eBay

steezy410 · ‎09-03-2018

Hello Everyone,

I've been ramping up to start listing on eBay again and wanted to ensure I have all bases covered in regards to fees. Someone in my seller group recommended I use a 3rd party eBay fee calculator to estimate my profitability and I wanted to see if there's anything else I should be considering outside of this calculator?

I'm selling apparel so I chose the "Standard" category. It also says that PayPal is factored into this, so it looks like just about everything is covered. Anything I'm missing?

Thank you!

orangehound · ‎09-04-2018

@steezy410 wrote:

I'm selling apparel so I chose the "Standard" category. It also says that PayPal is factored into this, so it looks like just about everything is covered. Anything I'm missing?

Thank you!

I'm going to take what everyone wrote and give you an example:

Purchased item for $10 ... sales price of $40.

Acquisition cost: $10
eBay fees, 10% assuming no store or TRS+: $4
PayPal fees, 2.9% + 30cents: $1.46
Shipping Cost (this is an average): $5.50
Supplies (e.g., packing material, labels, tape, etc) ... this is my per-item average: $0.40
Shrinkage (returns, defects, loss, etc) run about 1%: $0.40
Business expenses (mileage, warehousing, stores, etc), run about 2%: $0.80
Self employment taxes on the $16.11 (.9235 of net from above) are 15.3%: $2.67
State and local income taxes on $17.44 (net from above) ... let's say 12%: $2.09

So, in this example, your net income from the $40 sale is $12.68.

It can take about an hour of time to process a single item for sale (acquire, prep, photo, pack, ship, customer service, etc.), so hopefully this can let you know why you would be making below minimum wage for selling single-quantity items under about $30 on eBay.

keziak · ‎09-04-2018

My son is probably going to get a minimum wage job because he has no work experience, and he will probably make more per hour than I do. This bites, but I still value working for myself and setting my own hours. Also it depends on how I calculate my extensive volunteering. It's community service but also a place where I get inventory to sell. So I waffle on whether to count those hours and to and fro as part of my calculations on hourly wages.

femmefan1946 · ‎09-04-2018

@ted_200

I still can't wrap my head around "shipping is always paid by the buyer"...

Because if the seller is making any money at all, it comes from the buyer.

If he isn't it's coming from his own pocket and he is going broke.

When the buyer pays, the seller is taking some of the payment to cover the cost of shipping.

So the buyer is paying for the shipping, the seller is just handling the money.

newview · ‎09-04-2018

@18704d wrote:

" If you sell enough you could justify using Quickbooks, but that runs a few hundred dollars a year, ..."
----------

There are comparable free alternatives, such as Open Office.

Lynn

... and my personal favorite LibreOffice

I'm ̶p̶r̶e̶t̶t̶y̶ ̶s̶u̶r̶e̶ certain the lunatics have taken over the asylum.

itsjustasprain · ‎09-04-2018

@castlemagicmemories wrote:
Whether you are selling used or new clothing, that is a very over saturated category, which means lots of competition. Profitability is important, but if your prices are higher than most others, sales will be stymied.

I dont think anyone is emphsizing that enough. When i hear or read about someone who wants to get into Ebay selling clothing - I cringe. There arent a whole lot of other categories that are more swamped than clothing - especially used. I would take a hard look at how other listings for your clothing are doing. How many are there. How many actually SOLD. How much did the sellers get. Ect.

Its great to set yourself up ahead of time with the tools you should have to work out what your costs will be - Ect. The tricky part is its easy to work up a sense of entitlement - my stuff HAS to sell because look at all this research i put into it! But then you upload it and it just sits there - or no one looks at it - or you just get lowball offers on your good stuff. So as part of your research before you go putting money into this - take a long look at the others who are selling the same things as you and see how much is actually selling and figure out how YOU will be able to get THEIR buyers away from them. Good luck.

mr_lincoln · ‎09-04-2018

@steezy410 wrote: " ... Anything I'm missing?"

1. eBay Fees

2. PayPal Fees

3. Inventory cost

4. Inventory value - year end for taxes

5. State Sales tax ID if required

6. State sales tax reporting

7. Packaging material costs

8. Download a Schedule C from irs.gov to get a feel for what you will need to file annual taxes, what you can deduct (mileage driven, packaging material, ink for printer, printer paper, etc.)

9. Notebook for vehicle odometer readings (tax purposes) - keep track of your driving

10. Oh ... did I mention putting a profit value on each item?????

Regards,
Mr. Lincoln - Community Mentor

ted_200 · ‎09-04-2018

@femmefan1946 wrote:
@ted_200
I still can't wrap my head around "shipping is always paid by the buyer"...

Because if the seller is making any money at all, it comes from the buyer.
If he isn't it's coming from his own pocket and he is going broke.
When the buyer pays, the seller is taking some of the payment to cover the cost of shipping.
So the buyer is paying for the shipping, the seller is just handling the money.

I understand the philosophy... just not the math.

And I'm not even 100% sure about the philosophy either... eBay says the shipping service is MY vendor, and if they're unsatisfactory in some way (like they didn't meet a delivery date they never guaranteed to begin with) that's MY fault, and I should find a different shipping vendor. That still sounds like I'm paying to me, and I have the USPS payment receipts in my PayPal account to prove it.

Nevertheless, if I can find a way to ship cheaper, I'm going to make more profit (Auction) or sell more items (Fixed Price). I could certainly ask the buyer to pay $50 to ship a 2 Oz. item to Des Moines, but I don't think I'd sell much.

The Floggings Will Continue Until Morale Improves.

steezy410 · ‎09-06-2018

Thank you, I appreciate the feedback! Thankfully I have my own brand that has done well in the past 🙂

equid0x · ‎09-06-2018

I keep a rather extensive set of spreadsheets but on the main one I track the following columns:

Description Item # List Date Sale Date Purchase Price Total Sale Listing Type Free Shipping Handling Packaging Ship Total Price – Ship PayPal Fee Ebay Insertion Fee Ebay Final Value Fee Self Ins. Returns Total Fees Gross Profit Net Profit Margin Price Orig Price 15 Day Price 30 Day Price 45 Day Price 60 Day Price 75 Day Price 90 Day

Now, there is actually more than this involved and in that blank column I am adding in multiple other costs based on a percentage over the past year's sales that is comprised of other selling costs not explicity stated. I also track a number of other metrics such as how much I pay per shipping carrier just because I'd like to know.

I also run a yearly/monthly statement and a statement of costs broken down by cost category with corresponding graphs, etc to illustrate where I am now and figure out where I'd like to be going.

I take this things and compare them to the changes to my strategy that I have made in prior months/years to determine whether the changes made increased or decreased profits and by how much.

Now, nobody here is going to give you their complete business plan but I think what I have there is a good start on the things you ought to be looking at to run a profitable business here.

I am totally open to others chiming in with anything they think I am missing. Always looking to hone the business plan a bit better.

One piece of advice I would give you in a business like this is not to lose sight of losses on small dollar values, as that given sufficient volume, those can add up quite heavily over the course of a year.

thingsoldandnew10 · ‎09-07-2018

Are you aware of the markup formula used by almost every retail chain?

If not, its Selling price - Cost / Selling Price. For example, if you buy an item for $.50 and sell for $1.00 the Markup would be 50% ($1.00 - $.50 / $1.00). For simplicity call that the gross markup. To find the net markup ( the markup sfter e$bay fees and paypal fees) just add in those amounts into cost.

When we sell we look for a gross markup of between 55 to 65%or higher. The two exceptions are "loss leaders" and "clearance items." For loss leaders we add all the transactions together and compute the markup. It's important to recognize that loss leaders low price root reason is to entice buyers in to purchase the one item and then add items to their purchase. Generally we find one in three buyers will not only buy the loss leader item but will also buy other similiar items or accessories in addition to the loss leader item. Clearance items are priced to clear inventory without a major loss.

As a FYI : We developed a spread sheet where we enter the item cost and the Markup is computed at differnt selling prices.

Hope that helps!

@steezy410 wrote:
Hello Everyone,

I've been ramping up to start listing on eBay again and wanted to ensure I have all bases covered in regards to fees. Someone in my seller group recommended I use a 3rd party eBay fee calculator to estimate my profitability and I wanted to see if there's anything else I should be considering outside of this calculator?

I'm selling apparel so I chose the "Standard" category. It also says that PayPal is factored into this, so it looks like just about everything is covered. Anything I'm missing?

Thank you!