Monday, 28 December 2009

A little Ebay math

Before you go out and buy a bunch of stuff to re-sell on ebay (or list everything in your house...or everything in your grandmother's house as a favor to her), run the numbers and run them again. Make an Excel spreadsheet and double-check anything you are thinking of selling.

Let's say that you sell an item. Let's say it's a jacket that you find for 20nis ($5.26US) which sounds like a good deal. Let's say you charge $6 for shipping (real price is 20.40nis if your jacket weighs a pound and a half or 681 grams)

Let's say you sell it for $20.

You pay ebay for listing it (35cents)

You pay ebay 12% commission on the final price ($2.40)

You pay Paypal their fees of 2.9% + $0.30 USD for receiving the payment of $26 ($1.05)

You have $26 but all your fees total $3.80. Your shipping costs $5.38. Your item costs $5.26. You make $11.26 in profit.


If your jacket only sold for $10

You pay ebay for listing it (35cents)

You pay ebay 12% commission on the final price ($1.20)

You pay Paypal their fees of 2.9% + $0.30 USD for receiving the payment of $16 (76cents)

You have $16 but all your fees total $2.31. Your shipping costs $5.38. Your item costs $5.26. You make $3.05 in profit.

If you're making a serious business on ebay, you will need to find a cheap enough source for the jackets that you can buy the jackets (and mailing supplies) and pay all the fees and come out with a decent profit at the end. Sure, your profit might only be $5 or $10 for each one, but if you can sell enough of them, then you can make some good money in return for your time and effort in taking pictures, writing descriptions and standing behind savtas in the post office.

If you are spending your time (and money) listing items that don't sell or getting such low bids that you make $1 profit on each item you sell, it might be a better use of your time to get a job in a bagel shop and be happy making a consistent salary for every hour you spend slicing bagels.