Can anyone explain this?

[danslay-0]

I see a lot of items here in the United States on Ebay for sale with free shipping and they are priced below what it would cost to ship the item.  Most lightweight items sent USPS 1st class are at least $3 to ship.  I am no expert at math but if a seller is charging between $1-$5 with free shipping and items cost at least $3 to ship, add Ebay fees and the cost of the item to begin with.......then.... wouldn't they be continuously losing money with each sale?? How are they making a profit?  How are they staying in business? What am I missing here? 

[evry1nositswindy]

You are probably looking at items from sellers in China. They have deeply discounted postal rates and don't have to follow the same rules as the rest of us.  Steer clear.

[frodobagginskennedy]

Some people do it as a loss leader.  Hoping to lure people into their stores HOPING they will purchase multiple items.  Kinda like some stores do on milk in brick & Mortor stores.

Some people do it because they cannot do simple math.

[soh.maryl]

Could be new sellers who have no idea of what they are doing?

Anyway, don't waste your time being concerned about other sellers' business plans.  You are doing very well. Just continue along your chosen path.  

[dhbookds]

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@soh.maryl wrote:

Could be new sellers who have no idea of what they are doing?

Anyway, don't waste your time being concerned about other sellers' business plans.  You are doing very well. Just continue along your chosen path.  

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Agree with this...........tho I would note that ebay offers cut rate shipping on Sports Cards.........and other outside postage sellers offer cheaper rates.....such as Pirate ship (at least on priority for small, heavy items.

[luckythewinner · Accepted solution]

What am I missing here?

You are assuming they are in the United States. 

You are assuming they pay for tracking. 

You are assuming they pay for shipping. 

You are assuming they pay for their merchandise. 

You are assuming they make a profit on these items. 

All that aside ..

There is almost no barrier to entry to become an eBay seller. 

If you start a restaurant, you need a lease, a loan, a business plan, insurance, licensing, inspection, lines of credit, and a decent chef. 

To sell on eBay, you need a computer and a pulse. 

[dirk12955]

Tagging on:

A Plain white #10 envelope can be mailed for 55 cents

Forever stamps can be purchased on ebay for about 40 cents.

Stamps and sportcards can be mailed with tracking for 51 cents 1oz    71 cents 2oz using ebay labels

Lucky is right about the profit question.     I can mail a stamp for $2.99 with "Free" shipping and make a profit 

if I didn't pay anything for the stamp.    

My profits are earned at the time of me making a  purchase,    Not at the time of me making a sale.   

[m60driver]

Sometimes you just have to follow the first rule of retail and take your first loss.  And sometimes you just goof when it comes to shipping.  This happened to me this morning when something sold to a location across the country and by the time I added shipping and fees I was lucky to just break even.  Actually they were fragile breakable items that required additional packaging in the slim hope of arriving unbroken

And if someone can please tell me where to purchase forever stamps on Ebay for 40 cents.

[dirk12955]

All over ebay.    I bought 500 for $205.00 including shipping on May 28th

There's been some scammers running these at $28.00 per 100 or less.    Avoid those listings 

 and stick with the $38.00 to $42.00 sellers.     Look at their feedback and see who 

has been selling all along.    Avoid the sellers who just started selling recently.

Ebay is loaded with honest sellers offering discount postage.   

[postingid7659]

I bought a few of an item and posted to eBay then looked at my competition and found a guy who could only be making maybe a quarter each on items that retailed for $22.  Now he sold a couple hundred of them, but all the effort spent to pack and ship is a lot of work to come out ahead $50 on them.  

[inhawaii]

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@luckythewinner wrote:

To sell on eBay, you need a computer and a pulse. 

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 Thankfully i meet the minimum requirements.  😉

[inhawaii]

Someone posted here  few weeks ago how they found hundreds, if not thousands of listings for $1 with free shipping and just like you was asking, how do they do it. How are they making any money?

The answer is, they're not making money.  In a cases like this i think the buyers are just plain ignorant. They have failed to sit down and figure out what their cost/expenses/profit margins are.

Many people selling on ebay (even some experienced sellers) have no clue what it costs and what ebay charges. 

[pikabo-icu]

It's possible they are taking a loss to pump up their feedback due to dings.

I've also seen new sellers do this to build up a base of selling FB.

Some with honest & good intentions, other to build a good rep and then start selling over priced garbage or fakes.

Maybe they have a house full of doo-dads and just want the stuff gone. 

It's difficult to say why people do what they do..

[inhawaii]

One more thing.  Sometimes i'll check out my competition and see that i'm being undercut by some sellers. These sellers are usually not around for long.  They're gone in a few weeks or a few months. I've been here for 22 years.   Good luck!

[danslay-0]

I really appreciate all of you who took time to write back with input, it makes more sense now, thank you so much!!

Indeed I assumed too much, lol.  

That last line should be printed on a T-Shirt. **To sell on Ebay, you need a computer and a pulse**

(Can I have your permission luckythewinner to use it to sell T-Shirts here on Ebay? JK 😉 )

I have checked into a few of these sellers and they "appear" to be in the US. Most of the items would weigh out to about 6 Ounces or less so I suppose they could just stamp them? I'd never heard of tracking stamped packages prior to reading one of the comments above. It is also possible that they are using cheap items to boost feedback scores, several also sell much higher priced and heavier items in their stores. 

@soh.maryl I got curious when I was checking comps on some small items I thought about selling in my own store. I did the math and rightly figured that the profits were not there. Thanks for what you said, I am going to focus on what really matters, my own business plan 😄