What is the profit point at which it is not worth selling an item on eBay?

[anestitized]

I used to think that if I make $1.00 profit per item, and if you can sell 1 million items...then hey, you just made a million bucks! But over the years I have come to realize that it's not really worth selling items too low. The top reason being, a buyer somewhere at some point is bound to give you negative feedback for something totally out of your control. After working hard all year/years, is it really worth risking your perfect feedback score over a measly $1.00? How about $5.00 bucks? Probably not, right? I'd rather throw my item in the trash than to risk receiving negative feedback over a $5.00 item. Personally I have tried to limit myself from listing very low cost items. So now my new question is, what is the profit point at which it is not worth selling an item on eBay? Here's an example, an item that I sell on eBay sells for $14.00. My cost of goods is $4.00. Then factor in all of the other costs/fees. eBay gets a percentage off of the item price + the same percentage off the shipping fee (which is a total loss on that fee because the postal service gets the shipping fee, not me). Also, I live in Massachusetts where we are automatically forced to be 1099'ed, even if you're not a business, so you are taxed by the government on your eBay sales. One thing to consider about taxes, it's not just about being taxed for your sales, because if you do enough sales then that could bump you into a higher tax bracket, which would effect ALL of your personal income earnings, not just the eBay sales; yikes! Last, there are the packaging material costs such as tape, envelopes, bubble wrap, boxes, etc.. All of these things are the expected cost of doing business. But when you add everything up, at what point is it not worth it to sell an item on eBay? 

[m60driver]

I usually seek to net a minimum $5 net profit per item.  As it only takes me about 10 minutes to list an item, that comes out to about $30 and hour.  I will occasionally sell for a lower net profit  to liquidate old stock that has not sold, but I have average gross profit margins that are high enough to absorb any and all losses.  Heck, I have enough retained earnings from Ebay sales that I could toss all my remaining Ebay inventory into a dumpster and not shed a tear.

Disclaimer: I am not trying to make a living, just trying to make some lunch money. 

[gjs_16]

Yeah, no...

Take a $10 item.

That's how I started, back when a 3 ounce First Class parcel cost just under $2...

Today First Class (with tracking) mail under 4? ounces is already $3.50

FVF's is around $1.50

That leaves $5.

So the item must cost less than $2 and I am left with $3...

Still not great, because it takes me near 20 minutes to create the listing.

Another 5 to pack and box and buy and print the label and walk it out to the mailbox.

Lets just say 1/2 hour.

So we're at $6 an hour.

Not so good.

Also don't forget the cost of the actual envelope / box (usually a minimum of 15-20 cents) and the cost of the label itself (usually another 5 cents) so lets call this a 25 cent expense.

There is more...

What if the printer develops a paper jam?

What if the WIFI suddenly goes wonky and the label just won't print?

My all-time favorite, a software update and now the printer driver isn't connecting any more.

Oh yes, that and many other problems I had happen with some frequency during the first 5-8 years of selling, today I have 2 printers (one for labels, one for the SCAN sheet) and a backup sits in the closet.

Yes, new still in the box, just in case.  Because believe me this, a paper jam or some other sort of printer issue can chew up 1/2 hour to an hour of time pretty quick.

Last but not least, buyer returns the item...

This is one of the more difficult to track costs because you really kind of have to sell a certain amount to gather a good average cost... Like, how many parcels per 100 orders are returns, for example...

Once all that got factored in, with today's prices my lowest priced items are usually around $20.

And one might think that's insane, a profit of $13 ???
But it doesn't work out that way either, my profit on a $20 item is more like $5-$6...

Hopefully...

[memorymarielane]

Two things you need to know for yourself to answer the question.

1. What is cost (from start to finish) for that item?

2. What is your sell-through rate in your store?

If you can answer those two questions honestly then you already know the answer because it is going to be different for every single seller.

I am not opposed to the $1.00 profit items BUT if I am only selling between 1-10, maybe even 20 of those items a day (with no other sales higher than $1.00), then no it is not worth it to me to sell those items on Ebay. I would consider keeping them in the store but it would be time to see out higher profit margins to add to your offerings to buyers. Bottom feeder profits are good for Ebay stores as they keep traffic coming, but just think of the big box stores. They have items priced at a penny all the way up to thousands of dollars. Then you have dollar tree where everything is a dollar.

Which store do you want to be is the real question.

[gjs_16]

I forgot to mention...

I only sell about 1,000 items a year, so that would take a thousand years to sell one million items.

Believe it or not 1,000 a year is pretty busy, some might sell more but each one of those items has to be packed and mailed, do you plan on driving to your post office every day with arms full of packages?

I don't...

All mine go in the mailbox, I do actually have to drive to the Post Office about twice a year, on rare occasion the parcels won't fit or some other reason.  Don't forget, if you drive to the Post Office, that's a cost to be figured in as well, the IRS states that vehicle usage comes in at about 50 cents a mile, plus your time.

[froggyjump]

Item's I get for free or .15 cents (such as books, dvd's) it must be $5 an item profit. As someone said, this is extra $ so not a goal of sorts. My goal is $25 hr but i think I am closer to $22 an hr which is peanuts since i live in California. Finally realized I just enjoy doing this so won't stop.

[yuzuha]

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@m60driver wrote:

I usually seek to net a minimum $5 net profit per item.  As it only takes me about 10 minutes to list an item, that comes out to about $30 and hour. 

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This is how I figure things too, and why I don't bother with large/heavy/fragile items that take a lot of specialized packing. Just about everything I sell can be photographed, listed and packed in 10-15 minutes, so even if I'm only netting a few bucks on an item, it adds up overall in terms of how many items I can handle per hour.

[singular-source]

Cost of shipping, packaging difficulty, how many of the item do you have, is it new, what are the chances it will be returned...lots of factors come into play.  If you can stock and regularly sell an item that doesn't cost much to ship and make $5, heck yes it's worth it, disregarding tax garbage.

[1tuna]

thats not the way the brackets  work.besides most tax payers in the USA have an effective 15% tax rate

if you declare you made 100,00 then you need to knock that down to half with deductions

going a dollar over a bracket can only mean 1 more dollar in taxes.its not a big jump

it just looks that way on paper

[singular-source]

Negative feedback would be my last concern on $1 profit sales.

[this*old*attic]

Time is money 

MINIMUM $20 clear in my pocket PER HOUR

BUT I shoot for $60-80

[luckythewinner]

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I'd rather throw my item in the trash than to risk receiving negative feedback over a $5.00 item.

If that is the case, you have several items listed that you forgot to throw out! 😂

But seriously, the risk of negative feedback plays no role in my listing decisions whatever. If I sell 500 items and make $10,000 and get one negative, it really does not matter which item attracted the negative.

But when you add everything up, at what point is it not worth it to sell an item on eBay?

I never base a decision about listing an item on the amount of profit I am going to make. I always base that decision on the amount of profit I am going to make compared to the amount of work it takes to get that profit.

My best-selling item is an $8 item that I make $6.00 on after all expenses. It is absolutely worth it because I have 10,000 of them and I sell a dozen or more every week and it takes no effort whatsoever to pack and mail them.

[titipeo]

There are different types of sellers. For profit, business, etc, those are the ones that have worked their selling price to accommodate expenses and come ahead. Selling high value items also add the risk you take with scammers and INAD claims that will go against you. 

There are other sellers, the part-timers, who just sell to clear out stuff in their house, they just do it for the fun of it, keeps them active, happy. 

[dbfolks166mt]

     As a couple of others mentioned there are a number of reasons people sell on eBay for some money and/or profit is not the main driver. Some do it more for a hobby and to make a dollar here and there and clean out excess household items. Some do it as a business so profit is more important. 

     I never looked at a dollar amount as the determining factor with regards to a sale. If your COGS is $1.00 (aka what you have invested in it) and you sell if for $20 and without doing the precise math when all costs are factored in (fees, shipping, materials, etc) you wind up making $4 of your $1 investment that's is a ROI of 400%. 

     Conversely if your COGS is 200 and you sell the item for $300 and again without the precise math when all is said and done you make $50 off your $200 investment that's a 25% ROI. More money but lower ROI. 

     Historically the average return on the stock market has been 10%. If I am not exceeding 20% ROI on my eBay sales, after taxes, I would be better off from a financial perspective putting the investment dollars into the stock market or other investment securities. I guess it all depends on how you look at what you make selling on eBay and whether it's from a $ amount or an ROI perspective. If you are looking at it from how much you make an hour it all depends on what your time is worth to you. 

[kensgiftshop]

I think it depends on the seller?
Myself, due to health problems, I can't hold a regular job.
I have a little free time and 2 garages full of stuff that didn't cost me anything and it's just taking up space.
I figure if I can clear a few bucks and clean out the garages at the same time, it's worth it to me.

[paulhua3]

I sell many low-priced items at $1.00 profit because in most cases I have dozens to 100s of the item, list once and sell over and over, with minimal packing required, and most transactions include more than one item.