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eBay: A Question About Profit

leono

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So, I've been selling some things on eBay, and I've noticed a few things. I've noticed that overall I do make a profit, but on specific items I'm taking a loss (a lot of which has to do with beginner mistakes). Is this normal? I ask because right now I'm just selling things I find around the house, so as of right now, I don't have to take into consideration how much it would cost me to purchase items. I really want to expand this enterprise so that I can earn some more money. However, to do so I would need to start buying items to be resold. I'm nervous and scared to do so because I don't know if I'm doing this right. So, what do you all think?
 
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oddball

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Well if you are selling at a loss, and trying it to make money, its not normal. Make beginner mistakes is though. I lose money every once in a while due to my own mistakes, but most of the time, I make a good profit. Just sold a $35 item and profited $30, and profited ~$80 on a $125 item. Both I sold on ebay, the $35 item took about a week to sell, and the $125 took 2 days. One item, paid $400, looks like I will lose $25-50 because I searched too quick when doing my DD and checked prices of a slightly different model.
 

BeingChewsie

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I'm sorry, I don't understand the question?

Is it normal to make mistakes? If that is the question, yes.

You can't compare stuff you are selling from around your house to the profit a properly researched niche product(s), bought at the right price and marketed in the right way to a needy, hungry market will yield. Apples to oranges.

Sue
 

leono

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I'm sorry, I don't understand the question?

Sue

Let's say I sell 3 items. One sells for $5, the second for $6, and the last one for $20. I underestimate how much it will cost to ship the item that sold for $5, and end up paying out of pocket $8 to ship it. Because of this, I've lost money on the $5 item. However, I do everthing "right" on the $6 item and $20 item, so that means after expenses I earn about $22. This is what I meant earlier about overall profit vs. loss on specific items. Sorry, for not being more clear.
 
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biophase

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Let's say I sell 3 items. One sells for $5, the second for $6, and the last one for $20. I underestimate how much it will cost to ship the item that sold for $5, and end up paying out of pocket $8 to ship it. Because of this, I've lost money on the $5 item. However, I do everthing "right" on the $6 item and $20 item, so that means after expenses I earn about $22. This is what I meant earlier about overall profit vs. loss on specific items. Sorry, for not being more clear.

So what are you asking? You lost money on item 1, made money on item 2 and 3. So?

Is it normal? I don't know. I wouldn't want to lose money on 33% of my orders, but sometimes you screw up and mis-price something. But in an auction setting, anything goes.
 

oddball

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Profit per item. You want profit on everything you sell. If you go for overall profit you may be ok, but there is an item that lost money, so that's not what you want.
 
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RE Taipan

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Leono,

Hi...here is my 2 cents....no pun intended...LOL

Ok, at this point, don't sweat losing $3....you are selling stuff from around your house...so that money (ie, your investment in the cost of goods sold) has been spent along time ago, when you first acquired whatever it was.....so at this point unless you are losing money on shipping.....your profit on this stuff is approx 100%.

Now...to avoid a repeat of that...consider getting a digital scale....lots of them around, just get one that has a decent size plate and can handle weights that your items are going to be. Next, look into the USPS's shipping programs...lots of stuff avail for flat rates or rates that you can easily calculate with the above said scale....this way you will always know...usually to within a few cents how much shipping would be from your dwelling of used stuff emporium to the clammoring masses just willing to snatch it from your willing hands.

..at this point, just get used to the process..and be glad that there is some one out there who is willing to buy your cast off stuff.

Moving forward...at some point you will have sold all the stuff you can that you currently have and will be down to wall studs, some wires and a few pipes :) ...that is when you need to understand that really your profit is made when you buy the stuff whatever it is...you should understand what market you are in and what the buyers of that market are looking for as well as who and what the competition are doing...this way you will know before you send that USD$30,000 to Ningbo Heavy Manufacturing Facility No. 237 to hope that you will see your widgets in about 8 weeks that if you are buying your product for $X and you can sell for $Y...that the difference will be your profit per item after all expenses are figured in.

Its really pretty simple when you look at it in its simplest form.....

Profit per item = Price of item sold - (Cost of goods + related expenses[duty, advertising, shipping, overhead, etc.])

Hope that helps.
 

leono

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Leono,

Hi...here is my 2 cents....no pun intended...LOL

Ok, at this point, don't sweat losing $3....you are selling stuff from around your house...so that money (ie, your investment in the cost of goods sold) has been spent along time ago, when you first acquired whatever it was.....so at this point unless you are losing money on shipping.....your profit on this stuff is approx 100%.

Now...to avoid a repeat of that...consider getting a digital scale....lots of them around, just get one that has a decent size plate and can handle weights that your items are going to be. Next, look into the USPS's shipping programs...lots of stuff avail for flat rates or rates that you can easily calculate with the above said scale....this way you will always know...usually to within a few cents how much shipping would be from your dwelling of used stuff emporium to the clammoring masses just willing to snatch it from your willing hands.

..at this point, just get used to the process..and be glad that there is some one out there who is willing to buy your cast off stuff.

Moving forward...at some point you will have sold all the stuff you can that you currently have and will be down to wall studs, some wires and a few pipes :) ...that is when you need to understand that really your profit is made when you buy the stuff whatever it is...you should understand what market you are in and what the buyers of that market are looking for as well as who and what the competition are doing...this way you will know before you send that USD$30,000 to Ningbo Heavy Manufacturing Facility No. 237 to hope that you will see your widgets in about 8 weeks that if you are buying your product for $X and you can sell for $Y...that the difference will be your profit per item after all expenses are figured in.

Its really pretty simple when you look at it in its simplest form.....

Profit per item = Price of item sold - (Cost of goods + related expenses[duty, advertising, shipping, overhead, etc.])

Hope that helps.
My worry isn't about what I'm currently selling. I knew going in that I would probably lose money because of my inexperience. I've honestly just been excited to see my stuff sell even when it's only been for a dollar or two. What's making me nervous is the thought of losing money on things I plan on buying with the intent to sell. I haven't bought anything yet, but I plan on starting soon.

And thanks for the idea of getting a scale, I'll start looking around for one to buy.
 
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Steve W

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For what it's worth...

I run a small side business selling on an auction site & make a point of only buying things that I can sell for triple the price I buy them wholesale for. This covers sales commission, tax, broken/not working items & still gives me a profit of over well 100% on each item.

Average time to move an item has been about 2 weeks (2 months the longest). I have found good product selection & knowing the market & competition to be key in auction selling.
 

HsrJames

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Selling on Ebay isn't hugely complicated. When you are signed in, search for the item you are about to list. Then, click the option to see completed listings and you will see exactly what the item is selling for. Click on the item you want to list that sold for the highest price (green). You will see what category they listed it in, keywords in the title, starting price, and other important things. Copy this and take good pictures. Use calculated shipping and you will be fine.
 

futhey

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1. Ebay by design gilds people into selling at a loss. Keep track of your expenses.

2. You don't have to follow through on a transaction. If you "loose" or "damage" the item that's just auctioned off at a loss you can cancel the transaction (Its like having a free hidden reserve). Not sure if there are any penalties for "loosing" too many items.

3. Turn this into a positive. When you're evaluating the risk, consider that worst-case scenario you'll be able to easily liquidate your product and get most of your money back.
 
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Vigilante

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2. You don't have to follow through on a transaction. If you "loose" or "damage" the item that's just auctioned off at a loss you can cancel the transaction (Its like having a free hidden reserve). Not sure if there are any penalties for "loosing" too many items.

At a minimum, this advice will end with negative feedback, loss of power seller status, and loss of top rated seller status. At it's maximum, this could end in your account being permanently banned from eBay.
 

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