Reducing fees

[maxs_market]

Hi everyone, i wanted to ask for tips to reduce Ebay and PayPal fees. I buy a items for example at 290 and sell at 345. 

Now ebay final value fee takes 34 usd and PayPal takes 15 aproxamluy making me left with only 10 maybe.

If anyone has tips to be more profitable so thanks. 

[buzzapparel]

If those are some indication of the margins you’re working with, absolutely do not sell anything, you’ll get killed. The most important thing above all else is to be able to procure your merchandise at a low enough price to accommodate all selling fees, shipping fees & incidentals.  Otherwise you’d make more money walking around any city looking for change on the floor. 

[southern*sweet*tea]

You make money when you buy, not when you sell. Find a lower price for your inventory.

If I were selling something for $345 I would pay no more than $50 or so for it.

[nc-daydreamer]

They would not lower them just for you - sorry. If it were that easy, over a million sellers would be begging for the same treatment. Every seller just accepts things the way it is. 

You must either buy for less (the items you resell), or accept a lower than expected profit margin. Try raising your prices a bit and create your ads in such a way as to build confidence in potential buyers. 

Case in point: I was floored this week when I sold an item for 6$ more than some  other seller's were asking for the same item... I took a chance and asked the buyer as I confirmed their shipping address (just a fyi moment) as to why.

As they shopped, they saw the other ads too. And I was told that my ad was complete and well thought out - so they trusted it more and was willing to pay for the confidence that I was a person of character and would not scam them. I was advised that my ad covered well all the concerns they have when buying something - up front, so they did not have to ask questions about it - and my feedback supported this premise. (Pat on the back for me! 🙂 )

I noticed this happening before, but never asked why - took the chance and asked this time just for the opportunity to learn. If the question offended them, I was ready to accept a bad outcome, but if I learned something, that information would be priceless -- and it was. 

So you don't always have to be the cheapest, just the best you can be.

Good luck.

[tools*]

The category in which I primarily sell has a final value fee of 6.15% if you have a store, and 10% without a store. That's one way to pay lower fees, but of course it depends on what you sell.

[toyshnip]

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@maxs_market wrote:

Hi everyone, i wanted to ask for tips to reduce Ebay and PayPal fees. I buy a items for example at 290 and sell at 345. 

Now ebay final value fee takes 34 usd and PayPal takes 15 aproxamluy making me left with only 10 maybe.

If anyone has tips to be more profitable so thanks. 

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You won't be making any money this way.

We calculate it this way:

First we determine the profit margin we want to get. Then we add 15% on top of that to cover ebay fees. That is the minimum we want our product to be. Then we look at the market to see where they are and adjust up if needed.

In your case, if you want to make 10% profit margin, I would calculate as:

$290 / 0.9 = $322.22

$322 / 0.85 = $379.08

Ebay will take about 15% or $56.85.

Your profit will be $32.21

In your calculation, ebay is taking $49, leaving you with $296 or $6 profit. 

As they noted, to be profitable, you need to either raise prices (to cover ebay) or to buy things cheaper. Sourcing items to sell is one of the more critical parts of a business. Buying too high will just kill the profit.

[nobody*s_perfect]

FVF rates can indeed be much lower than the standard 10%, for Store subscriptions at the Basic level or above.  For Starter subscription level, the rate is still 10%.  And for all sellers, with or without a store, the FVF rate is 12% in most Media categories.

OP seems to be drop-shipping watches, which have a Stores FVF rate of 9.15%, so a store subscription won't solve his problem.

Fees for sellers who don't have a Store: http://pages.ebay.com/help/sell/fees.html

Fees for Store subscribers: http://pages.ebay.com/help/sell/storefees.html

[gagnon234]

Love that! I've wondered the same thing! Thx for sharing your story.

[dippitydoo]

Hello and welcome to the community!  I don't know what product you are selling, but it appears to leave very little wiggle room for profits!  I would recommend selling something else entirely, but I understand that might not be an option for you...so like the others have already stated, try to shop for the lowest priced wholesaler of (said items) and also ask a bit higher than the other listings and being able to get the higher price because you will put more effort into good photography and descriptions.  Best of luck!!

-Dippitydoo

[luckythewinner]

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@maxs_market wrote:

Hi everyone, i wanted to ask for tips to reduce Ebay and PayPal fees. I buy a items for example at 290 and sell at 345.  Now ebay final value fee takes 34 usd and PayPal takes 15 aproxamluy making me left with only 10 maybe. If anyone has tips to be more profitable so thanks. 

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You cannot really reduce eBay fees or PayPal fees - they are what they are.  So the way to be more profitable is to sell items with better margins. 

When I buy for resale on eBay, I turn down anything where my expected selling price is less than 3-4 times what I pay. So in your example, I would not consider buying that $290 item unless I expected to sell it for about $900 at least. 

Why? because of risk vs. return. Here are two examples to illustrate: 

Example #1:

I pay $1 for an item that sells for $21 with $5 shipping. In this case, I am risking $6 (the cost of the item plus the cost of shipping) to make $20. If this sale goes bad, I will make up the loss and be back in the profit with the very next sale. 

Example #2:

I pay $101 for an item that sells for $121 with $5 shipping. In this case, I am risking $106 (the cost of the item plus the cost of shipping) to make $20. If this sale goes bad, even if I make 5 more successful sales I will still not have turned a profit. 

Even though the expected profit in these examples is the same ($20), I am putting a whole lot more money at risk in example 2 than I am in example 1. (Obviously in these examples I am ignoring the eBay and PayPal fees, but you get the point). 

[m60driver]

In your example you are making a gross profit margin of about 15%.  That is gross, before Ebay and Paypal take their fees.  The only way to be more profitable, given that those fees are set, is to find a new business model with much higher margins.

Now I did look to see that you are selling higher priced widgets that are ripe for a buyer scam.   Yes, you can work with lower margins on higher priced items.  But it would only take a single scam to eliminate what little net profit you have for months of work.  Stop now while you are ahead.

[coolections]

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@southern*sweet*tea wrote:

You make money when you buy, not when you sell. Find a lower price for your inventory.  If I were selling something for $345 I would pay no more than $50 or so for it.

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That would be nice. If everyone could do like you they would be Ebay millionaires. OP, you need to purchase at minimum 30% less than the going buy rate. 15% for fees and 15% for you. If you can get it even cheaper obviously more profit. To purchase at $50 and sell for $345 is like winning the lottery and happens once every couple years so don't expect that much profit.

[slati_2013]

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@maxs_market wrote:

Hi everyone, i wanted to ask for tips to reduce Ebay and PayPal fees. I buy a items for example at 290 and sell at 345. 

Now ebay final value fee takes 34 usd and PayPal takes 15 aproxamluy making me left with only 10 maybe.

If anyone has tips to be more profitable so thanks. 

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The is no secret to making money on eBay; buy low, sell high. 

[loveyourimagination49]

Are you shipping from Israel? I may have missed that.

[nobody*s_perfect]

His listings say he's shipping from Michigan.