Now that you've heard of it, you'll start noticing the Pareto Principle in every facet of your life. (In other news, the experience of first learning a new word or some bit of information and then seeing it everywhere is called the Baader-Meinhof phenomenon). For example, in a classroom or meeting, 20% of the people will give 80% of the comments. You can make your house look 80% cleaner by picking up 20% of the mess...etc. However, the most interesting observation for us comes from applying the Pareto Principle to finances and work, specifically reselling on eBay. In any given business, 80% of the profits come from only 20% of the products. This results in several fascinating bits of information that we can apply to make more money in less time.
To illustrate our points, we chose one of our medium-sized eBay accounts that is pretty close to what the average part-time or new full-time eBay seller is doing. Between 800 & 900 active listings (mostly clothes and shoes with a few hardgoods mixed in), 200-250 sales per month, around $8,000 in sales, and roughly a 40% profit margin. We input every single one of our sales for the past 90 days into a spreadsheet (yes, it was as tedious as it sounds...all in the name of providing helpful information!) and found the following: