Not much has happened since my last update really. I bought four new items to sell with two of them being William Morris Sheet Sets, and the other was a Ralph Lauren Queen Sheet Set. I bought the two William Morris items on October 17th and the Ralph Lauren set on November 2nd. I’m getting lots of views on the William Morris items, which is good. The Ralph Lauren Queen set sold today and I made $2.15. This was a mistake on my part, because I forgot I had listed the item where I paid for the shipping. When I make a profit though I’m always pleased though, and went ahead and bought a William Morris Duvet to replace it today.
I currently have 33 items in my inventory and am overinvested by $12.26 with my total amount possible since the start of $610.81.
Verizon Stock
The one share of Verizon I own paid a dividend of $.665 on 11/1/23. I had this reinvested back into Verizon. This bought me an additional .019 share of Verizon at a share price of $35.00. This is going to be harder for me to track compared to me buying physical inventory. As well, this increases my cost basis by the same .665 cents. I’ll be adding the dividends to my cost of the Verizon investment as I go in the table I show. However, I viesw this in a different manner when I think about my return. I view this investment at the original amount I paid for the one share and it is just throwing off free money to me over time. I’ll likely go between these concepts over time, but will show the total invested along with dividends for clarity. The 1.019 share of Verizon closed at $36.18 per share today. This would make the value of my shares worth $36.87. This is not where I believe the intrinsic value of it is, and I will continue to hold till it gets to the value I think it is worth.
I have sold one item since my last update. I sold the William Morris Queen Duvet today for $85 plus shipping. I ended up making $24.07 of profit off of this item. I paid $54.11 which gives me a 44% profit on the item. I sold it in just over half a month which is always a nice, fast flip.
William Morris Duvet
This puts me over $600 since I have started over a year ago. If I were to earn 9.75% approximately on the money I started with annually it would have taken me 30 years to get to $600 in value. These small flips create value very quickly to be able to build up. I need to reinvest $141.57 at this point and haven’t bought anything since this William Morris Duvet and share of Verizon stock.
My change jar flipping is a very low risk, high reward with the amount of items I have in my inventory combined with the probability of how many items I can sell a year. I hope to sell as many items in my inventory a year, as I hold at a time. With the profit margins I am trying to maintain this should get me close to doubling my total amount at least once a year, unless I find an item which is extremely profitable compared to the price I pay for it.
I had a lot of things go on since my last update earlier in the month. I sold four items, bought one item, threw away/donated back four old items, and bought one share of stock. I have turned my $36.86 into $579.45 at this point, and need to reinvest $63.39.
Sales
First off, I sold the following four items: One of the Accounting Books, one of the Queen Sheet Set Brown and White Plaid, the Marriage book/game, and the Teapot.
The Accounting book sold very quickly on September 17th for $21 and made $3.96 of profit in eleven days. I sold this book on Amazon which is where I bought it, and I could have sold it for maybe $25 if I wanted to wait longer. However, the quick flip is the best in my mind with the lower priced items so I can keep the money flipping over and over again.
The second item the Queen Sheet Set Brown and White Plaid sold for $117.49 on September 17th also. This is a big winner for me at $38.86 of profit after shipping it out. The one I have left is getting plenty of views which is the data I need to know it will sell also.
The third item I sold was the Marriage box/game. I had discounted it to move to help reduce the number of items in my inventory. I ended up losing $2.79 on this item after discounting it. After the lost I had $5.32 left of the original $8.11 I used to buy this item. I will talk more about this with the items I decided to throw away.
Marriage box
The fourth item sold was the Teapot on September 29th. The teapot was of Shakespeare’s home he was born in. It sold for $19.99 plus shipping and I ended up making $11.67 of profit off of it in six months. I tripled my money of this item. This is a great flip again. I just keep on having very good results when most items sell overall.
Purchase
I bought another William Morris duvet on Sept 29th to add to my inventory for $54.11. I should be able to make over $30 on this item. I stopped myself from buying another William Morris item which would have made me around $15. I want to try and maintain as high a profit amount as I can when I’m spending this amount on an item. I have to remember to focus on trying to make as much on items so I can grow in the best possible manner with the amount of funds I have available.
Stock buy
This is out of line with what I’ve done so far, but I felt like this a good opportunity to buy something that makes sense. I bought one share of Verizon stock at $32.40. When I buy stocks I evaluate them on the basis of the value proposition they are selling at versus what I believe they are instrinically worth, with the thought I do not know how long it would take for the market to realize they have undervalued the business overall.
The first metric I look at is price/book value. I calculate the book value of Verizon at $21.95 a share at this time. You can learn more about how to do this type of calculation by reading the Intelligent Investory by Benjamin Graham. This put the P/B value at 1.50 which is historically very low compared to where this business has been and other similar companies it competes against. The historical average of P/B has been 5.35. The trend has been going down every year for the past eight years, but even at a multiple of 4 this gives me a safety factor on a business with a very large moat.
Next, the earnings are $5 per share before getting in to see if there are any items that need to be adjusted or using a diluted amount for this. This calculates to a P/E $32.40/$5.00=6.48. The average annual earnings is $4.62 for the last five years, which gives a P/E of 32.4/4.62=7.01. The P/E average over the last eight years has been 11.73. This metric gives me confidence in the ability of Verizon to go up to a level which would normalize in the range it should trade at.
The gross margin and profit margin have maintained steady over the past eight years. The gross margin is around 57-60%, and the profit margin is around 10-15% a year. They have been able to maintain these margins even while finishing out the build out of 5G. They have added a lot of debt but are earning over $20B a year which will allow them to reduce their debt load over the years and still be able to maintain their profitability and dividend.
Verizon also can be argued to be the strongest brand in cell phone providers in the US, which is part of their moat. Five years from now they will still be making lots of money. They pay a dividend of $2.66 a share so I will earn over 8% a year while I wait for the price to come back to what I think is reasonable.
Throwing away items
I decided to throw away/donate back four items which I bought over a year ago. I ended up donating the 3 hole punch, Staple and Staple remover, and the Star Wars Puzzles. These items were all over a year old and we’re getting no views consistently for months. With where I am in buying more expensive items I’m going to throw low priced items away/donate them back to Goodwill. I say throw away because that’s the equivalent of what I’m doing on these items by giving them back to Goodwill. They main reason I’m doing this is I don’t want the items I have to take up too much space at my house. As I continue down this road I would end up having a larger percentage of cheaper items I’ve had for longer periods. This would be fine if I didn’t care about the amount of space I was using but I don’t want that to end up being an unlimited amount of space in case I ever move into a storage unit. I will throw away/donate some more items over time like I did with these as I go along. I lost $5.27 by doing this, but this represents less than one percent of the value of inventory I have currently.
I sold the TI BA II plus for $9.99 and made $2.98 profit off it clearing 50% profit margin on what I paid. The lower amount flips offer a lower level of risk for me, but the profit amount of them is less desirable the higher amount I have to invest currently. The reason for this continues to be the amount of time involved with a smaller item is the same as a larger item to find and ship. I am focused on trying to get my profit amount higher on a per item basis as the less expensive items in my inventory sale off.
TI BA II Plus Calculator
I could take a different path and stick around a max price point of $10 and scale up very well. I would end up with hundreds of items at a certain point though and would need a storage space to run these. This strategy would be limiting the amount I could make per hour, and would also turn into a dedicated side hustle. This is not what I’m looking to do with this currently.
The second item I sold was the Halloween Queen Sheet Set. I sold it for $39.95, which included me paying shipping. I made $3.37 profit on this item, and I lowered the price, because the probability of selling it past Halloween goes down a lot. This was lower than what I expected when I bought the product, but I will always be happy with making money on any flip.
I bought two copies of an Accounting book off of Amazon in an arbitrage situation which were selling for much less than the others online. I paid $5.54 for one copy and $6.27 for the other copy. The remainder of those selling online are going for around $25 used and $100 new. I’ve relisted the copies I’ve bought for $25, and with the sales rank of them there should be 5-10 copies sold a year. I am using the same marketplace I bought the book on to resell it. This is not a typical way I would do a flip, but it is a viable method to find items.
The last item I bought is a set of Brooks Brothers Sheets I found on a clearance rack, and I paid $12.99 for them. Buying at the price point I did puts me at a very low risk level overall for this item. Clearance racks are a great way to reduce my risk, and offer me the opportunity for a good upside. If this set were to sell where I currently have it priced I could make around $20. I’m looking to make this amount on an item if I go out and source it at this point in my flipping journey. Keeping profit amounter per item at $20 keeps my per hour rate high.
I have bought three items since my last update. I have not sold anything since then. I bought two sets of sheets which are they same and cost me $64.94 each. I also picked up a receiver for $22.29. This ends up putting me slightly over invested by $.45. This is a good spot for me to be in and I have 36 items total.
Receiver 8-28-23
I am keeping long-term thinking in mind with where I am and knowing after ten years this will end up being more than I could guess when I started this. I’m 14 times my initial investment at this point, and know I will end up 100x times my investment at some point in the future.
If I keep at this long enough it could be 1000x times my initial investment, but for this to occur would be in a form I probably don’t fully know, and that’s ok. This is a fun thought experiment to me. I would guess for me to get to 1000x I would be running a much larger inventory, or have diversified the profit I have made into a different business investment opportunity or opportunities. I could imagine if I were to get to the point with $1000 a month coming in I might try to invest in a way the inventory I would have would not be out of hand, and also not have such a large amount invested in my inventory. With that amount of money I could pay a mortgage on a rental property after building up a down payment and use leverage to magnify what I had created. I could also buy a small business of some type which would throw off money. There are endless possibilities, and I am not sure how it will go if I get to that level, but like I said it is a fun thought experiment.
Since my last update I have sold three items and bought one new item. The three sells puts me over $500 at this point since I started doing this just over a year ago. I am very happy with my result and if I were to try just keeping the inventory level where it is right now I believe I could make $500 a year off of it without growing it any bigger than $500. This is very interesting in my mind to think in just over a year I was able to build a small amount, $36.38, into something which could make me $500 a year.
The $500 is a conservative number for me to say a year. The reason I say this is because I have made $411.68 in profit at this point in 2023. I’ve averaged $54.89 in seven and half months at this point while I’ve continued to build. This would put me into a spot where I can easily take $500 a year moving forward to spend on whatever I like. This amount is something to me which actually could be worthwhile to do something enjoyable or be invested for the long term and help me out in life later. To make this it would take me about 20 hours a year at the most and I would control the time.
For $500, I could drive to a national park and camp out for a long weekend and still have money left over every year. I could take the $500 and put it into a mutual fund or EFT investing in the S & P 500 for the next 30 years and have in the range of $75,000 at a 9% annual return. Little amounts turning into something which could one day help. However, what I am going to do is to try and keep reinvesting this money all back into inventory.
I sold the White Twin Sheet Set for $59 and ended up making $12.69 profit on August 7th.
I sold the Logitech Mouse for $13 and ended up making $1.41 profit on August 11th.
I sold the William Morris Duvet Set for $83 and ended up making $31.48 on August 17th. This is a very good flip in a quick time as I hoped it would be.
I bought a Halloween Queen Sheet Set on August 2nd for $21.64.
William Morris Duvet Set
This brings the total amount to $521.69 in possible inventory, and I need to invest $151.72 at this point to be fully invested again. I am focused on buying sheets and the like for a while to keep myself fully invested. I know this area really well and know I have a lot of value when I buy and can get out my money fairly easily in this area if I need to liquidate a set of sheets. I’ll be looking for good deals and keep on reinvesting.
