eBay

back-spin · ‎08-06-2019

What would you say are some of the main reasons eBay businesses fail? You can break them down into top 10 if you want.

I think this type of info can help people to learn what to avoid doing.

penguins_dont_fly · ‎08-07-2019

@bigdeals.etc wrote:
@lightlily_arts wrote:
Shipping costs are an important part of your sale. I see a lot of sellers stating that they charge exact shipping only. That would be fine if they added that unpaid amount in to the price of their item. What that means is that eBay charges you a 10% fee on your shipping charge and if you use PayPal as your payment method they charge 2.9% + 30 cents for each transaction. So that means you are being charged approximately 13% of the shipping portion of your sale. You need to build that expense somewhere into your listing.
Yup. I always figure an estimate of 87% after fees at least. That doesn't even include possible insertion fee costs, promotioned listings cost, eBay store cost.

Absolutely.

Knowing your costs is essential business 101.

I operate at a 40% GPM.

I think that too many new sellers don't take all of their expenses into account. Shipping is a big hit ... but COGS is often overlooked by new sellers. They buy an Item for $10, sell it at $15 with actual shipping and wonder why they aren't making any money 😞

penguins_dont_fly is a Volunteer Community Mentor
Buying and Selling since 2013

luckythewinner · ‎08-07-2019

1) Lack of common sense

2) Lack of basic business sense

3) Lack of basic math skills

4) No business plan

5) Poor business plan

6) Not understanding the marketplace

7) Not buying the right inventory

😎 Paying too much for inventory

9) Misplaced priorities (ex. time spent on fancy listing templates vs. time spent searching out inventory)

10) Inefficiency

One small example of "efficiency":

I ship LPs and books with stiffeners to prevent bending. I have recycled cardboard stiffeners that are heavier and free, and foam core stiffeners that are lighter and cost about 25 cents each.

If a media mail package is close to 1 pound, paying 25 cents for a foam core stiffener instead of using a free cardboard stiffener can keep it under one pound, and save me 27 cents per package in shipping costs.

lasantino · ‎08-07-2019

I have one thing that I wish I would have done from the beginning.

Create an inventory system... !!!..

I didn't start out thinking I would do this full time. I just listed a couple things and they sold !.. slowly but surely I started listing more and buying more.. and not until it was too late.. did I realize i needed an inventory system!

There are tons of options available, depending on if you sell one of a kind items or if you sell items that you have multiples of..

I ended up doing this, which works very well for me..

sometimes I take pictures.. I always upload those onto the computer and create a file with that days' date..

on my spreadsheet, I have have a sheet for each major category I sell in,,

each of those sheets has the item, brand, size, name, brief description,,, and THIS IS KEY,, the date the pictures were taken(which corresponds to the folder on my computer) and then a column for LOCATION.... this way,, its not a matter of having all like things in one area,, it's just making sure I have the location of the item as a column in my worksheet..

anyway,, there are many more advanced options,, But this is what works for me..

my inventory system is mainly to know what i've taken pictures of , where are those pictures and where is the item..

I wish i had it all integrated with cost and sold etc.. ,, there are many sellers who have very robust inventory systems that inegrate with their accounting software...

lasantino · ‎08-07-2019

selling something for double what you paid for it is not a business!!

You must factor in all of the fixed costs. plus your salary plus savings plus insurance plus taxes...

i.e. I always aim to make at least 4 to 5 times what i purchased something for..

also..and this is just my opinion.. if you sell one of a kind items.. have a minimum price you will even bother with..

I mean,, even i could buy something for a dollar,, it's not worth my time if i can only sell it for 10 or 15 dollars.. i have to spend the same amount of time on each listing.. so I try and only purchase things I can resell for a higher price point..

some sellers are very successful selling widgets,, and they may buy something for a dollar and sell it for 10 or 15 and make a ton of money, because they only have to make one listing!... that's a different business model.. I'm don't operate in that business model. my advise pertains to selling one item at a time..

dhbookds · ‎08-07-2019

Personally, I don't think any of us have the information available to be able to answer the question......... We read these boards, but that is definitely biased and inaccurate. Plenty of people state they are leaving ebay because of this or that..... Many of those are venting and don't leave...... We never hear from those who leave but never post.....and we have no idea of the number that stay.

And what is failure?......is it "leaving ebay", yet maintaining a selling presence elsewhere failure or a smart business move? Is deciding "I don't like doing this so I'm leaving (pick a reason), a failure?....to me it's not. Is someone who has sold here 15 years and deciding to leave a failure? Is not selling, $100, $500, or $5000 a month failure? Everyone will have a different desire/need on that.

And what is the definition of a business? People who only use the 50 free listings? Is their "failure" truly a business failure? And is there any guarantee by Ebay or any on line site/flea market/consignment shop of anything?

just my thoughts......

uncseniorsportsfan · ‎08-07-2019

Just as eBay is not a one-size-fits-all marketplace - there is not a one-size-fits-all answer.

Basically businesses fail in any environment because costs are too high and revenue is not sufficient to cover the costs and provide a living. Having had a brick and mortar store before selling on eBay, I was far more in control of my B&M business than I have ever been on eBay, and for the past five years I seem to be less in control with each policy change eBay makes.

For the average small seller on eBay - the risk has been increasing through the years, while the reward has not. The only reason I still make money on eBay is because I have so few green dollars tied up in inventory - I could probably have a three day yard sale and recoup my inventory investment and donate what's left to charity.

Sure there are those that can make a living selling on eBay, but I doubt many of them depend solely on eBay any more. And as Heid Klum likes to say "One day you're in, and one day you're out" - there is no gaurantee that success on eBay today will continue indefinitely especially when eBay continues to make changes that benefit their investors more than their sellers.

JMHO

the*dog*ate*my*tablecloth · ‎08-07-2019

Businesses also fail because of seller attitudes. The biggest is a dislike of customers and the inability to deal with people. You can see in their listings that they just hate everyone and spend 90% of their listing ranting about things and making demands.

Second to me would be the cost and ease of shipping. If you buy a bunch of inventory for cheap but they're a bear to ship, it's not going to be a great experience.

Third would be organization. If you can't find things after you sell them and cannot file complete tax returns you will not be around long.

luckythewinner · ‎08-07-2019

And what is failure

The OP asked for opinions about why eBay businesses fail. To me, your opinion of the definition of failure is part of the question.

And what is the definition of a business?

The OP asked for opinions about why eBay businesses fail. To me, your opinion of the definition of business is part of the question.

flo_mingo · ‎08-07-2019

@greg5000 wrote:
@back-spin wrote:
What would you say are some of the main reasons eBay businesses fail? You can break them down into top 10 if you want.

I think this type of info can help people to learn what to avoid doing.
I think the Number 1 Reason is eBay.

They are not listening to their Customers.

That's my answer too.Number 1 Reason is eBay.

I have been here since 2003, Kept up with updates and new policies. Listened to eBay radio learned the best practices for product , pictures, listing, and shipping. I offer great customer service. I am doing everything right. eBay is doing everything wrong, Mandated GTC, HATE IT, Search matrix doesn't work, eBay advertises chinese junk in my store listing that I pay for. It easier to find an item with a google search rather than searching on eBay. Podcasts are now a joke. eBay executives "dropping in" to tell us what a great job they are doing, if you don't like policies it is because you are a dinosaur, " yard sale" seller and they would like all of the OOAK sellers to leave .... and we are.

soh.maryl · ‎08-07-2019

When I look at questions on this and other boards from both sellers and buyers, I have come to the conclusion that one of the reasons for seller failure is that many sellers do not read the Seller Information Center, screw up and then don't know what to do.

Example: Sellers who have no idea what to do if/when a buyer does not pay, so they wait too long to open a case. This is the main one I think.

Sellers put "no returns" in their listings and then are pretty upset that the MBG trumps that message.

Also new sellers who appear distressed that they cannot just start out with listing a hundred items.

The way this effects eBay is that many of these sellers, I believe, then become discouraged and leave.

Sometimes they think eBay is too complicated.

1tuna · ‎08-07-2019

its not easy to come up with reasons but I have a few ideas how to make a good living

try to sell 60 items a week for a $20 profit on each ,that could be a start

you can not make a living discovering things, you need to pay for them

you can buy roseville for $10 and sell it for 100, yippee............what a great find ,but you really needed to buy 10 pieces for 100 and sell for 1000,............................oh yeah,make sure you do that next week also

that is not going to happen.

I list 60 items a week and have trouble getting my inventory above 200 pieces,I want to sell my inventory so I can get more.

my inventory costs me plenty,if you do not have the tools of the trade to get more you will be dwindling down,

the tools of the trade are stacks of $100 dollar bills

another way too look at this,if you can not buy or sell 60 pieces a week is too play the margins

I like to think of it as spending ,not buying,yeah I know,its the same thing

just try spending 2-3000 a week and selling for 3-4000,it can be done

one other thing,try easy to pack items

use ebay shipping,its simple I normally can pack 18 items an hour,I do not spend much time shipping

international shipping is easy it should not slow you down even 40 seconds over domestic

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southern*sweet*tea · ‎08-07-2019

Lots and lots of good answers upthread. Here's my big three:

Thinking that this is YOUR business. It's not - it's Ebay's business, and you're just a supplier. If you want your OWN business you have to run your own website where you are in control. This applies to any third party selling venue (Amazon, Etsy, etc).
Thinking it's still 1999 - No, I'm sorry but buyers don't have to purchase insurance separately, or contact you to bid if they have less than X amount of feedback, or just eat the loss if the Post Office loses/damages the item. I see lots and lots of sellers stuck in the past, where it was my way or the highway. Things have changed. Get with it or get out.
Getting too big too quickly, buying inventory on credit and not realizing that things change in an instant online. What was great last month might be garbage this month. If you're stuck with a warehouse full of last month's hot item that's not moving anymore, well then you have a problem, especially if you bought your inventory on credit. If you're not selling it now, how are you going to pay for it later?

The easier you are to offend the easier you are to control.

We seem to be getting closer and closer to a situation where nobody is responsible for what they did but we are all responsible for what somebody else did. - Thomas Sowell

threshold.sales.group · ‎08-07-2019

A couple thoughts -

1. Not understanding the relationship between unit sales and gross margin (lower unit sale / turn items always require high gross margins).

2. Not understanding the difference between long tail inventory and no tail inventory. There is no such thing as a great "deal" on inventory with no real demand.

3. Not realizing that *time* is finite asset and the most valuable asset a business has -

4. Not moving quickly past mistakes. It's good to learn from mistakes, but ruminating over them is deadly for any business or person.

5. Many businesses are created on structurally unsound assumptions or practices from the start. Doable at small scale but once they begin to grow the real roadblocks appear.

6. The market determines the real price for any item.