Net Profit? what net profit?

[jeeplvr2000]

Ebay sellers would benefit greatly if they itemized every cost associated with their sales. I just did it right down to the last penny and was sickened by what ebay is charging sellers per sale. With taxes, insertion fees, seller fees, and shipping, profit margins on ebay are nearly worse than just giving the item away. I honestly don't know how some people sell items for under 20.00 unless they're getting them for free. My seller fees with shipping on just one of my items is substantially more than the build cost of the item. My choice is to raise my price and sell nothing. Am I missing some ebay selling secret here?

[vintagecraze50]

Yes, That’s a good plan. Over the years we have consistently had to raise prices to accommodate all kinds of issues, like cost of our goods going through the roof, and most recently our decision to offer Fed Ex Express shipping for greater visibilty and extremely fast delivery. We had to change from USPS Priority Mail prior to the big Pandemic goof up with all the INR cases rolling in and lost merchandise and even tough we had to pend a lot more for Fed EX at that time we just adjusted the prices across the board to compensate.

[oldcoin007]

Hi - I buy something, hold on to it for a while, then sell it for a loss on ebay. You have to consider selling on ebay as a recreational thing & not as a profit thing. 

[m60driver]

There is no Ebay secret here, retail net margins have always been rather low.  The items I sell for under $20 usually cost me $2 or less. My modest goal, only trying to make lunch money and not trying to male a living,  is to net a minimum of $5, enough for a healthy salad at Trader Joe's. 

It is awkward to compare, but the gross profit margins of goods sold at my old brick and mortar store averaged about 40%, that means the sell price of a widget was 60% the cost of the widget (buy a widget for $6 and sell for $10.).  The gross profit margins at Costco are around 15% as Costco sells at a break even price as their profits come from membership fees;  similar to Amazon using Prime fees as their profit generator.   Walmart actually has relatively high margins as they squeeze the bejesus out of their vendors.  So yea, retail is brutal, online retail more so.  You need a certain combination of high margins and high volume to succeed.

[oldcoin007]

Hi lucky - Problem is, if too many people figured all those costs they may not sell on ebay at all. 

[reallynicestamps]

I honestly don't know how some people sell items for under 20.00 unless they're getting them for free.

Certainly for cheap.

I buy most of my "thrifted" items (a different ID) for between 25c and $2.

Canadian-- so really about 20c to $1.60 US.

I sell in US dollars which are about $1.20 Cdn at the moment.

Last year the Canadian dollar was even lower - between 70c and 75c US, but you economy has improved in the last six months or so.

Even counting in my wage at the BC minimum of 25c a minute, I'm doing well.

I can even afford to use Free Shipping to Canada and the USA, although Canada Post rates are higher than USPS.

I'm a little confused about putting internet (state) sales taxes into the equation, because this is just a passthrough on invoices, paid by the buyer not the seller. We do pay eBay fees on the entire customer payment which includes that tax.  That has been Standard Practice for decades- we paid our merchant credit card fees on provincial and federal sales taxes since we opened our B&M shop in 1978.

Over the decades I've been selling here, I used 20% of customer payment as the rule of thumb for selling fees. Almost always it is slightly lower.

There is a not very useful pie chart showing this on the Performance page of the Seller Hub.

[lepke1979]

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@luckythewinner wrote:

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@lepke1979 wrote:

It gets a little hinky I guess because sales tax is variable. But can either give a dummy rate or just say it excludes sales tax.

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It also gets "hinky" because of category, store subscription level, promoted lsiting percentage, which shipping option is selected, whtehr there are international fees, whether there is sales tax,  whther you have penalty fees, what your seller rating is, and probably a half dozen other factors that influence fees. 

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Most of which can be garnered via the listing details and current user level. Regardless, I'm thinking of it as more of a quick and rough number. Doesn't need to be exact.

[inhawaii]

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@jeeplvr2000 wrote:

 Am I missing some ebay selling secret here?

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Yes you are missing something.  You are supposed to figure out all your costs BEFORE you list an item. You should know exactly what you net profit will be  BEFORE you list an item. 

If you are not making enough profit:

A)  Buy it cheaper.

B)  Raise your price.

C)  Don't sell it. 

[luckythewinner]

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@oldcoin007 wrote:

Hi lucky - Problem is, if too many people figured all those costs they may not sell on ebay at all. 

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Most of those costs are optional or based on factors eBay cannot know up front. 

But god forbid if eBay tried to give a seller an estimate of fees and it was not exact - a whole bunch of sellers with their panties all in a bunch would come here whining about how terrible eBay is. 

But all that aside ... 

The biggest variable in calculating profitability is the item cost, and eBay does not know that.

So IMHO seller need to put on their big-boy britches and run their own business, and not expect eBay to spoon-feed them information they should already have. 

[oldcoin007]

Sold my big boy pants on ebay. Customer complained & got a refund & kept the pants. lol  Just kidding. 

[jeeplvr2000]

If you have a store at 4.95+ per month. Its cheaper for me to pay insertion fees. There is no "free" on ebay.

[tdebuys]

Yep but not many people know where or how to buy an item that only costs $2 that the public will pay $18 to buy.  900% mark-ups are not very common on items that will sell in a volume.

[nuclearomen]

You must adjust prices to figure in all your costs i.e cost to obtain items, cost for ALL shipping supplies (this includes shipping labels, printer ink etc...), cost of selling on Ebay (Fee's), Taxes, and Profit. 
With that said, there are times I will sell things and lose on the Profit Margin, but I do this knowingly, it's done when I need to clear some things out and/or the value on said items are not what they were prior (happens with everything). But usually still make a "profit" even it's $1.50 after fees etc... 

[jeeplvr2000]

What's your point? 

[jeeplvr2000]

My items cost more than that to make. Ebay is getting rich off seller fees and I am barely making a profit because of those fees. 

[m60driver]

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@jeeplvr2000 wrote:

My items cost more than that to make. Ebay is getting rich off seller fees and I am barely making a profit because of those fees. 

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And you would make even less profit if there was no such large selling platform.  The Ebay selling fees have only risen fractionally over the years.  If you have such a hot item then why not create your own webpage and sell direct?  The advertising costs on FB are really quite low compared to traditional advertising like radio, newspapers, or TV.  When I had my store's going out of business sale I spent about $4k on cable TV advertising which got no results that I could discern.  Whereas my FB ads, which cost about $300 were astonishing successful leading to a great sale.  Ebay fees of around 15% are just not that onerous.