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Selling On EBay Part 1: Is it Worth it?
Power Seller Has its advantages
Selling on EBay Part 1
SELLING ON EBAY© TO MAKE A PROFIT
While there are plenty of places to sell your wares online, EBay is still one of the best. While you can simply get an account on EBay and list an item pretty simply, there are a lot of steps to making it sell for a decent price and figuring out what that decent price is. Selling on EBay is more of an art than a process, and the rules in play are ever changing. In the 15 years I have been selling on EBay, every aspect of selling has changed. Some changes have been for the better and some were not so great. Over time the changes have been in favor of the buyer and not so much for the seller. We, as a seller can no longer leave negative feedback for buyers, for example. This is silly as some people are just down right evil. I will discuss some of these changes later but first let’s talking about factors related to selling on EBay.
First of all, let’s consider selling price. To sell on EBay, you basically have to be giving a deep discount for the product you are selling. Very few things, unless they are in high demand, can go for actual retail or above. You can also sell your item too cheaply. Let me give you an example. You were given a designer handbag for your birthday. You can’t return it so you decide to sell it on EBay. Everyone else is selling it for $300. You decide to sell it for $200 to make a quick buck. First, if you are new, everyone will likely think it fell off a truck, AKA stolen. The other thing is they will think it isn’t real. They won’t risk buying it from you so it will never get purchased unless some newbie is silly enough to believe you are real or you have some way to let them know you are trustworthy. (Or they know how to play Paypal against you which is a whole ‘nother article). I have a second EBay account for non-business items. When I sell on that account, I always encourage people to check out our business EBay to see our feedback and then tell them to feel free to email us from our business pages to verify we are who we say we are.
So how do you decide your price? There are a couple options. I pay to use the service Terapeak which allows me see trends by dates, products, and much more. Starting off, there is an easier way to research prices. First, do NOT consider setting your price based on the selling price of items currently for sale. Just because they want $500 for something, doesn’t mean they will get it! What you need to do is search for the item you want to sell and then, on the left column, quite a ways down, click on the completed listings under “show only.” This will show what has sold and hasn’t sold as well as the price. If you want to sell an item that hasn’t sold in the last few weeks at any of the prices listed, well that is going to be a rough sale. If it sells all the time and at varying prices, picking your price will be a little easier.
Different price ranges are due to a few factors. One is timing. Sometimes we have an item that sells every week and then all of the sudden it doesn’t. Why? This is often because someone new came on the scene and started selling under our price. This person is likely a competitor who has been at it as long as we have but just started selling the same product. Why do I assume they are seasoned professionals like us? First of all, the price. We get premium prices and people pay for premium prices from us because we are Power Sellers with over 6500 positive feedbacks and we have been around since dirt and we don’t sell junk or used items. It is a trust thing. We haven’t had a bad feedback in over a year. What this story tells you is price is related to your proof that you are a good seller. If you are new, you will have to sell it cheaper than the seasoned EBayer to get rid of it. Will it sell every time? That depends. Out of our 200 products on EBay, 50 of them haven’t sold recently. We keep them in our EBay store so they cost very little to keep listed. That 50 is the average number for us and the 50 items change throughout the year. We have had some stupid purchases that will likely take forever to sell so some of those purchases will always be part of the 50 least active until they are gone.
But, back to price. You know the price range from looking on EBay that they are selling for, so…, is it worth it? Let’s say you found a manufacturer willing to sell you 30 widgets at $50 each. They say the MSRP is $100. When you look on EBay, they are selling daily at around $75. That is a $25 profit right? Not necessarily. For example, to keep our Power Seller status, we have to give free shipping on a percentage of items. Now let’s say your item cost $10 to ship. Your Profit is now $15. Well don’t forget the fees! If you have Power Seller status and an EBay Store, your fees are considerably cheaper but starting out new, you can be paying a listing fee, a selling fee, a fee for extra pictures, etc. The selling fee can be as high as 8%! So 8% of $75 is $6. You are now down to a $9 profit. If you want someone to buy it, you better accept Paypal. When you start off, they charge around 3%. There goes another $2.25. You are down to $6.75 in profit. Deduct from that $6.75, any gas charges, your time to list it, label and paper costs, shipping supplies, etc. Looking pretty grim yeah?
Most products sell wholesale at about ½ of the MSRP (manufacturers retail price) and some are even less, which doesn’t leave you much wiggle room. One thing in the above example you may ask yourself is why in the cotton pickin’ world would I spend so much time taking pictures, doing research, and listing that product for around $5? Well for one item, I wouldn’t! But imagine you have 29 more? You spent the time listing and prepping one time. The next 29, you don’t! Now, imagine you have 30 each of 10 products that sell every week. $5 times 10 = $50/week! That $5 doesn’t look so bad now, does it? Imagine having 3 times that! $150 per week is pretty sweet! What will eat up your time and not make it worth it is listing a product without answering the top 10 things people want to know, in the listing. Your mailbox will be full of questions you have to answer if you don’t put it in the listing.
The real trick to EBay is knowing what the fees are, knowing what the shipping is going to cost you and picking a product that will reap you the most benefits and having multiples of the item makes life and profit much easier. If you want to dig around yard sales to find stuff to sell on EBay, the time spent on research and the fees will often eat up the worth of the find. The only time I hit auctions to find items to sell is when I KNOW, through research, that there is a diamond awaiting me. Many times I am still outbid so it wasn’t worth it. If I can’t buy 10+ and get more within a week, I usually have no interest in selling it. Time isn’t free or you would work for free.
Until Next Time,
Barb Wilson, MBA/IT
Wilson Computing Solutions, LLC