Full timers, need some input please on numbers.

[cntryislandboy]

I would very much like to do this full time. I've been doing some here and there, and just ready to be my own boss. I'm no stranger to long days and hard work, I'm just tired of making someone else money so I ran some quick numbers which I listed below. I also have knowledge and currently posses several comics, die cast, figures, and several thousand sports cards that would be in addition to Lego. 

Income Goal	$60,000
20% for taxes	$12,000
Need before fees	$72,000
Bricklink sales	$38,500
Bricklink fees @6%	$2,310
Bricklink Profit	$36,190
eBay sales	$20,750
ebay fees	$2,697
eBay profit	$18,052
Amazon sales	$20,750
Amazon fees	$2,697
Amazon profit	$18,052
Total profit	$72,294
Sales needed	$80,000

 

So if my calculations are in the ballpark I'd need to clear about $80k in sales to bring home $60k by the time you add in taxes and selling fees. 

Then comes inventory, shipping supplies, and office supplies, I'm thinking I need to purchase at a base rate of 2x part out, would be in the neighborhood of $50-55 a year to allow for replenishment and growth. In turn this would bring my required estimated sales of about $130,000 a year to clear and bring home $60k a year. Do these numbers sound about right? 

 

Also those that have gone full time, do you strictly stick to bricklink, ebay and amazon? Or have you ventured off to build your own website in hopes of saving some of the high fees, but then comes the website fees, and the task of bringing traffic to your site and gaining customers. 

[bricketycricket]

I'm nowhere near a full timer, but I am curious: If you're only bringing home 60k each year, where do you get the capital to buy the tremendous amount of Lego that is necessary to make that amount of income?

[Bold-Arrow]

What about cost of goods??? 60k on 80k is unrealistic 

 

edit: a reasonable return is 20-30%

Edited April 27, 2015 by Bold-Arrow

[cladner]

I'd recommend reading this thread entirely.

[Kevink24]

I'd recommend reading this thread entirely.

​I am more or less a collector and build with my kids ...and Legodog's information was very informative and also "scared me straight" into "not" doing this full time.

[cntryislandboy]

bricketycricket, your right it would take a tremendous about of initial inventory. I'm gradually building up my inventory and my plan would be to hit it hard and keep plugging away until I had enough of inventory and steady stream of sales before taking the leap. 

 

bold-arrow, I was stating I needed $80k to bring home $60, plus the cost of inventory and supplies. So actually I was thinking I would need closer to $130K in sales to allow for the $60k salary, supplies, growth, and replenishment. 

cladner, thanks I'll check out it, I'm sure I'll be getting back to you with some questions. 

 

[justafrog]

With any LEGO business, turning it into a full time job is going to take lots or time or lots of up front investment capital.

We are just now making full-time money plus the money we need to grow with our LEGO business (and finally able to start liquidating the books) after an initial investment of about $35,000 (mostly stock, some infrastructure). The growth we're able to do on the current income will allow us to pay back that 35K at a reasonable rate of speed.

The numbers may look slightly different depending on what kind of LEGO shop you're intending (sounds like complete sets, we do loose parts), but either way it's a big chunk of money to get it off the ground quickly, or it's a matter of very slow growth with its own profits and keeping your day job for the duration.

[Deez_Brickz]

Only 20% for taxes???  Are you in the USA?

[Bold-Arrow]

bricketycricket, your right it would take a tremendous about of initial inventory. I'm gradually building up my inventory and my plan would be to hit it hard and keep plugging away until I had enough of inventory and steady stream of sales before taking the leap. 

 

bold-arrow, I was stating I needed $80k to bring home $60, plus the cost of inventory and supplies. So actually I was thinking I would need closer to $130K in sales to allow for the $60k salary, supplies, growth, and replenishment. 

cladner, thanks I'll check out it, I'm sure I'll be getting back to you with some questions. 

 

Lego takes a good time to appreciate, you will soon realize that you will be sitting on your inventory for a good while before realizing significant profit. 

[cntryislandboy]

justafrog, I defianlty don't have that kind of cash for initial investment, I'm currently take all my sales money and buying new inventory, supplies, and storage. I'm also actually parting out about 90% of what I'm doing, which in turn takes more time. I also won't be making the jump to full time until I'm at least in the ballpark of what my current salary, wish is a lot less than $60k but I also want to make it worth it to go full time. 

deez_brickz, yes I'm in the states

[cntryislandboy]

bold-arrow, your right about that, my currently bricklink store is about 42k pieces, I've also only sold 2,200 pieces in 25 orders, and one was 600 and another 500, with a total of about $482 since october. So it's obvious I need to really build my store up. My goal would be to make the jump in the next couple years if I truly decide to go all in.

One thing that will help I believe is all the cash flow from all my other collectibles will be going towards inventory.  

[Deez_Brickz]

Your numbers are so incomplete I don't know where to start. 

FICA + self employment tax will be around 13% basically off the top. That's before fed or state. 

From studying some of the other high volume sellers, you will need to accept a lot lower profit margin in order to maintain sales. There is south competition in the part out business. 

Where are you going to source all of your lego?

[Darth_Raichu]

First off I am not a full timer, I am not even a mathematician.  But if your sales is $80k, shouldn't the 20% taxes be $16k ?  That plus roughly $8k in fees means you are only netting $56k ($4k under the goal). 

[teamhappyfrog]

What about health insurance and other benefits(401k etc...) that a FT job provides you?  One area where you can save on fees are toy shows, the local one that I do on & off costs me $50 for the table and runs about 6hrs,  I make about 1k + or so(only had a sub 1k event).  Then again I have never done Lego there, but will in May.

[cntryislandboy]

deez_brickz, 20% is just an estimate, I listen to ALOT of Dave Ramsey and he always suggest people who are going to start up or run their own business set aside 20% for taxes, not to mention these are just rough estimates to see if it's worth going all in, if I do decide to go all in then I'll probably set up everything with an accountant

darth_raichu, I was adding 20% to $60k and getting $12k because that is what would be take home, the fees would just be part of business expenses. So taking a reportable income of $72k should get me close to $60k after taxes. I could be wrong, and that is why I will be setting everything up with an accountant. 

[KShine]

What about health insurance and other benefits(401k etc...) that a FT job provides you? 

​Yes, a "real" job might provide you with these things (Insurance, 401k) -  but it could also cost you your soul.

[cntryislandboy]

teamhappyfrog, $60k will give me enough to pay for health care and some 401K/Roth. Hek I make about $36k a year now and that is gross, a huge pay cut from my previous job which I was informed I was no longer required along with 24,999 other personnel. But you gotta do what you gotta do. I also figured I could do a couple shows and flea markets a year and that would help. 

[cntryislandboy]

Kshine, that funny you should say that. I currently do service work and see the cost of what our customers are charged vs what I make on the hour and just think man why am I making so much money for other people. Granite there are other expenses besides my hourly pay for these jobs, but still there is a lot of room. 

 

I'll just be glad when my wife goes back to work in a couple years than I will be able to hit this goal HARDCORE which will also allow me ample time to build up inventory and develop my business skills. 

[hepcatpunk]

Wait, you sold $482 since October from Bricklink, but are estimating you'll do $38,500 there in sales annually?  Ummm......

 

 

 

 

[cntryislandboy]

hepcatpunk, the $38,500 is an estimate goal, between the 3 selling sources. Also this wouldn't be until i'm built up. Obviously I have a long way to go, not to mention only 42k pieces. I figure I need to get my sales up in the ballpark of $25k part time before I could dive into it full time, and doing it full time would allow me to make up the difference of $13,500 

[tacsniper]

hepcatpunk, the $38,500 is an estimate goal, between the 3 selling sources. Also this wouldn't be until i'm built up. Obviously I have a long way to go, not to mention only 42k pieces. I figure I need to get my sales up in the ballpark of $25k part time before I could dive into it full time, and doing it full time would allow me to make up the difference of $13,500 

​I am sure Dave Ramsey will say keep your real job and do this Lego sales as a hobby UNTIL IT CAN CONSISTENTLY replace your salary. You may want to reconsider doing your real job for a few more years or look for another real job that will increase your income until Lego can replace your expected salary ($60k net) for 3 to 5 years in a row.

While you are doing that, you may want to start thinking about your business plan. Like one other post mention, where are you going to source your lego? If you are relying on big box store clearance, factor in the time, gas, vehicle maintenance it takes to go store hoping to build up the inventory. When you have it all figured out and ready to dive into it full time, you will be much more prepared.

Edited April 27, 2015 by tacsniper

[cntryislandboy]

tacsniper, i couldn't agree more,this isn't a oh i'm going to quit my full time job and do this. I'm basically trying to research and see if I want to spend the next couple years building up everything hardcore and dive into it full time, or if i just want to keep my current pace and just do a little here and there. 

 

Then again I can get gazelle intense as Dave says, sell everything under my roof, complete baby step 2, then get gazelle intense about building up the Lego business. 

[tacsniper]

Then again I can get gazelle intense as Dave says, sell everything under my roof, complete baby step 2, then get gazelle intense about building up the Lego business. 

You are right... Dave will probably tell you to sell all those plastic and cards and other collectors item you have to finish baby step 2... but ​it takes a year or more for Lego to appreciate with decent return. Now you gotta factor that  Personal finance is so fun *sigh*

[cntryislandboy]

tacsniper, i tell you what you say it in your head over and over, but it's a little different when you read it in black and white. Sad thing is, I'm almost willing to bet I could sell off all my collectible stuff and complete baby step 2, might take me a year to do it, but oh how nice it would be. 

[diablo2112]

Honestly, the capital required to generate $60k yearly after tax income on full-time lego sales in much, much higher than what you're estimated (if you estimated it at all, I'm not sure I see what you're counting on for purchasing sets and flipping them).   Bare minimum of $500k to start if you want assured income and sales right away.  I don't think $1M is too much, actually, for this to work out after all your fees and with selling prices that will generate consistent sales.  

 

At those investment levels, there are so many other options, including the good-old stock market that can be structured to generate the 5-15% return you'll be looking for, and with considerably less work and hassle.  There's some big-time sellers here, and very, very few that make it their only source of income.  For most of us, this is part-time, hobby-class level of investment.  I shudder to think if I had to turn this into the sole source of income for my family.  I'd find a hundred other things to do before trying to eke a full time living out of Lego reselling.  

Edited April 27, 2015 by diablo2112