How do people sell things on Ebay so cheaply? (collections, pay, buy)

[desertsun41]

The difference between your example of the same product at BestBuy for $10.99 and $3 cheaper on Ebay just goes to show you how high those big box stores mark things up. An Ebay seller is buying a large quanity direct from the manufactor.

Here is an example:

I have a cabinet store. We have big banners and signs saying "50% off list to the public and contractors". List is MSRP.

I have people all day long bringing me in bids from the big orange and big blue store and my price is half. And Im still making about 18% markup plus a rebate for volume and 72 hour net to the factory. Sears charges 25% over list price for home improvement products. They are the true criminals.

The markups are even higher in grocery stores. When a grocery store puts a sale tag on an item knocking 40 cents off of a $4.00 item, people think it's a bargain and empty the shelf of that product in an hour. The store bought that item for about a dollar and a half. They get the last laugh.

Cars. You ever hear those ads that scream in your ear that say something like: PAY ONE DOLLAR OVER STICKER ?? Well sticker is list price or MSRP. the key letter stands for suggested. There is several thousand to as much as 9 thousand dollars play room for higher price vehicles. Plus the car dealer gets rebates for volume and fast net pay. So anyone that has fell for paying a dollar over sticker price got raped so badly that the police are looking for your salesman. That is just about the most successfull trick car dealers use because it fools many fools out there.

[sunsprit]

There's a lot of stuff sold on eBay that isn't sold "cheaply", especially new merchandise.

Unless somebody is buying distress merchandise (overstocks, 2nd's, flea markets, auctions) or is getting rid of their unwanted items at any price just to get rid of them, there's costs of doing business on eBay just like any other business which affect one's "profits".

By the time you factor in eBay's (and PayPal's) selling costs, the seller must have a lot more than a 10% mark-up to make any money. Exhorbitant shipping and handling costs, especially those added on after an auction by a unethical seller are killing a lot of eBay's reputation for bargains. It's one thing to see those extra fees listed in the auction and know that the seller is using S&H for a "profit center", but it's quite another to have the seller not disclose this in an auction listing and then try to charge this on the final sale total.

I know a few people who specialize in buying estates and auction items, and search flea markets for stuff they know the market on, and sell most of it on eBay. With a lot of work, they have netted as much as $10,000 in a month. But don't think this was easy money ... it's a business just like any other, and these folks are up in the wee hours each morning to be the first to respond to garage sales, and drive a lot to auctions with a truck and trailer for their purchases. They've got to be very savvy about what they buy or they'll not be making a profit at the end.

Another way folks sell on eBay is to be a "dealer" for a wholesale supplier, such as CD's and DVD's. I've bought stuff this way on eBay from a high volume seller, only to have the item shipped from a warehouse in Texas or someplace else.

Once, I even bought a kitchen knife set and it was shipped as a "gift item" from Amazon direct to me in the seller's name; I'd bought it for a few dollars more than the current price on Amazon although my total cost was a couple of dollars less because the seller's flat rate shipping charge was less than Amazon's shipping fee would have been on the item. It was a hard way for the seller to make a possible $3.00 net.

The big advantage for me on collectible items as a seller is that I reach a much larger potential marketplace than I would in a local newspaper or auction, which is the same reason others sell on eBay. That bigger market has the potential for a "true price discovery" of a much larger auction; ie, I have the potential to get a higher price for my items than if I'd sold them locally. Especially if I have a couple of bidders who really really need the item I have for sale.

In the end, you have to be a savvy buyer to know if you're getting a "deal" on eBay. Sometimes, you're not ... especially with damaged or worn out goods, or collectable items that would not bring as much money if you had the ability to inspect them closely at an auction.

[OC Investor2]

Another thing to watch out for on E-bay when it comes to CD's DVD's etc. - Piracy. The item could be fake.

When I was looking for Baby Einstein DVD's there were sellers on Ebay listing 15 DVD sets for $10. Similar sets sold in costco for $100+. The Ebay buys were shipping from China. And the packaging in the picture looked totally different, plastic sleeves in a binder v. DVD box sets. Total fakes.

Bought a nike golf shirt on ebay - or what I thought was a Nike golf shirt - it was a counterfeit.

Some times if a deal looks to good to be true, it is.

[RjRobb2]

Originally Posted by desertsun41

The difference between your example of the same product at BestBuy for $10.99 and $3 cheaper on Ebay just goes to show you how high those big box stores mark things up. An Ebay seller is buying a large quanity direct from the manufactor.

Actually, Best Buy sells CDs at cost as a loss leader. That is why you buy a CD for like 11.99 at Best Buy but go to like Sam Goody and that CD is 16.99.

One of the reasons sellers get items so cheaply for Ebay is that they go to auctions and by salvage pallets. If a pallet of merchandise gets damaged in shipping the receiving company can deny the shipment and the sender usually writes it off as a loss and then sells the items at an auction. Many times the items arent really damaged or barely damaged. You can sometimes pick up these pallets for dirt cheap.

Another method of acquiring cheap goods is to by inventories up from stores that are liquidating their assets. These businesses need to get rid of everything and are usually desperate for cash so they sell their goods pretty cheap.

[desertsun41]

Originally Posted by RjRobb2

Actually, Best Buy sells CDs at cost as a loss leader. That is why you buy a CD for like 11.99 at Best Buy but go to like Sam Goody and that CD is 16.99.

One of the reasons sellers get items so cheaply for Ebay is that they go to auctions and by salvage pallets. If a pallet of merchandise gets damaged in shipping the receiving company can deny the shipment and the sender usually writes it off as a loss and then sells the items at an auction. Many times the items arent really damaged or barely damaged. You can sometimes pick up these pallets for dirt cheap.

Another method of acquiring cheap goods is to by inventories up from stores that are liquidating their assets. These businesses need to get rid of everything and are usually desperate for cash so they sell their goods pretty cheap.

I didn't know CDs were loss leaders. They probably make a pittance of a profit. My other post I picked on the monster sized markups that the big box stores charge the consumer. But...I happen to know that Lowes and Home Depot use the tool dept for loss leaders. Usually tools are a pittance of about 10% markup. You ever see those dumb ad gimmics where a big bag comes in your mail box and it says you can fill the bag with everything you can fit into it and get 10% off? There is always small print on the bag that says all tools excluded.

[RjRobb2]

Originally Posted by desertsun41

I didn't know CDs were loss leaders. They probably make a pittance of a profit. My other post I picked on the monster sized markups that the big box stores charge the consumer. But...I happen to know that Lowes and Home Depot use the tool dept for loss leaders. Usually tools are a pittance of about 10% markup. You ever see those dumb ad gimmics where a big bag comes in your mail box and it says you can fill the bag with everything you can fit into it and get 10% off? There is always small print on the bag that says all tools excluded.

I did a business analyst on Best Buy and Circuit City in a Business Management class a few years ago. They both use CDs for loss leaders. I think the actual market on them is like 3%. However, there markup on other items is very large.

They give their employees items nearly at cost and they get anywhere from 20% to 80% of items. They do not get any discounts on CDs though due to them being a loss leader. A friend of mine works at Best Buy part-time and he got me a Sony Camcorder that is normally $350 for $210 using his discount. The big markups come on blank media. He gets like 50 stacks of CD-R for like $3.

[desertsun41]

Originally Posted by RjRobb2

I did a business analyst on Best Buy and Circuit City in a Business Management class a few years ago. They both use CDs for loss leaders. I think the actual market on them is like 3%. However, there markup on other items is very large.

They give their employees items nearly at cost and they get anywhere from 20% to 80% of items. They do not get any discounts on CDs though due to them being a loss leader. A friend of mine works at Best Buy part-time and he got me a Sony Camcorder that is normally $350 for $210 using his discount. The big markups come on blank media. He gets like 50 stacks of CD-R for like $3.

Your friend got you a discount. That reminds me. My ex step-son worked for Best Buy. He got me a new surround system. He said they check to make sure it is for the employee and not a family member and not a friend. Because he did not buy anything simular to this item in his past they gave him the ok to purchase it.They seem to be pretty strict about employees buying for family and friends.

[noid_1985]

I always wanted to know why FYE and Sam Goody sells CDs for $16-$20 while Best Buy and even Target sells them for $10. However, I've noticed that the $10 sell price usually increases to $13.99+ after the CD has been out for about a month- good catch RJ

[RjRobb2]

Originally Posted by desertsun41

Your friend got you a discount. That reminds me. My ex step-son worked for Best Buy. He got me a new surround system. He said they check to make sure it is for the employee and not a family member and not a friend. Because he did not buy anything simular to this item in his past they gave him the ok to purchase it.They seem to be pretty strict about employees buying for family and friends.

He does it for me when I need something but I am about the only person other than his mom that he does it for. They are pretty strict about it. He has to watch his frequency and I always have to give him cash in advance to get it.

[RjRobb2]

Originally Posted by noid_1985

I always wanted to know why FYE and Sam Goody sells CDs for $16-$20 while Best Buy and even Target sells them for $10. However, I've noticed that the $10 sell price usually increases to $13.99+ after the CD has been out for about a month- good catch RJ

FYE and Sam Goody have to make profit off the CDs because that is their main product. That is also a reason why they have drastically cut back on those stores. Their use to be three at my local mall and now there are none.


The price likely increases after the initial release because the retailer is likely buying a bigger quantity at first so they get a lower wholesale price. After the initial release, they just buy enough to maintain inventory so they are likely paying a higher price.