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Analyze Your Resources and Equipment Needs
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When your business grows, you usually need to expand your business s fixed assets. The physical constraints of your equipment and workspace become apparent after a sales boom. We mentioned this earlier in our discussion about the costs involved in hiring employees. But even if you continue to work alone or maintain your current staff level, you may need to invest in faster computers or better equipment. You may also need to move to a larger or more efficient workspace to keep up with the demands of your success. Equipment and location upgrades can be really expensive, so it s essential that you consider these factors when planning the growth of your eBay business.
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Secure Capitol for Growth
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We ve all heard the old adage, It takes money to make money. All the other factors of growth discussed in this chapter have a major component in common: they all take money. And you have to plan for how you re going to pay for it all. A common pitfall that many businesses experience is an inability to manage their cash flow. When sales are up and the money is rushing in, the temptation is to start reinvesting wildly. While the instinct to reinvest is a good one, it can land you in financial trouble. In situations like this, many small businesses find that they re unable to pay the bills, even though they re enjoying huge profits. Learn how to anticipate the peaks and valleys of sales throughout the course of a month. Remember that profit on paper is different than cash in hand. It s important to reinvest profits, but don t spend every penny you make. Know when and from where your cash needs come, and track your cash intake throughout the course of each month. Keep a cushion for unexpected expenses. Consider securing outside financing to help manage your cash flow and grow your business. A secured loan or a line of credit can come in handy for investing in new equipment or inventory. Shop around for the best loan from local lenders, e-lenders, or the U.S. Small Business Administration. You can even secure financing through eBay. eBay s Seller Financing Program offers both secured loans and lines of credit. More information is available at http://
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Analyze Industry Trends
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Without new markets and fresh products, there tends to be a ceiling to growth. In 1, we talked a little bit about identifying trends and turning them into opportunities. The subject deserves another mention here, because many businesses depend on their ability to identify and analyze trends. Trend wavers, for example, follow hot items from niche to niche and market to market. They develop the experience and insight necessary to spot trends and stay ahead of what buyers are going to demand next month or even next year. Once they have a firm grasp of a particular market and its cycles, they can buy with more confidence and grow their particular position. The experience necessary to make big bets on fads and trends takes some time to develop; however, many sellers achieve great success on eBay with this kind of trend analysis strategy. There are a number of different ways to gain trend analysis experience. The best and perhaps most expensive way to do it is through trial and error. You can supplement trial and error with some hedges, though. For example, you can analyze retail merchandising trends at popular department stores
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and figure out how to beat them at their own game. You can also frequent hip, off-the-beaten-track venues. Consider these locations known to be Meccas for hipsters: Melrose Avenue, Los Angeles Haight Street and Valencia Corridor, San Francisco Bleecker Street, Lower East Side, and SoHo, New York City King s Road and Knotting Hill, London Le Marais, Rue Bonaparte, Paris Shibuya-Ku, Tokyo
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Just about any major city has its trendy spot(s). Keep an eye on what the young uns are wearing, playing, and saying. Youth culture and street culture have their way of swimming into the mainstream. If you re in the technology or electronics business, there are lots of great resources on the Web, via Podcast, (Internet broadcasts that are automatically downloaded to your iPod, portable MP3 player, or desktop media player), and even on the radio. Engadget ( and Gizmodo ( are on the leading edge of all things techie. Dozens of high-quality Podcasts analyze technology trends. (Check out the Gilmore Gang, the Engadget Podcast, and Slashdot Review. A quick Google search will lead you to these sites.) Leo Laporte, The Tech Guy, hosts an AM radio show on weekends that covers technology trends, too. You can follow stocks, too. Most companies now broadcast their quarterly earnings conference calls from their corporate Web sites. Just look up the company and follow the links to its earnings call audio files (for example, see Figure 7-2). Companies from cell phone makers to gown makers all discuss their trend analysis on the calls. Audio broadcasts of company conference calls are often archived on their Web sites. Usually they will keep the latest calls on the site for a month or so. After that, they re gone forever. Don t forget to tap the usual resources, too. Your industry contacts can provide you with forward-looking hints. Trade newsletters often indicate the direction new markets are taking. The key is to develop your sources and do some back-scratching. Keep up with your communications, and make an effort to meet people who are on the inside. Think back to our niche discussions in 1. It s so important to know your niche and keep up with the competitive landscape. After all, when you stay ahead of the trends, you re essentially beating your competitors to the punch. eBay is also a great resource for trend-spotting. eBay s Hot Categories Report gives you a monthly overview of the specific categories seeing the most bidding action. This list helps identify exactly where demand for items is currently exceeding the supply offered on eBay. Use the eBay Hot Categories Report to help guide your inventory purchasing decisions, and leverage
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