Ebay. Is it worth it ?

Thanks guys.

I have just been reading around a bit. Between fees, ebay rules, and then buyers claiming they did not recieve the stuff. Is the hassle too much for the little gain ?

or is it a case that to sell on ebay you need a very high margin item in order for it to be worth your while rather than messing about with very low value items that everybody is selling.
Is that the secret here ?

I have made decent amounts of money on eBay over the years. Things have continually changed there year by year. Usually not for the benefit of the seller. I still sell there but it seems that every time eBay makes a change it results in the sellers making a little less money. I think eBay is getting close to saturating the market and their growth curve is flattening more then they would like. When growth stalls in a public company the shareholders become unhappy. So, eBay has to find ways to cut costs an/or increase revenues within the context of slower growth. Naturally this "extra revenue" tends to get extracted from the sellers as they are the easiest to victimize since many have invested time and money into their eBay business.

A couple of the more significant changes over the last year or so resulted in quite an exodus of sellers. They either moved to another platform or just quit altogether. eBay actually had to backtrack a little and throw some crumbs to sellers over the last couple months. Still, when they started charging selling fees on the shipping amount that was the last straw for many sellers. I'm still using them as a selling platform but have begun to move toward my own sites to sell on.

I still think you can make money by selling on eBay. It's difficult if you're looking at items that everyone can get their hands on like phone cases etc. I sell mostly vintage items that I find at garage and estate sales. You must have some intimate knowledge of what is and isn't valuable in order to succeed so it makes it a little more difficult to jump in and make money. So, less competition. Good Luck.

2000-2006 Is booming years for anything online, don't even compare.!

Recently I bought Hot water heater thermostat on eBay. $17.95 + Free Shipping.. I dig into biggest wholesale inventory .. minimum price I found around $10. Even looking at the part it cannot cost less than that, no way (Specific part US made).. Now 10$ + (8-10%) ebay fees + around (2%) PayPal fees + shipping fees, which are always rising lately..Basically you cannot ship anything out for less than about $6 in the US ( And that's just cheapest rate without insurance..SO??? $17.95-$6- $2.50(fees).. Nothing left (It's a loss!!!) why even bother.?.Would you spend time creating listings for $0.10 profit (assuming that's somewhat possible?) This is an Absurd.. Blahh-Blahh Tremendous market place.. For buyers, probably, but I'd rather buy on Amazon anyways.. Conclusions? Amazon/Ebay is pretty much profit margin dead, if you put on the sideways all that usual hype. Except if are selling stolen goods.
Good luck profiting... All I see is e-books selling around for clueless dudes, scrambling to make a buck or two. I'm sure their stock will crash too. You can only Tax people until they have at least 1 sandwich left on their table, ones they get naked, it's over...

P.S:

I Placed about 50 products for sale on Amazon for cheapest price and since day One I'm like a kid playing games.. For example my price is $100.99, next few hours I see competition move down to $100.97, I lowered to $100.95, they proceed with $100.93 and so on.. I'm too old to play those games.. It's a joke..
What kind of Biz is that?

I am sorry you don't agree with my information, but it is based on several years of experience.

The average mark up for goods resold online is 40% for a standard wholesale model. This is an averaged number I've come up with from several different types of products I've purchased to be resold.

A standard eBay seller pays more fee's than they really anticipate.

For example: As I have mentioned, 40% mark up is average but lets assume you find an item you can purchase for $10.00, and sell for $20.00, but costs $4.00 to ship. Sure, you could stick your customer with a shipping charge of $4.00 or more, but since this eBay which is highly competitive and chances are you won't make the sale if you aren't competitive in pricing unless there is some large variable such as being the only person in the U.S. selling an item, in which case you could sell and target your local country (U.S. eBay Buyers) and charge more than your international competitors.

Here is the break down:

If you list and sell an item for $20.00 that cost you $10.00, then you will pay:

Insertion: $0.30
Final Value: $2.00
PayPal: $0.88

Total Fee's: $3.18

So, you are paying 15.9%, but for the sake of these numbers, lets round this up to 16% because of those handful of packing peanuts and maybe some tape, but lets assume the box itself was free.

So your $10.00 profit has now become $6.82 Which still isn't bad for a 100% profit margin.

But now comes shipping, lets say it weighs about 15 ozs, you can ship it out through USPS and your customer gets it in 3-5 business days which is standard and will likely allow you to maintain a positive feedback score. This is roughly $4.00 (The real number is actually about $6.50 for a 15 oz boxed parcel, but lets just pretend it's $4.00)

Your profit margin has just went from $6.82 to $2.82 - This is before U.S. taxes, which you may or may not pay based on your own personal preference and/or volume of your business.

And of course, this is because of shipping, and you could rightfully dispute my stance on including free shipping to the customer, but it's no secret that the benefits of offering free shipping to your customers out weigh the increased profit for items that you are reselling from a wholesale market.

Lets carry these numbers over and use them in an example-

You purchase some branded childrens school backpacks from a reputable distributor. He says your minimum order purchase is 20 pcs, so you purchase 20 pcs for $160 and it costs $40 shipping, bringing your total to $200. If you divide your total price by the number of items you've purchased, then it cost you $10 per item.

Off of your $200 investment in inventory, it takes 1 month to sell your 20 childrens backpacks and you sell each one for $20.00 + Free Shipping. Your gross sales are $400 which looks great. After the costs of your inventory, shipping, and fees, you make your $200 back plus a total profit of $56.40

Lets reverse these numbers a bit and assume at the same price structure (which actually does change a lot based on volume, but keep in mind we are still assuming there is a basic 100% profit margin):

You sell and gross $10,000 worth of inventory each month, which is 500 childrens backpacks. Your total cost of your investment in inventory was $5,000 (you've doubled your investment) - and after fee's, you made $1410.

At this point, we aren't including the cost of physical overhead, electricity, storage, any other utilities, and the cost of additional labor wasn't included.

Now, before I finish my post I want to say... eBay IS a great method to make money and I do not discourage people from it. It wouldn't make sense for me to utilize eBay as a branch of my sales and to discourage other people from using it too. I've been very close to the creation and management of a U.S. based company that mainly focuses on eBay that is eBays #1 clothing seller in the U.S. if not globally. I just want people to be educated in the actual costs. I've seen HUNDREDS of people get to $10,000 a month in sales and have it crash because they stop being financially analytical of the cost of doing business on eBay. This is why most of eBay's top sellers in the mid 2000's have either ceased operations, sold out to competitors, or focused more directly on selling off of eBay. And I know you are probably thinking: "If eBay is so bad, why are you selling on it?" and my response is that I'm one of those sellers in China that sell a large volume of inventory across several accounts for a low profit margin, and with this I've found success and sustainability.

There aren't really many secrets to doing it. You just need to research products the way you would any other niche. Find something with good demand, but is still niche enough to where you could fly under the radar. Here are general rules:

1) Amazon charges by weight, so you want to pick lighter items that are easily storable. Under 10 pounds, the lighter the better.

2) You generally don't want to compete against a listing where Amazon is selling the product.

3) If there are only 1 or 2 competitors selling out of the warehouse, it might not be a bad idea to try it out, even if you think there isn't much money to be made. I have noticed on Amazon, it's very easy to muscle other people out if you underbid them. I'm assuming they end up just getting discouraged with the whole process. Raise prices slowly after they exit.

4) Personally, I try to go through the big items that sell well on Amazon, but are not currently stocked in the warehouse. In my experience, having it stocked in the warehouse increases my own sales 40% vs. fulfilling it on my own.

5) Ask your suppliers upfront to let you know what levels you need to sell to get a further discount.

Ideally, as you scale things up, you add more and more products to the mix. Maybe stocking one product in the warehouse will make you $5/day net profit at first, but you want to add other products to the mix over time. Obviously, the more you ship to the warehouse the lower your per unit shipping cost becomes (and overall cost). So shipping 1 UPS box of products might cost you $2/unit. But if you start increasing volume to where you can send a pallet, it might be .10/unit.

You are right Dave,

I don't do eBay marketing myself but I see plenty of people making good money there. Many of the schemes you refer to in the WSO section have been sent to me for review, and rarely do they impress me.

People who have worked out how to make a success of eBay marketing have generally thought outside the square.

Your point about 90 million visitors a month is so important because it shows the vast potential if people learn how to tap into it.

What does make me wonder about sellers' lack of initiative is seeing so many just joining the herd and selling multitudes of low profit items against hundreds of others who mostly have the mindset that having the lowest price is the only way to make sales.

The result is pathetically low profits if any profit at all. No wonder they moan about not being able to make money on eBay.


I see four main factors if you want to make good money on eBay or e-commerce in general, and they are:

• Find a real niche with products you can sell
• Know the price you really can get.
• Know all of your costs, and
• Buy at the absolutely lowest price possible.

Although it undoubtedly works for some people, I would see arbitrage as hard work and a bit risky for me, and that is why for consistent income I suggest small scale imports direct from manufacturers in China.