Monday, 28 December 2009

Understanding the costs of everything...


-->
-->
-->
Second, Yes, Ebay costs money. You will probably not pay an up-front fee to post the listing, a commission fee when it sells and also a commission to Paypal for receiving the money. It's easy enough to make an excel spreadsheet and figure out all your fees for anything you want to sell. If you don't know these numbers, you might work hard to sell something and end up making a profit of 25cents... or worse. You will lose money.
http://www.pages.ebay.com/help/sell/fees.html
There is a myth that it's fun to go and list every piece of junk in your house on ebay “just to see if it sells” because there's no risk. That's wrong. Ebay makes money every time you list an item on ebay (whether or not it sells) so they like to cultivate the myth that you should try to sell your old shoes, cassette tapes from the 80's or Pokemon trading cards “just for fun”. It's only fun for Ebay because you are paying them money.
Every listing will probably cost you nothing. Ebay used to have a fee (15cents, 25cents) to list everything, but now they have wised up and offer free listings. This is great, but remember that your time and effort are not free. 
There are two ways to sell on Ebay, either you post something as a fixed-price listing (you set a price and the buyer buys it immediately for that price) or as an auction (you start at a certain price and whoever bids the highest at the end of the auction gets it) The advanced search will tell you approximately what you should expect to get for an item. Sometimes you will get lucky and get a crazy bidding war between buyers, but this is rare. (especially if someone else is selling that item)
If you are selling a very popular item (ex. ipod) then you can expect a lot of bids on your auction and it's ok to start it low. If you are selling a less popular item, setting a fixed price is a better idea. Either that, or start the auction at the minimum that you would be willing to take. If you start your auction at 99cents and you only get one bid, then you are obligated to sell it for 99cents.
Ebay also charges a commission when you sell stuff. This is based on what kind of item and what kind of listing it was (for example, books, CDs computer games get charged 15% but clothing is charged 12%)
When buyers go to pay you, they will use Paypal, which charges a commission on the money you receive. Ebay won't let buyers pay with checks, money orders or bank transfers (besides, this would take forever if you are in Israel and they are in America) You can use your Paypal money to buy things on Ebay or you can transfer it to your bank account in Israel. There is small fee for transferring money to your Israeli bank account. If you have one, you can also use your US bank account, which is actually easier than going through an Israeli bank. Israeli Paypal is more complicated than US Paypal.... they only recently started allowing transfers into Israeli banks.
https://www.paypal.com/cgi-bin/webscr?cmd=_display-fees-outside
Open up an Excel spreadsheet right now. Make a column for “insertion fees”, one for “Ebay commission” and one for “Paypal commission” and one for “postage”. When you see something you think you want to sell on Ebay, run your numbers and make sure that you're making a profit.