I don't understand how these people make money on Ebay (investment, advertising)
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My average costs to sell on eBay, just talking about eBay and PayPal fees here,not the cost of the item or my time, is between 12 and 15%.
I could sell things at an auction house and pay between 22% and 30%, if I sold things like that.
Sometimes I sell vintage things. I could sell my vintage things on Etsy for less but since Etsy is more about the handcrafted, my stuff will likely sit and sit and sit in an Etsy shop and when it does sell, overall the prices are lower than what I'd get on eBay. On eBay my same item will usually sell within the span of one five day auction; rarely do I have to re-list it.
I could take my stuff to a local consignment shop, especially since I sell a lot of second hand higher end clothing items, and they'd charge me 30% to 50% and again, it would sit there waiting for the right buyer to come along who wanted that particular item in that color and in that size.
I could open up a brick & mortar shop (I would love to do this, actually) but I don't have the $1000 a month rent for a tiny storefront, plus 1st & last and utilities. Heck, that's more than my apartment rent and no guarantee I'd get the traffic needed to make any profit.
I could sell on Craigslist. Most of what I sell is not appropriate for Craigslist but when I do the CL thing, people expect to pay much less and I have to deal with 15 "tire kickers" and dumb emails before I actually sell my thing. I use CL for things that are a pain to ship and that are ordinary household items.
I could have a yard sale, and the pre-owned dress I sold last week on eBay would bring me $5 at most compared to the $45 I sold it for on eBay.
Yes, eBay fees have gone up over time. Still, where else am I going to get that kind of an audience for my stuff? How else can I sell the same amount of stuff without having to leave the house, meet up somewhere, haul my items to a consignment store or flea market, or make appointments for 10 people to come look at the item and then change their minds?
It is a business (for me) and there is a cost to doing business. I build my costs into my start price and I don't buy stuff to re-sell that I know won't bring me a certain minimum amount. I offer free shipping on almost everything so I don't have to worry about buyers complaining about that and I build that cost into the opening bid. I have become more selective over the years about how much I will pay for something that I plan to re-sell, to compensate for the fee increases, and yes, that makes my inventory search a little more challenging but I am still able to make money on ebay, and how much I make is up to me. I keep track of all my costs and fees and file a schedule C with my taxes each year and this generally results in an increased tax refund for me, just like a part time job would.
It generally equals a part time job for me and that's because I am lazy and I only work on it a couple weeks a month, sometimes not at all, but I know if I wanted to I could do it 40 hours a week and I have done so in the past.
I realize this is not going to work for everyone, and I understand the frustration from someone who just wants to unload some clutter or someone trying to sell new goods and having to compete with mega sellers and their penny auctions. I'm just sharing why eBay works for me as a seller. I've been selling since 1999 and it has taken me a lot of trial and error (and money lost) to figure out what sells best and how to maximize profits.
You can sell an item for a loss and make all your profits on shipping and handling.
Example: I once bought a cell phone car charger for 1 cent + $4.99 shipping and handling. When the package arrived the shipping was 83 cents. If they paid $1.00 for the charger, they lost 99 cents on the charger but made their profit on the rest, less the fees.
Ebay stopped such sales a couple years ago, since final value fees now have to be paid on the shipping and handling as well as the price paid for the item.
You can sell an item for a loss and make all your profits on shipping and handling.
Example: I once bought a cell phone car charger for 1 cent + $4.99 shipping and handling. When the package arrived the shipping was 83 cents. If they paid $1.00 for the charger, they lost 99 cents on the charger but made their profit on the rest, less the fees.
Ebay stopped such sales a couple years ago, since final value fees now have to be paid on the shipping and handling as well as the price paid for the item.
despite the fact people still have to pay FVF on shipping people still do this ridiculous practice of 0.01 for the item and $50 for shipping. I know in reality buyers should be concerned with final price and if it's a good deal and shoudln't care about the breakdown of how much is shpping and how much is product but many buyers get pissed off when they were charged $5 for shipping and shipping only cost $1.69 for first class which makes it even stupider why people still do this. they are not saving any money and they are potentially gonna get a buyer who's gonna complian. if its a little out of line ebay wont do anything but if shipping is getting excessive ebay will pull the auction and maybe penalize the seller.
only reason i can gues why people still do this is people can get item cost back but not shipping costs in some dispute situations so maybe they are protecting themself in that the buyer cant get all their moneey back.
It does have something to do with refunds. The buyer pays the return shipping and that has become a standard. I'ts close to one of the remaining seller friendly rules.
Buyer's should add the price of their bid and the stated shipping and handling and make their decision based on the total. Whether it is 99 cents + $4.99 s&h or $4.99 + 99 cents s&h should not matter. Sellers with the higher s&h will see that in their sales results and after re-listing a time or two, they may lower it to be closer to the average for that type item.
Last edited by howard555; 07-31-2013 at 02:13 PM..
With the detailed seller rating system, buyers can anonymously rate you based on shipping cost, shipping time, etc. As a seller, I NEVER charge more than the actual shipping cost. I used to use Priority Mail exclusively and I used their free boxes and so forth, so I didn't need to purchase much and I never charged even so much as a small handling fee. If it cost me $10 to mail you your shoes, you paid $10, no more.
Still, I had an average less than five stars on the detailed seller rating for shipping cost and that ticked me off. I have now started running almost all of my auctions with free shipping, and I just build the shipping costs into my sale price. It hasn't hurt sales and people no longer have the option of "rating" me at all with regard to shipping cost when they got free shipping.
With the detailed seller rating system, buyers can anonymously rate you based on shipping cost, shipping time, etc. As a seller, I NEVER charge more than the actual shipping cost. I used to use Priority Mail exclusively and I used their free boxes and so forth, so I didn't need to purchase much and I never charged even so much as a small handling fee. If it cost me $10 to mail you your shoes, you paid $10, no more.
Still, I had an average less than five stars on the detailed seller rating for shipping cost and that ticked me off. I have now started running almost all of my auctions with free shipping, and I just build the shipping costs into my sale price. It hasn't hurt sales and people no longer have the option of "rating" me at all with regard to shipping cost when they got free shipping.
So, take that, silly buyers!
yeah good point if you offer free shipping you get an automatic 5 star rating. i charge slightly more just because the nature of my product requires it be packed fairly well which means maybe 0.20 cents additonal in packing supplies plus i give a certificate with my items which maybe costs me another 0.30 cents, plus packing peanuts. on some things i come out a little bit ahead on some behind.
a good tip to anyone who's a powerseller. you get a discount on overnight usps shipping. normally costs $18.95 or something like that but you get it for $12 and some change. if you offer overnight shipping for say $15 or $15 not only does the buyer get a deal over posted shipping rates but you make a few extra bucks on your item.
I still don't understand how seller survive eBay and Paypal's fee, especially on the item like phone. eBay and PP's fee can be anywhere from 10 to 20% of your sold price.
I still don't understand how seller survive eBay and Paypal's fee, especially on the item like phone. eBay and PP's fee can be anywhere from 10 to 20% of your sold price.
Alot of people use ebay to basically just break even or make a minimal profit in hopes of converting ebay customers off ebay to their website where they don't pay fees. That is personally what I do, maket to my ebay customers, send coupons, send emails about specials I'm offering, put business cards in every item I ship out. For a long time I was making $2 per item sometimes breaking even, basically alot of work for very little money if I sold 50 items on ebay I maybe made $100 and that's really not even considering my packaging costs as far as materials. Recently however prices on ebay for my product category have gone up and I'm now making a minimum $8 per order average $16 and some items sell and make a profit of $50 to $150 so ebay has gotten a lot better for me recently
Basically to be successful you have to have a product with not a ton of competition, decent margins, and repeat buyers. You also need to convert people off ebay where there sales go from being something you pay 14% in fees on to only cc or paypal processing fees
I still don't understand how seller survive eBay and Paypal's fee, especially on the item like phone. eBay and PP's fee can be anywhere from 10 to 20% of your sold price.
What venue for selling doesn't cost? Craigslist I guess. Craigslist costs in terms of time wasted though, way more than eBay or a regular B&M store.
You have to have a decent profit margin. You have to get stuff cheap enough or sell it high enough that the fees are tolerable.
It's not that different from any brick and mortar store when it comes to strategy.. well, the B&M store will probably cost more but you might sell more in volume, I dunno.
What venue for selling doesn't cost? Craigslist I guess.
Ebay owned about 25% of Craigslist as of about 2008.
And Craigslist has less than 3 dozen employees.
When Ebay buys the whole ball of wax, the free ads will end.
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