Cost of Ruby Lane Shop compared to Sales

Hi -

I was just getting my records together for tax purposes and I found this number - Cost of Ruby Lane Shop compared to Sales - on my yearly Ruby Lane report.

Now I am curious - What range should this number be in to show a Ruby Lane shop is fairly successful?

Thanks!

Marie

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Replies to This Discussion

Permalink Reply by Charmed Life on February 22, 2012 at 4:53pm

I think that's up to the shop owner, and what they find to be an acceptable profit margin for their business.

Everyone has a point that is their "comfort level".

Permalink Reply by Catisfaction on February 22, 2012 at 7:11pm

What Charmed said.

Also, it depends if you factor it in against just RL sales or against all your sales over multiple sites.

For me personally, back in the days when it was 12-17% I was happy. The day I noticed it had jumped to 30% was a wake up call.

Permalink Reply by Antiques by Charla on February 23, 2012 at 10:34am

"Way back" in the glory days of selling, the general concensus was that $ amount of sales should be 10 times expenses. That was when selling was fun and lucrative.

Permalink Reply by Marni Bakst on February 24, 2012 at 2:29pm

Certainly you're not including the cost of the item in that... are you? You can't find everything for 50 cents at a yard sale... lol.

Marni

Antiques by Charla said:

"Way back" in the glory days of selling, the general concensus was that $ amount of sales should be 10 times expenses. That was when selling was fun and lucrative.

Permalink Reply by The Old Grey Mare on February 24, 2012 at 3:32pm

Marie, I agree, it depends on what the shop owner finds acceptable. Like me, you do shows, so you know that expenses there can be hefty, booth rent, travel, hotel, meals, etcetera. I'm not good enough at math, and too lazy to try to figure out exactly what percentage my sales are at shows, compared to costs, but we both know when we've had a good show. Or a bad show. It's nice that RL has that cost vs. sales percentage in there, I check it pretty regularly. I had a friend open a shop some years ago, and she asked RL that question after she had been open for a few months. I want to say they told her that anything about 10% was very good. Which I think is VERY good, I know that at shows and in my bricks and mortar shop, it's nothing like that, much higher cost per profit ratio. For me, Ruby Lane is an extremely cost effective way to do business, I can't hope to equal it at shows or in bricks and mortar, I'm usually well under 10% on RL. As I said, I do keep an eye on it, because when it's low, I can afford to do the co-op advertising in Maine Antique Digest or pay for featuring.

And I also agree with Marni, that can't be including the cost of the item, I can't imagine expecting to make 10 times my money on everything I buy. Ed Welch wrote an article a few years back about how to gauge your profits. Doubling your money is a tidy little profit, but to be running a full time business that can support you, it's more like three or four times your money, if not more, consistently, across the board on everything you buy and sell.

I also agree with Catisfaction, it's the bottom line, what your total is at the end of the year, it's your profit over multiple venues--the shows, the bricks and mortar and RL. When one is down, one or the others may be up, balancing it all out. So it truly is a personal decision about your overall business. If it makes you happy, it's working.

Permalink Reply by Antiques by Charla on February 24, 2012 at 3:45pm

The 10x rule was used primarily to gauge if a venue was considered profitable, whether an antiques show, flea market, online mall, brick & mortar, etc. If I did a show that cost $1,000 in show fees, I should have 10x that in total sales. Of course, during that boom time, it was not unusual to do well over that. Just talking about total sales, not per item. You can make a larger profit on one item and less on another, but the total picture is what is important.

Permalink Reply by Cleo and Clara's @ Ruby Lane on March 29, 2012 at 8:44pm

As I understand it, a business should be heading toward 33% costs related to doing business (write offs, counting the cost of items), & 33% paid to taxes (businesses that are required to pay every last cent as in brick & mortar locations), and then the last 33% should be profits). Once at those %s (pretty much) then you can, of course work towards more of a profit %. It takes the average business 7 years to grow to this 33%/33%/33% breakdown. If you are not heading in that direction, you might be doing something wrong. Seven years is a bit long in the case of Ruby Lane (I think). However, if you are not pretty close to those numbers by 3 years into your shop...better do something different in you shop. Make some changes. I read this info in a business book somewhere. It is a very "cautious" estimate of the situation. Of course........make all the profits you can with total honesty and wonderful customer service. That's pretty much all I know.

Permalink Reply by Granny Wickers on March 30, 2012 at 9:47pm

Um.. if it it not fun and lucrative now, how would you describe it? I am just starting out at Ruby Lane. Thanks!

M

Antiques by Charla said:

"Way back" in the glory days of selling, the general concensus was that $ amount of sales should be 10 times expenses. That was when selling was fun and lucrative.

Permalink Reply by Antiques by Charla on March 30, 2012 at 10:53pm

A struggle. lol

I was referring to late 1980s, when I did not have an online presence and sold primarily antique furniture at antiques venues. Not uncommmon then to do mid 5 figure amounts at a 2-day weekend show, with people standing in a line waiting to hand you money. I don't do shows anymore, so perhaps it's as lucrative for some folks now.

Granny Wickers said:

Um.. if it it not fun and lucrative now, how would you describe it? I am just starting out at Ruby Lane. Thanks!

M

Antiques by Charla said:

"Way back" in the glory days of selling, the general concensus was that $ amount of sales should be 10 times expenses. That was when selling was fun and lucrative.

Permalink Reply by Granny Wickers on March 30, 2012 at 11:11pm

I find the shows really slow. I stopped doing them because I was not even making back the cost on the booth at shows- and I was not the only one...

I will go back, but right now want to try to build up the online business. Thanks for your response :o)

Antiques by Charla said:

A struggle. lol

I was referring to late 1980s, when I did not have an online presence and sold primarily antique furniture at antiques venues. Not uncommmon then to do mid 5 figure amounts at a 2-day weekend show, with people standing in a line waiting to hand you money. I don't do shows anymore, so perhaps it's as lucrative for some folks now.

Granny Wickers said:

Um.. if it it not fun and lucrative now, how would you describe it? I am just starting out at Ruby Lane. Thanks!

M

Antiques by Charla said:

"Way back" in the glory days of selling, the general concensus was that $ amount of sales should be 10 times expenses. That was when selling was fun and lucrative.

Permalink Reply by Antiques by Charla on March 30, 2012 at 11:20pm

Just wanted to add... that was the reason I stopped doing antiques shows... when the bubble burst ....and I have no desire to do them again. Just too much work and not enough rewards. I do like online selling and Ruby Lane is a great place to sell. It takes a little work, like listing items, to get your items noticed. :o) Hopefully, things will turn around soon and we will have more sales than we can handle. I'm hoping!

Permalink Reply by Ruby Lane on April 2, 2012 at 4:30pm