Not making any money.

[pistachio.enterprises]

We've been selling for a month now, and despite heavy sales we're not making any money. We need some advice; we're about to stop using eBay altogether. 

$14,766.49 (total sales)

-       816.26 (taxes)

- 3, 289.67 (eBay fees *)

- 1,550.20  (shipping labels)

------------------------------

$9,110.36 (net sales)

THAT'S ABSURD! THAT'S ONLY 62% PROFITABILITY! WHY IS EBAY TAKING 38% DESPITE US SUPPLYING THE PRODUCTS, DOING ALL OF THE WORK, AND HAVING ALL OF THE RISKS? BY COMPARISON, AMAZON (FBA) TYPICALLY COSTS SELLERS 33% BUT THEY DO EVERYTHING FOR YOU!! MOREOVER, WITHOUT USING PROMOTIONS, NOTHING SEEMS TO SALE DESPITE BEATING EVERYONE'S PRICES ON THE SAME ITEMS!

* eBay fees include $2,163.50 (final value fees) and $1,272.52 (ad fees).

[richard1rst]

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@inhawaii wrote:

You must be special.

I only pay 13.25% in fees.

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( re Animal Farm) We are all equal, it's just that some of us are more equal than others. I only pay 11.12%

[lux.ra_14]

Maybe you answered your own question: Stick with Amazon if it works better for you.

[mr_lincoln]

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@pistachio.enterprises wrote:

Margins are more than sufficient. Prior to 2022 we were doing 1.6 million on Amazon alone. 

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@pistachio.enterprises 

Interesting thread and this post caught my eye.  So how far have your sales dropped on the other venue since 2022?  Enough that you were forced to consider other venues?

In your original post you touched on a key point " ... WITHOUT USING PROMOTIONS, NOTHING SEEMS TO SALE ... " (sell).  I think to be more specific, if a Seller does not use eBay's "suggested ad rates" or higher % their sales will be extremely slow.  I know because I proved this over a 2 plus year period.  In looking at the percentages of FVFs and "suggested" PLS rates they appear to be targeting net selling fees in the 25% range (+/-) some amount.  

If 62% profit is not what you want then your pricing structure needs to work back from your desired profit margin and if things don't sell for what you want then this may not be the best venue for you.  If you are doing 1.6 million on another venue then this would just be another business decision, right?

[isaiah53-57]

One reason is that YOUR FEES alone account for over 25% of your items $12,400 aggregate selling price RIGHT OFF THE TOP.

When you haven't even begun to account for all other costs including but not limited to: the acquisition cost of your items, State/Federal income taxes, office costs, shipping material & shipping related costs, asset wear and tear, gas, storage costs, loss/returns/theft, etc, etc, etc, etc, etc...

It would seem you need to get control of those fees...

[fbusoni]

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@pistachio.enterprises wrote:

We've been selling for a month now, and despite heavy sales we're not making any money. We need some advice; we're about to stop using eBay altogether. 

$14,766.49 (total sales)

-       816.26 (taxes)

- 3, 289.67 (eBay fees *)

- 1,550.20  (shipping labels)

------------------------------

$9,110.36 (net sales)

THAT'S ABSURD! THAT'S ONLY 62% PROFITABILITY! WHY IS EBAY TAKING 38% DESPITE US SUPPLYING THE PRODUCTS, DOING ALL OF THE WORK, AND HAVING ALL OF THE RISKS? BY COMPARISON, AMAZON (FBA) TYPICALLY COSTS SELLERS 33% BUT THEY DO EVERYTHING FOR YOU!! MOREOVER, WITHOUT USING PROMOTIONS, NOTHING SEEMS TO SALE DESPITE BEATING EVERYONE'S PRICES ON THE SAME ITEMS!

* eBay fees include $2,163.50 (final value fees) and $1,272.52 (ad fees).

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Your anger is misplaced.  You should be (and I suspect you are) angry at yourself for failing to do due diligence before starting on eBay.  By your own admission you have made $9110 in net sales.  So you have in fact made money.  But $9110 will not go very far depending on how many employees you are paying, how much warehouse space you are renting, etc., etc..  Maybe your business model is broken?

[gone.c-33]

If laundry detergent A worked better than laundry detergent B, I wouldn’t ask laundry detergent B to change for me, I would just stick with laundry detergent A.

[pistachio.enterprises]

Too much trouble with Dyson products on Amazon. But I may have to go back.

[pistachio.enterprises]

I suspect in a few years we'll see either a class action suit or congressional action against eBay for anti-trust violations. There is clearly a difference in sales between using their advertising, and it seems their system punishes sellers for not using their advertising.

[pistachio.enterprises]

Your response is flawed; and it is very doubtful you're dealing with the level of money and product we are. The bottom line is out of $15k, we (the seller) should have profited much more than $9k. Regardless of what the fees may be called (advertising, listing, etc.), considering we supply the products, do all of the work, have all of the risks and eBay in turn does very little, the profit margins should be much more (at least 90%), and that amount should go down based on what the platform offers in return because without us, the sellers, they have nothing. I frankly do not understand why you or anyone would argue otherwise. 

[pistachio.enterprises]

In the world of business, money talks. Simple as that. 

[gone.c-33]

Exactly. So if laundry detergent A gives me more bang for my buck, I’ll stick to it.

[dbfolks166mt]

Without advertising, nothing seems to sale. Literally, every transaction we have has "promoted listing" beside it; in other words, it sold because of advertising. It seems eBay has algorithms in place that make it necessary to use their advertising otherwise the items will not sell, or sell so slowly that you'll be enticed to use advertising.

     Of course it appears that way simply because you were promoting the item but you have no way of knowing if the item would have sold had you not been promoting it. I have never used, and never will use, promoted listings and I still manage sales. However, a lot of it depends on what you are selling as to the value of using PL. 

[dbfolks166mt]

I suspect in a few years we'll see either a class action suit or congressional action against eBay for anti-trust violations. There is clearly a difference in sales between using their advertising, and it seems their system punishes sellers for not using their advertising.

     Anti-trust laws and the Sherman Act are related to agreements among competitors to fix prices or wages, rig bids, or allocate customers, workers, or markets which eBay is by no means doing. EBay held a quasi-monopoly for awhile but that went by the wayside LONG ago. You may see class action lawsuits against eBay, and there have been a few, but you will probably never see one for an anti-trust violation they simply do NOT hold that type of leverage in the marketplace. 

[richard1rst]

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@pistachio.enterprises wrote:

Your response is flawed; and it is very doubtful you're dealing with the level of money and product we are. The bottom line is out of $15k, we (the seller) should have profited much more than $9k. Regardless of what the fees may be called (advertising, listing, etc.), considering we supply the products, do all of the work, have all of the risks and eBay in turn does very little, the profit margins should be much more (at least 90%), and that amount should go down based on what the platform offers in return because without us, the sellers, they have nothing. I frankly do not understand why you or anyone would argue otherwise. 

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The contra-argument is very simple. It is your own fault that you are not happy with your profit margin.

You say - “we (the seller) should have profited much more than $9k.” If you are not happy with 9K that is YOUR fault. Want to fix that? - then YOU must reevaluate your business model and YOUR pricing structure..

One of the first lessons my Marketing professor taught was: When you can’t raise the bridge, lower the river:”

You complained about paying what seems to be 14.65% FVF plus an additional 8.62% in promotional ad fees for a total of 23.27%

Yet when inhawaii points out he is only paying 13.25% and I follow up with 11.12% your only response is to toss a cheap shot at inhawaii and ignore me completely. If I was told by someone that they were buying the same things as me and paying significantly less I would pull them aside and ask HOW! are you doing it. Yet you ignore it completely.

Have you seriously investigated whether the promo ads are even worthwhile? I pay ZERO promo fees. Bingo - instant 8.62% additional profit.

Have you bothered to investigate alternative shipping methods to reduce your cost and simultaneously making sure that your BUYER is paying at least that much plus an extra bump to cover the FVF fees associated with shipping? In reality shipping labels are NOT a cost you should consider.

You say “eBay in turn does very little” - Frankly it is NOT eBay’s responsibility to look out for you. Any more than a mall operator (which is essentially what eBay is) is responsible for handholding their individual tenants. That is YOUR job.

[oszika]

The rule is buy low, sell high. If there's no profit, you need to work on your business model.