Do The Math

[namtrag1]

Lets say a seller wants to profit $10,000 per month.

conditions:

sale price of widget = $35

Cost of Widget = $25

_________________________

Gross Profit = $10

eBay fee per widget = $3.25

Paypal fee per widget = $1.32

Shipping Fee per widget = $4.00

__________________________________

Expense per each widget = $8.57

Gross Profit per widget  $10.00

- Expense per widget      $8.57

_____________________________________

Net Profit before taxes = $1.43 for each widget

So to make $10,000 profit per month you must sell 7000 widgets per month

to sell 7000 widgets per month you must stock about 14000 widgets.

14000 widgets x $25 = $350,000 of inventory.

So who has $350,000 to stock the warehouse ?

And who can sell 7000 widgets per month ?

This does not include the 30 day  Free returns that eBay wants us to do.

This does not take into account any employee wages either.

And what happens when eBay cathes a "cold" and does something majorly stupid that costs sellers dearly in lost sales ?

[zamo-zuan]

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@coolections wrote:

@zamo-zuan

Never said you have no credibility. Unfortunately for you your market share has collapsed. Partly due to aftermarket parts being sold cheaper than yours and also because the younger generation doesn'r work on cars as they once did. You are also competing against MAJOR automotive dealerships who buy directly from the manufacturers and sell their parts in their dealerships which consumers buy from not Ebay. You cannot expect the same results. It's like Ford and Chevy losing their market shares over the years. Trending US cars changed from US to foreign cars. Unfortunately for you, you have to accept the challenges and cannot expect to keep the same market share as in the past. Being a seller with a volume as yours you would think you would understand that.

---

Most of what you just said is plain & simply inaccurate.

The market, and activity in our category is UP, and not down. And the market share has not just dropped for us, but all of the top 10 sellers. 

To be more clear:

Market = up.

Total sales = up.

Money in those sales = up.

Top 10 seller prices = cheaper than the competition.

Top seller market share = down from 40% to 27% for the top 10 in this category.

As the title of this post says... "Do the math".

And finally, despite your claims of this being auto parts, this is affecting nearly every category I've looked at across eBay.

But, what do I know? You are the knowledgable professional who is up to date about how eBay, and the auto parts aftermarket works, and I am just a nobody making assumptions... right?

[kcdcpa]

---

@namtrag1 wrote:

Lets say a seller wants to profit $10,000 per month.

conditions:

sale price of widget = $35

Cost of Widget = $25

_________________________

Gross Profit = $10

eBay fee per widget = $3.25

Paypal fee per widget = $1.32

Shipping Fee per widget = $4.00 ..... = Free Shipping

__________________________________

Expense per each widget = $8.57

Gross Profit per widget  $10.00

- Expense per widget      $8.57

_____________________________________

Net Profit before taxes = $1.43 for each widget

So to make $10,000 profit per month you must sell 7000 widgets per month

to sell 7000 widgets per month you must stock about 14000 widgets.

14000 widgets x $25 = $350,000 of inventory.

So who has $350,000 to stock the warehouse ?

And who can sell 7000 widgets per month ?

This does not include the 30 day  Free returns that eBay wants us to do.

This does not take into account any employee wages either.

And what happens when eBay cathes a "cold" and does something majorly stupid that costs sellers dearly in lost sales ?

---

1 - Why in the world would you offer Free Shipping ( $4.00 Cost to you ) on an item that has a Gross Profit of $10 ?

2 - The general rule of thumb when BUYING is ..... if you can't sell an item for 2 times what you paid for it, then DON'T buy it !

Your math is correct ... but it is your business model that needs some serious re-thinking !

[ted_200]

Lets say a seller wants to profit $10,000 per month.

conditions:

sale price of widget = $35

Cost of Widget = $25

There is no math that is going to make that proposition work here.

[ted_200]

---

@bubbleman2010 wrote:

Most ebay sellers for hours spent if they live in a redemption state would be money ahead to just pick up cans along the highway....

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So long as you don't have to ship the cans, and pay 15% to the man, you're probably correct.

[everything-from-trinkets-to-treasures]

---

@namtrag1 wrote:

Lets say a seller wants to profit $10,000 per month.

conditions:

sale price of widget = $35

Cost of Widget = $25

_________________________

Gross Profit = $10

eBay fee per widget = $3.25

Paypal fee per widget = $1.32

Shipping Fee per widget = $4.00

__________________________________

Expense per each widget = $8.57

Gross Profit per widget  $10.00

- Expense per widget      $8.57

_____________________________________

Net Profit before taxes = $1.43 for each widget

So to make $10,000 profit per month you must sell 7000 widgets per month

to sell 7000 widgets per month you must stock about 14000 widgets.

14000 widgets x $25 = $350,000 of inventory.

So who has $350,000 to stock the warehouse ?

And who can sell 7000 widgets per month ?

This does not include the 30 day  Free returns that eBay wants us to do.

This does not take into account any employee wages either.

And what happens when eBay cathes a "cold" and does something majorly stupid that costs sellers dearly in lost sales ?

---

You also seemed to have left the buyers out of that equation as well.
Where is your data on how many buyers will buy that widget every month or that your widget is the best priced widget.
There are too many varibles you are not considering and that you cannot plan for

It is all fine and well to do the math but what you are trying to do just doesn't work

[everything-from-trinkets-to-treasures]

---

@everything-from-trinkets-to-treasures wrote:

---

@namtrag1 wrote:

Lets say a seller wants to profit $10,000 per month.

conditions:

sale price of widget = $35

Cost of Widget = $25

_________________________

Gross Profit = $10

eBay fee per widget = $3.25

Paypal fee per widget = $1.32

Shipping Fee per widget = $4.00

__________________________________

Expense per each widget = $8.57

Gross Profit per widget  $10.00

- Expense per widget      $8.57

_____________________________________

Net Profit before taxes = $1.43 for each widget

So to make $10,000 profit per month you must sell 7000 widgets per month

to sell 7000 widgets per month you must stock about 14000 widgets.

14000 widgets x $25 = $350,000 of inventory.

So who has $350,000 to stock the warehouse ?

And who can sell 7000 widgets per month ?

This does not include the 30 day  Free returns that eBay wants us to do.

This does not take into account any employee wages either.

And what happens when eBay cathes a "cold" and does something majorly stupid that costs sellers dearly in lost sales ?

---

You also seemed to have left the buyers out of that equation as well.
Where is your data on how many buyers will buy that widget every month or that your widget is the best priced widget.
There are too many varibles you are not considering and that you cannot plan for

It is all fine and well to do the math but what you are trying to do just doesn't work

---

And while it appears to be a way to slam ebay for something........just as you have to consider that there is an issue with ebay...a seller can have an issue and not be able to complete sales. People get sick, have accidents, inventory gets stolen or damaged, weather issues, fire issues etc etc (which has happened with all the stuff going on all over the country...people have even lost homes and have no way to work) There are a lot of things that can happen at any time to anyone.

[southern*sweet*tea]

Well...I would never want to sell $10k/mo, $10k/year would be nice. (I have low aspirations)

You make money when you BUY, not when you SELL.

I'm a one woman show, I do it all, I would never have employees when I could do it myself better.

"Free shipping" is generally a sales killer in my category, but I do play around with it sometimes.

Free returns is fine because I don't get them.

I like my way better.

This is for this account, my other two would look a little different with an average price of $5 doing FS using a plain stamped envelope and a micropayments account.

sale price of widget = $10

Cost of Widget = $0
_________________________
Gross Profit = $10

eBay fee per widget = $1.26

Paypal fee per widget = $0.79

Shipping Fee per widget = 0 (buyer pays $2.66)

__________________________________

Expense per each widget = $2.05

 
Gross Profit per widget  $10.00

- Expense per widget      $2.05

_____________________________________

Net Profit before taxes = $7.95 for each widget

I think my math is right. I'll never get rich, but I always get paid and the money I make I keep. If I had the time and desire I could make a lot more, but I like where I am now.

Someone with a lot of time on their hands and some math skills can figure out what I'd have to do to make 10k/mo lol

[namtrag1]

Must be nice to get your inventory for free.  How do you get your cost of a widget to be ZERO?

I hope your not suggesting that you acquire your widgets unethically.

[southern*sweet*tea]

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@namtrag1 wrote:

Must be nice to get your inventory for free.  How do you get your cost of a widget to be ZERO?

I hope your not suggesting that you acquire your widgets unethically.

---

People give me boxes of books and booklets because they know I collect them. If they don't give them to me, they donate the books and throw away the booklets.  I keep the ones I want and sell the rest.  Nothing unethical about that.

[wamegun]

Oh my! All those books!! I would be torn to list if there were some good reads given to me! Like I need help chasing rabbits as it is!

Sorry for the edits. I am on my phone.

[lja440]

Do the math BEFORE you buy your inventory!

I NEVER buy anything for resale unless there is at minimum 30% profit (check the trending prices) after I'm all in with purchase price and all fees I will need to pay.

For example: I went to a auction Friday. I purchased 5 boxes of record albums for $340+ tax. I have priced one and a half of these and my inventory is at $569. And I haven't even hit the Beatles and other higher value albums I spotted in the lot yet. 

At the same auction there were Beatles collector plates that I started bidding on but I dropped out at $15 each as they are trending t around $25-$30. Same with the stereo equipment when it got too close to the trending prices. 

Yes math is your friend, and so is common sense. 

[lja440]

Another thing is since I do have a B&M I consider my rent and commission as part of my "fees" just like paying eBay fees. 

My "warehouse" is a spare bedroom (minus a bed) that is nearly wall to wall records. At the B&M I have a large room with approx with around 10,000+ albums plus the same in 45's and some 78's. I also have stereo equipment, original art and pop art pieces and record storage items. 

Even with all this if I would even once clear $10,000 in a month they would have to call the EMT's (luckily station is directly in back of the shop) to revive me.

[dcintennessee]

I mean, seriously, @kcdcpa! The most basic of all product sales models is to price at a minimum of double your cost. I appreciate that @namtrag1 points out the importance that (potential) sellers do the math. Which has to include that shipping is NOT a straight pass-through expense, when you pay FVF on shipping. 

[lasantino]

for me,  I couldn't possibly stay in business if i had the profit margins the OP described.. I try and sell my items at least 5X what i paid for them.. after i pay shipping(which i include in the price), ebay fees, paypal fees, and factor in the returns, where i am out the original shipping,, plus my fixed warehouse costs.,, i actually net only 2 or 3 times what i paid.. 

remember, not every item a seller lists is going to sell right away.. (within 30 days).. so the cost to aquire that item is also a cost of doing business.. 

now if I was absolutely certain i could sell ever item i purchased within 30 days,, i would be able to charge a lower markup... but its kind of impossible to be absolutely certain about anything.. especially with ebay constantly changing the search results and thus buyers can't even find the items they are looking for..

[lja440]

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@southern*sweet*tea wrote:

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@namtrag1 wrote:

Must be nice to get your inventory for free.  How do you get your cost of a widget to be ZERO?

I hope your not suggesting that you acquire your widgets unethically.

---

People give me boxes of books and booklets because they know I collect them. If they don't give them to me, they donate the books and throw away the booklets.  I keep the ones I want and sell the rest.  Nothing unethical about that.

---

Exactly, I started out when things were very tight. I would go to auctions with like $10 and buy a box lot with something I though would bring some cash. People would often cherry pick through their lots and leave the rest anouncing that it was free for the taking. I once found 3 Warther knives in a box where that lady who bought it only wanted the few red handled pieces in the box. I also found about 4 or 5 nice secialty pieces like cherry pitters and advertizing church keys. I think I made over $100 on that free box.