So you found a product for $1 and it looks like it is
selling for $5 on Ebay!!!! OMFG!!!!! $4 bucks easy money….next Ebay millionaire…maybe
not. Ebay in a surprise business move
has decided to charge people fees to sell on it…I know that it sounds crazy but
it is what it is. What does this mean
for you? That $4 mad profit could become
a negative profit item…This=not good for business. The other side of it hits you when you
collect your payment…no one is paying you in beads and trinkets, and someone is going to charge you a fee for
taking your credit card payment. That
someone, for me, is Paypal! I personally
love Paypal, it just simplifies everything and has great reports and functions
if you end up registering a business account.
The downside to all of that is that they will hit your money for 2.9% +
.30 cents. How do we avoid selling items
that actually lose us money?
You need to know what your fees are! As I said in the last paragraph, both sides
of the transaction are going to hit you for fees, and you need these numbers to
factor your profitability. The simple
breakdown is:
Paypal: Paypal charges 2.9% of the total collected, +.30
cents. An example of this on a $5 sale
is .445 cents (2.9% of 5=.145 cents+.30 cents)
Not too shabby!
Ebay: I have an Ebay
store, which does get you a discount on final value fees. My average final value fee is 9%, which
sounds like a lot, and in the grand scheme it is. That said, you would spend far more in
advertising than that 9% to hit the size audience that you get on these massive
sites. There are also categories that
have even lower fees than 9%, but I wont be getting into that in this
post. A simple search will give you
those answers. A typical $5 sale for me
on Ebay would have a fee of .45 cents.
Combine that with the Paypal example given above and your total fees
would be about .90 cents. Obviously
there are shipping charges etc…but this at least give you the gist. Now you just take your selling price, minus
your fees and your product cost and there is your profit! (This also does not take taxes into
account, but I am not an accountant)
I hope this helps!
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