Monday, 19 December 2011

How to make a profit on Ebay


One massive tip for all new sellers, when you create Ebay create PayPal and then varify your PayPal and then buy a number of things - this can be for you, for your selling such as packaging, stuff you think you can resell for more money or what ever but build up some positive feedback and some stars this will enhance peoples want to buy from you!!

I would also highly reccomend a program such as Microsoft spreadsheet. It's very sime to use all you have to do is write the following headers in the top boxes and fill the correct information out below and use some fancy colour in the middle to help you navigate around.
* Item Name
* Bought From
* Bought For
* Listing Fee
* Sold For (Bid or Buy it Now final Price)
* P&P Sold
* Ebay Fee
* PayPal Fee
* Actual Postage Cost
* Actual Packaging Cost
* Actual Profit

Now under each fill out the correct information if they're not applicable such as "bought from" and "bought for" then put NA if you listed an item for free put £0.00 fill out the boxes working from left to right and in the end box you want to write down actual profit You can use colours to colour these boxes (cells) or font so that you have a more easy to read set of information I highlight things that sold in Green and profit in a darker Green. I highlight things that didn't sell in dark Red and minus profit in a lighter red. This helps me see how I did on each item, each day, each week, each month can use this as a simple guide for making an accounts listing to keep track of money in, out, proffit, loss. It's because of this that I have managed to make £350 last month selling things I didn't want laying about my own home!! It might not be a lot of money but... it's better than -£350!!

I recently started using ebay and I found quite an issue with all the different sellers fee's and such and when I first started I found I was paying Ebay to give my stuff away!! Let me explain.

First when you sell an item if you put a starting bid of more than 99p then it costs money! If you have additional pictures, a buy it now, a percise listing time or anything else fancy the this also costs money and these fee's may not seem a lot but they soon rack up.

Now in you're head you're thinking well that's not all that bad. So you sell an item and Ebay then takes 10% off of what you sold the item for (Auction or Buy it Now) upto £40!! So if you sell an item for £10 they take £1 off you if you sell an item for £400 they take £40 and if you sell an item for over £400 eg £1000 they still only take £40 off you (but there may be additional 20p charge here and there!!)

So you're thinking ok well Ebay charged me 15p to list an item at £2 then they charged me an additional 20p for selling this item (35p) that's not bad but then PayPal charge you for using their survace which can be upto 10% but usually 3% but they take this from both the item and the P&P cost so if your item is £2 they can take upto 20p off you and if you P&P is £5 then they can take upto 50p off you with a total of 70p which wouldn't be so bad except that's now a total of £1.05 spent on fee's.

Then you have to print a reciept which costs for paper and ink. Plus any purchased packaging if you don't have anything you can recycle. Plus shipping cost at the post office and next thing you know you're at -32p ...that's 32p out of pocket but imagain that you did 10 listings like this £3.20 or worse all 100 listings £32 get the idea.

So then you have to think about "humm how can I set my P&P so that I am not losing out with out upsetting customers?" the truth is you can't! You will always have people upset at your P&P and in addition people might not buy from you. But I think I am resolving my issues now!!

Here's what I do. Right, so I start off with a product and I list it for 99p (it's free) I work out the base rates and base costs of fee's and postage and I put the postage at a minimum based on those results and then I attach a document explaining that P&P covers: Fees, Postage, Packaging, Electric, Fuel to get to my post office, My time and Electric. suddenly it looks like your selling yourself short and this makes your P&P look more reasonable. So in addition I also print out the folloing information (it's a page of A4 long I know!)

I would like to take a moment of your time to inform you about P&P and Additional Fees of which Ebay Sellers encounter which may make Buyers question the amount on P&P / Price.

P&P Cost: I work out P&P based upon a few small fundamentals:

1. First I research to see what other people are selling this item for or similar items or indeed completed listings to see what they sold at and in addition we also search the internet to try and ensure I am making a profit while still giving you the best deal possible 90% of the time!!!

2. Then taking into consideration the size of the item and approximately what the size will be one it is parcelled up. I also take into consideration the weight of the item (not including additional packaging weight) and I use Royal Mail website to calculate the size + weight = postal cost 2nd class. (I can also work out from this other postal, class, costs!)

3. I then take into consideration the item and what packaging it would need to be put in, if I have some recycled stuff then I know I can use that and I do not add this as additional cost saving you as the buyer money, however if I know I will have to use new packaging then that packaging cost will be added onto the P&P. Taking this time to also think about other packaging and product(s) needed such as bubblewrap!

4. Next I look at additional cost such as to print out a receipt; so printer ink and paper. - I work this out by my local printer place does 10p per piece of paper for black and white printing and 15p for colour so our minimal cost for this is 10p per page of paper even when printing at home. (Any additional paper such as this information I do not count! I do not charge you! As you didn’t require/request it!! It’s just a spot of free information and advice!)

5. I also think about how much tape I would use per item to make sure the package is sealed and secure. I also use tape to prevent corners from tearing to preserve the item inside the package a little more. We also use fragile tape on our fragile items and on occasion items that wouldn’t be classed as fragile to try and ensure the item(s) quality is well-maintained by the time it reaches you!

6. I know that a standard parcel minimal amount is £1.33 to send 2nd class so most of our prices are based on that unless they would qualify to fit through a post box like a letter in which case this is £0.92 to send as a letter parcel or the current rate of a 2nd class stamp (although vary rare I send via post box as I prefer to think it’ll be handled better via the post office!)

In Addition: Something you as an Ebay buyer probably don’t know; us Ebay sellers have to pay a listing fee to list an item! We also have to pay Ebay 10% (up to £40) selling fee for the privilege of selling an item through their site on all items sold; this only affects the bid/buy and not the postage. We also have to pay PayPal a 3-10% (up to £40) selling fee for the privilege of money transaction going through them; however this percentage takes into account both the item cost and the postage cost and takes a percentage from both! (This can be up to £80 of an item sold over £400 pound such as a TV, Laptop, Computer, Car, Bike, Whole Sale etc…

This means that if we sold a standard item for £2 with £2 postage this is the average break down cost:
Listing Fee £0.15
(Received) Sold for £1.69
(Received) Postage of £2
Ebay Sellers Fee £0.17
Paypal Sellers Fee £0.38
Packaging £0.50
Standard Postage £1.33
Actual Profit of item £1.16

So while that looks good it’s usually not the case, some items postage is based at low but in reality the actual postage cost is more for just postage before the additional packaging cost resulting in a minus in profit to the point where you just paid someone to sell your stuff for you and actually gave it away and ended up out of pocket!!!!!

When you come across a seller who is offering FREE P&P it usually means either they’re making a profit from the bid/buy it now price. Eg: wholesale buyers can pick up 100 items for £20 and then sell them at £1 each making a clear profit to the point where they can afford to do FREE P&P however this is mostly business sellers and not an independent sellers!

So if you're now selling items but not getting the money you want for them as there was only one bidder up put 99p and you sold your £100 item at 99p - no good. You have to be reasonable. Some times (strangely enough) some people will see an item marked at 99p and assume it's not great because it's 99p but they may see an identical item priced at £4.99 and buy it because more money means better quality - some people are strange. So with in reason you can mark up your more valuable items because if people really want something they will buy it! I could use a number of examples here but I feel I have rambled on long enough!

Please feel free to email me at if you have any thoughts, ideas or questions and I will be happy to give you more free advice.

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