Why is this important? It helps you focus on and improve your effectiveness and efficiency. You see I mention these words lots of times in my blog posts. That’s because I truly believe that’s where you can differentiate yourself from the rest. As human beings, we often find hard time to step out from our comfort zone. We ignore the probability to improve our lives, or as an idiom says,” if it’s not broke don’t fix it.”
To run a successful business is not about to make everything working, it’s to be selective. I came across more than 10 products when I was running my product researches on ebay, but only ended up selling 3 of them right now. It was not because the rest did not work out. In fact, all of them are decent products and I made money on any single one of them, however there are ones with lower profit margin. That means I have to sell more time in order to reach my dollar target. The time I spend in processing orders and looking after customer inquires doubled or even tripled, so as soon as I find better products, they are out of my consideration.
Timothy Ferriss talked a lot regarding 80-20 rule is his book, The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich (Expanded and Updated). As this is the spirit of being selective, I decide to spend a little bit time here to explain it. The 80-20 rule was created by Italian economist Vilfredo Pareto early last century. After the rule was created, it has been applied into different areas. The basic idea in 80-20 rule says in anything a few (20%) are vital while many (80%) are trivial.
To apply this to the ebay business we are talking about here, I often find it is true that about 80% of my income are earned from about 20% of my products. I was still offering the other 80% of the product just for the sake of giving more options to the customers, however very quickly I realized that was a silly idea as it wasted my time (as I have to list the products) and money (as I have to pay listing fees to ebay for each product), so I took down about 40% of the products that were not selling (to be more accurate, no selling in 60 days). That action not only saved me more than $25 per month, but also saved me 15% of my time on running those products. On the customer services side, this is also true. 20% or even less in my situation, about 5% customers were causing me 80% of the time on dealing issues with them. To improve on this, I fired some of the customers – don’t assume customers are always right. Trust me, there are irresponsible people out there, so the best way to save yourself from trouble is not to deal with them in the future.
Be selective and say no to options that did not work the best.
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