Net Profit? what net profit?

[jeeplvr2000]

Ebay sellers would benefit greatly if they itemized every cost associated with their sales. I just did it right down to the last penny and was sickened by what ebay is charging sellers per sale. With taxes, insertion fees, seller fees, and shipping, profit margins on ebay are nearly worse than just giving the item away. I honestly don't know how some people sell items for under 20.00 unless they're getting them for free. My seller fees with shipping on just one of my items is substantially more than the build cost of the item. My choice is to raise my price and sell nothing. Am I missing some ebay selling secret here?

[dbfolks166mt]

     Don't forget you are also going to pay income tax on net profit when you file your taxes. That is provided you show a profit. 

[downunder-61]

Totally, find your niche and be an expert at it, a formula that is hard to beat.

[stainlessenginecovers]

@nuclearomen  ......ALL this stuff should have been figured out prior to someone deciding to sell and try and make a business for themselves....

I figured that out when I was 6 years old doing Kool-Aid sales on a folding table on the sidewalk in front of my house. 

[redmodelt]

There ARE people that sell for the fun of it. There are people that sell as a side line thing. They are not here to make big bucks, just clear out some stuff. Ya, surprise, we are still out there. Often I am happy to break even after fees and clears my shelves off.

Everything being said about knowing beforehand what your profit will be, that is on the seller to figure. Same as knowing how much to add to the cost of the item to cover that "FREE" shipping, so you don't go in the hole.

[7606dennis]

What is NET PROFIT?  I understand what GROSS INCOME and NET INCOME are but I've considered PROFIT to be simply PROFIT.

[chapeau-noir]

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@luckythewinner wrote:

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@tdebuys wrote:

Yep but not many people know where or how to buy an item that only costs $2 that the public will pay $18 to buy.  900% mark-ups are not very common on items that will sell in a volume.

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Correct.

And not many people know how to use $2 worth of groceries to make a meal that the public will pay $25 to buy. That is what separates a successful restaurant from the dozens and dozens of failed ones. 

If it was easy to make money on eBay by simply buying an item wholesale and marking up, then everyone would be selling here and everyone would be rich. 

The barrier to entry on eBay is incredibly low - all it takes is a computer, a checking account and a pulse. And with millions and millions and millions of sellers competing to find sources of inventory, it takes a special knack to continually find sources of inventory that the others have missed. 

IMHO 95% of the work on eBay is sourcing inventory. All the rest of it - photographing, listings, packing shipping - does not really require much skill. 

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Yeah it does.  I know, because some of my inventory comes from poorly presented listings.  It's like that $2 you spoke of to make a $25 meal.  It takes as much skill to create that meal as it does to source the ingredients.

[johnrj1226]

Yep you are right. 

All sellers should  determine the market price for the items they wish to sell before they sell their first item.   eBay makes it easy to do all you need to do is research the same or similar item that have been sold.  I target a mid point price after discarding the  lowest  & highest sold price. Then source that item at a cost that will produce an acceptable  profit margin after deducting all cost of sales.  As a "rule of thumb"  if II determined a competitive selling price is $60 w/o shipping  I divide 60 by at least  5 or 6.  Which means I need acquire this item for a no more than$10 to $12  to cover my other cost of sales (eBay fees, packing material, any listing fees, etc) and produce my desired profit percentage based on the target selling price in my case I used a percentage in excess of 50% GP (gives me a little room to "dicker" if I wish) - I have been know to make more than that if the market bears.  If I can't meet these parameters I don't sell the item.  Don't do free shipping so I have a separate shipping and handling charge. 

Track my sales on an Excel spread sheet - along with other costs that come in  handy at tax time.

[farmalljr]

Net profit is what you make after your immediate expenses are taken out of the sale. Profit is what you have made at the end of the year, after ALL expenses are taken out. 

For example, you may make 10K in net profit after all fees, operational costs, and ongoing overhead is taken out. But you buy a paper tape machine or an air pillow machine that year. It's not a direct expense of one item sold, and can't be taken as an expense from a single sale. This item would be subtracted from your "net profit" to give you a sum of your overall profit. 

[innovatilife]

One of the most useful site/app I use is called salecalc (look it up on Google). It has a dedicated eBay fees and profits calculator that is always up to date. If I'm uncertain I can make a decent profit buying something to resell, I'll run it through salecalc and know exactly what my end profit number is. Because I actually research before buying, I'm practically immune from breaking even or negative profits.

I additionally try to steer clear of selling anything $10 or less. Even if I got that item for a buck, with eBay fees and shipping costs, the profits are going to be a few dollars in the end. With all the time spent cleaning, testing, photographing, packing + shipping and potentially having to deal with returns/customer issues for a few dollars is absolutely not worth it to me.

If something is going to sell for $20, I need to be able to buy it for $5 at max and be able to ship it first class under $4. Most of my items are between $30-$200 (with occasionally higher priced stuff up to $700) and I almost never spend anymore than $15 on an item.

In three years of eBay being my exclusive income, I was able to go from four digit figures in my bank account to six digit figures, and that includes deduction of all my expenses, both for eBay and personal/family.

So yes, you are doing something wrong if your profits are breaking even or worse. Like others suggested, either buy your items cheaper or raise your prices, or both. Research prior to buying is also incredibly important as well!

[katzrul15]

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@innovatilife wrote:

One of the most useful site/app I use is called salecalc (look it up on Google). It has a dedicated eBay fees and profits calculator that is always up to date. If I'm uncertain I can make a decent profit buying something to resell, I'll run it through salecalc and know exactly what my end profit number is. Because I actually research before buying, I'm practically immune from breaking even or negative profits.

I additionally try to steer clear of selling anything $10 or less. Even if I got that item for a buck, with eBay fees and shipping costs, the profits are going to be a few dollars in the end. With all the time spent cleaning, testing, photographing, packing + shipping and potentially having to deal with returns/customer issues for a few dollars is absolutely not worth it to me.

If something is going to sell for $20, I need to be able to buy it for $5 at max and be able to ship it first class under $4. Most of my items are between $30-$200 (with occasionally higher priced stuff up to $700) and I almost never spend anymore than $15 on an item.

In three years of eBay being my exclusive income, I was able to go from four digit figures in my bank account to six digit figures, and that includes deduction of all my expenses, both for eBay and personal/family.

So yes, you are doing something wrong if your profits are breaking even or worse. Like others suggested, either buy your items cheaper or raise your prices, or both. Research prior to buying is also incredibly important as well!

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Yes, research is Key.  So many list here with no idea what their cost basis is, overall fees, shipping costs and then blame anyone who will listen, that they did not make money.

Thanks for the site link.  Very handy!

[donsdetour]

Hmm been think on this stuff: a page and charts to show the costs  might be done: Would be useful to users.

May or may not do such.... LOL

[varebelrose]

" I honestly don't know how some people sell items for under 20.00 unless they're getting them for free. ""
Your profit is made when you acquire inventory for resale. I used to regularly sell ball caps here with free shipping for $9 to 12 and made a solid $3-6 profit on each. Not much, true, but a hundred sales like that adds up quickly. The same can be done with all kinds of items. My goal always was to shoot for 1000% profit on every <$20 sale.

[katzrul15]

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@varebelrose wrote:

" I honestly don't know how some people sell items for under 20.00 unless they're getting them for free. ""
Your profit is made when you acquire inventory for resale. I used to regularly sell ball caps here with free shipping for $9 to 12 and made a solid $3-6 profit on each. Not much, true, but a hundred sales like that adds up quickly. The same can be done with all kinds of items. My goal always was to shoot for 1000% profit on every <$20 sale.

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@varebelrose 

What was your cost basis to do this?  My issue is the "free" shipping, which varies per region.  Close regions, I could make this work - farther regions (west coast, TX, FL), my net would be well under $3 potentially.  Interested is learning more on this though - you are right, you can make it up on quantity, but it is a lot of work to do a lot of orders vs 10 where the profit is so much better, but potentially more fraud exposure.

[varebelrose]

"What was your cost basis to do this?"

I have collected literally thousands of caps in my life, most are in brand new condition even though "pre-owned". I wear them daily, and was selling out of my collection while also adding to it weekly. I buy them all the time for an average of 25 cents to $1, depending on what they are. Often I will see a pile at a sale and offer a couple dollars for the whole lot, and get them.

The free ebay branded 10" x 8" x 6" boxes are the perfect size, with a wrap of tissue paper and a few recycled air pillows, so packaging cost zilch other than tape. At around 10 ounces, shipping first class averaged $4 on most of them (I know it has gone up recently).

So, again, not a LOT of profit, but pretty steady and even dimes add up to dollars.

[donsdetour]

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@varebelrose wrote:

"What was your cost basis to do this?"

I have collected literally thousands of caps in my life, most are in brand new condition even though "pre-owned". I wear them daily, and was selling out of my collection while also adding to it weekly. I buy them all the time for an average of 25 cents to $1, depending on what they are. Often I will see a pile at a sale and offer a couple dollars for the whole lot, and get them.

The free ebay branded 10" x 8" x 6" boxes are the perfect size, with a wrap of tissue paper and a few recycled air pillows, so packaging cost zilch other than tape. At around 10 ounces, shipping first class averaged $4 on most of them (I know it has gone up recently).

So, again, not a LOT of profit, but pretty steady and even dimes add up to dollars.

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And how long did it take you to photo, and do the listing per item???