for an item like that? Probably, but I'm not gonna be able to make that 75% profit margin.

Shaun:

Also, in so many of the antique stores that we go to, we have no service. So, we are not able to research items in real time. A lot of the time, she just has a gut feeling about something, and we'll get it and sometimes it works out, and sometimes it doesn't.

So, that's another reason to kind of have some knowledge going into those situations because you can't rely on your phone being able to get you through. You might be going in there blind, and you have to make a decision on the spot. And, if you don't have any prior knowledge, you could kind of get burnt.

Amber:

And if your phone is working, just because listings pull up does not mean that they're accurately listed. Or, that you should pay attention to those prices because sometimes the way that Google Lens works is like, sometimes if the website has refreshed but Google hasn't, it'll be the name and price of one thing, but when you click on that link, it's not updated. And, anybody can list anything on eBay, so a lot of times people are inaccurately listing things.

So, an item might say that this is, you know, some rare Fenton piece, and then you go home and it's not even Fenton. So, even if you have access to your phone, be really careful and don't rely on that.

A really important lesson here is everything is just a tool. You need to have a very well-rounded view when you're pricing your items because you need to think about so many things at once.

So, just to kind of end and with a little bit more about what my process is, we kind of talked about how I already have that 75% profit margin filter on at the store. So, I would say that in general, you know, most of our items we pay between 10 and 40 dollars for. I would say the bulk of our inventory, ish.

Shaun:

I feel like that's probably on the lower end at this point, to be totally honest.

Amber:

So, those are kind of the items that I'm trying to price at four times that amount. And then kind of as the items get more and more expensive, that margin goes down a little bit. And then if the item is cheaper, then that margin needs to go up a little bit. And so I kind of already have that idea in my head.

And then after Shaun inventories the item, after he cleans it and does all that, then when I'm doing that final step of listing the item, I will pull it up again. I'll try to use, you know, Google Lens, I'll look at recent listings, I will look at comps. I'm not saying don't use them, I'm just saying don't heavily rely on them. Because at the end of the day, you need to charge what you need to charge to make this worth it for you. And I'll look at our website to see what things have sold for in the past, where the items are similar. Maybe it's the same collection or the same pattern, but we found it in a different color. And then I also think about, like, how much inventory do I have right now? How quickly do I want this item to move?

So, it's another example of you really have to make it work for you. And sometimes I really love an item and I don't want it to sell, so I charge a little bit more for it because it's my "let it go" price. I'm like, well, I would really like to keep it, but if somebody wants to pay a higher amount for it, then I will let them have it.

Shaun:

That's the other thing I kind of wanted to touch on. There are times we'll be in a store and she will see something and she'll be like, "I don't care what the price is, I need to have this." So, there are times where that profit margin isn't even in her mind. It's just, "This is an item I've never seen before, it's gorgeous, it fits my style, I need to have it."

That kind of falls along the lines of an item that maybe she doesn't want to sell. And we also have more recently started, if we see a higher-end item that we think is very rare or fits the style of the shop, we will buy it even if it's very expensive. With the idea that this will be good for content online. Sometimes when she is posting videos on the social channels, it's good to have one of those really flashy items in the screenshot that you see when you're scrolling through. You know, there are different factors that come into play in different scenarios and situations. Nothing is really set in stone. There's always room for movement and wiggle room depending on the item, depending on the situation.

Amber:

And, if you're going to pay up for an item, I would make sure that, one, it's something that you absolutely love. If it's an expensive item, you wanna make sure that when you're talking about it, you can be so enthusiastic and so passionate and that you can really share that excitement with other people. And like Shaun said, I love to use those really eye-catching items for content, not only for the pictures that you see when you're scrolling through, but they're a great way to start a video. They're a great way to start a reel with something that is beautiful, something that people have never seen before, and that helps keep them watching. So again, there's a strategy behind everything.

And, it's okay if you compromise sometimes on what you need to make, but make sure that there is a reason behind it. Make sure that you're doing it for a purpose, and that maybe it's not profit-wise, but in another way, it's going to help grow and support your business.

Shaun:

Yeah, those items like that, they don't need to go for the 75% profit margin because they are already doing us a service in other ways. So, it's fine if they don't sell for as much, if we don't make as much when the item actually sells. It's fine because we used that item to bring more eyes to the shop or to get more subscribers to channels to help try to grow the business in other ways.

Amber:

So I hope that you found this episode helpful. I hope that maybe you have a different perspective after watching or listening to this on how to price your items and how you can price them in a way that's going to work for you because it is challenging. Especially when you're walking around a thrift store or an antique store and the prices are high. It's challenging to decide what to pick, it's challenging to decide what you think is going to sell well and what you think is going to be worth it.

I hope that we helped give you some starting points to kind of mentally walk through those different processes.

Shaun:

Yeah, and let us know how much you hate us now, haha. I'm curious to know, especially from customers that have shopped from us frequently, if this is shocking or if you think that this is kind of close to what you expected.

Amber:

Because a few times a month at least, I do get comments on posts that are like, "Your pricing is crazy, like I love what you have but I'm never going to pay that much money." But, it's never from a customer in our community. Like, it is always from somebody who I have no idea who they are. And I don't think a lot of people understand how much goes into a business like this.

So, I hope that we helped debunk that a little bit because I promise that we work our butts off to be able to price our items as low as we possibly can for you. Like, we really do.

Shaun:

And I would be more than willing to share how much we spent on packing and shipping supplies alone last year. That number would probably blow a lot of you away.

Amber:

Yeah, it is crazy. Just keep those things in mind as you're shopping from your favorite resellers. Because I don't think that anybody gets in this business to make a significant amount of money. I think everyone is just trying to get by doing something they love.

Shaun:

That's the thing is you really have to love what you're doing because while it does give you a flexible schedule, it still takes up all of your life. So we're not rich we're surviving, we have flexible schedules, but we still have to work all of the hours and all of the day.

Amber:

But, it is worth it and we do enjoy it and I'm really glad that we get to do this as our career so, let's go find some vintage! And, let us know what questions you have.

Shaun: 

Like and subscribe.

Amber:

No, only if you want to.

Shaun:

Turn on the bell

Amber:

You don't have to

Shaun:

Turn on the bell for notifications. 

Amber:

Only if you like what we have to say

Shaun:

Then subscribe. We're gonna get a lot of thumbs down on this video.