Seller performance

[ltl.liquidation]

Hey guys I'm new to selling and had a question.  My total sales is 148,  taxes and fees 10,  selling costs 71 (47.5%),  net sales 68.  Being new is this good?  I thought selling costs should be less than my net sales or am I wrong.  Please explain.

[femmefan1946]

Your fees are based on the entire transaction not just on the selling price.

So if you sold $148 in goods and charged $10 for shipping, you would be charged 12.9% of $158 as Final Value Fees.

• Note that there are different FVF for different categories ranging from 0%- 14.55%

https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822#section2

You are also charged FVF on any sales tax that passed through your account, although eBay charged, collected and remitted that and you were not involved. This is Standard Practice with payment processors who charge their fees on the entire payment, without breaking it down.

Keep track of all your costs, including packaging.

With $148 in sales already, you are on track to receive a 1099 form for 2022 from the IRS.  The actual tax will be on your profits, not your payments, so keep records of all your deductibles.

[eunster1313]

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@ltl.liquidation wrote:

Hey guys I'm new to selling and had a question.  My total sales is 148,  taxes and fees 10,  selling costs 71 (47.5%),  net sales 68.  Being new is this good?  I thought selling costs should be less than my net sales or am I wrong.  Please explain.

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Learn about the fees we charge for selling on eBay – from insertion

and optional upgrade fees, to final value fees and credits, as well as

basic fees by category.

Selling fees

https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822&st=12&pos=1&query=Selli... 

[ltl.liquidation]

Hey thanks for the reply!  I just thought that my selling costs being more than my net sales, that I'm losing money.  Is that right or am I understanding it wrong?

[kosmosattik]

@ltl.liquidation 

Are you losing money?  Only you can decide.   You have $68 you didn't have before.   If you bought those items to resell you might have a loss.   If they were just laying around the house with no value to you then I suppose you could say you made $68.

Here's the thing:  the lower the price of the item and the higher the shipping cost, the lower the net.  Obviously if you sell a $10 T-shirt with free shipping your margin will not be very good.  If the packaged item weighs over a pound and the shipping cost is $8 you will lose money in a real way.  If you sell a $75 item with free shipping and it weighs under a pound with shipping cost of $5 your margin will be much better than in the first case.

You seem to have a grasp of the math.  You need to work on perspective, and more importantly, getting a fix on your net before listing and pricing.

[714ricki]

The definition of good is very subjective. You must decide how much profit is good for your business. You definitely should study all the costs in the transaction.....plus don't forget to account for some potential income tax o n the profit. From the outside looking in and assuming that your shipping was reasonable, you made a pretty good profit. Congratulations. 

[ltl.liquidation]

I work at a thirft store where most of the items im selling now I bought for 40 cents or less.  (Like the signed football someone donated that I bought for 80 cents).   Not really taking into consideration cost of the items I buy into my profits yet. Not until I start buying pallets, anyways.

[ltl.liquidation]

Thanks

[downunder-61]

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@ltl.liquidation wrote:

I work at a thirft store where most of the items im selling now I bought for 40 cents or less.  (Like the signed football someone donated that I bought for 80 cents).   Not really taking into consideration cost of the items I buy into my profits yet. Not until I start buying pallets, anyways.

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So the thrift shop where you work (I take it this operates as a charity like we have Salvation Army over here - all proceeds go to help the homeless/displaced and otherwise people in need etc) are okay with employee's getting first choice and being able to purchase pallet lots for re-sale?

I only ask because over here it is a definite no. While we, the public, can purchase from these places as a regular customer, if we are affiliated in anyway with the organisation (ie: staff getting first dibs on items that are priced as to be affordable for those who need them) it is not allowed.

Just wondering how it works for you guy's.

[caldreamer]

IRS requires you to report gross sales.    Gross sales (purchase price + shipping income) total amount you received from the customer.   Then you deduct your business expenses (EBAY fees, shipping labels that you purchased, cost of goods, mileage, packing materials, etc).    This would give you the net sales (amount that you pay Federal taxes on).

If your net profit is too low...you need to raise prices or acquire goods at a lower price.

[ltl.liquidation]

The pallets I'm taking about buying would be from liquidation websites.  Not from my store.  I'm a manager here but the things I buy are after they don't sell to the public after some time.  We have a sequence of 2 color tags for discounts and each week the colors change to 2 different colors.  Let's say we are pricing items with a blue tag this week.  The next time we price blue tags again will be 6 weeks from now.  If items are still on the sales floor after that they probably aren't going to sell so we are allowed to buy them.

[femmefan1946]

Shipping is paid by the buyer not by the seller.

Even those of us who offer Free Shipping, are not losing money. We just raise our asking price to include our shipping costs.

Which is cheaper  a $5 item with $1 shipping or a $6 item with Free Shipping?

 You can have costs that are 75% of the selling price and still be making a 25% profit.

This would be great on a $100 item, but deadly on a $10 item, considering the work you put into photography, description, packaging and sending.

Oh- I'm non-US but there are discounts on shipping available. Canada Post gives us 5% off with their Solutions for Small Business card.  I think stampsdotcom and pirateship also offer discount shipping labels. And you can buy discounted postage stamps on eBay, mint never hinged and valid.

BTW- never mention buying from your thrift store employer again. Your situation sounds fine to me, but you do not need the attacks you would get from some sellers who won't believe the thrifts hide merchandise from them or buyers who think we are ripping off the poor when we buy for resale.

[soh.maryl]

Not sure how thrift stores work in Australia.  You'd know that much better than I do, but here in the US, most thrift stores' primary purpose is to sell as much goods as possible to the buying public so that they can make money for charity.  Not sure they price so that low-income families can buy necessary goods.  Many of them also have programs for developmentally disabled folks to be trained so that they can find a place in the working world.  

Have shopped at TS most of my adult life.  You can find household goods like pots and pans, blankets, curtains etc.  Some nice furniture gets donated also as well as sewing fabric and notions.  Currently buy mostly toddler toys for some great grandchildren who come to my house to visit.  No one at a thrift has never turned me away at the door because I make too much money.  

[wpt05]

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@ltl.liquidation wrote:

I work at a thirft store where most of the items im selling now I bought for 40 cents or less.  (Like the signed football someone donated that I bought for 80 cents).   Not really taking into consideration cost of the items I buy into my profits yet. Not until I start buying pallets, anyways.

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So you are selling an autographed football to yourself for 80 cents that could be going to charity?  Sounds a bit shady to me.  

I agree with @downunder-61 , seems like there is some conflict of interest there.  

[genv]

@wpt05 

Exactly why I no longer source from Thrift Shops.

A "Dealer" seems to work in every one.