posted on March 14, 2001 10:39:02 PM
Here's a bit of depressing reality for those of us who are trying to survive on sales of small auction items.
For an example, I'll use a $5 item with a 100% markup. *IF* it sells at the opening bid of $10, here's my costs...
Cost of item ................. $ 5.00
Film & photo processing....... .35
Listing fee................... .55
Gallery fee................... .25
Reserve fee................... .50
Cost of 2 pics at AW.......... .10
Cost of relisting at vrane.... .01
FVF at eBay................... .50
FVF at AW..................... .10
Billpoint fee on $15.......... .43
Cost of tape and packing...... .20
Delivery confirmation &
excess postage (charged only
$5 even to entice customer).. .40
Vehicle to PO (12 miles, divided
by average of 6 parcels), based
on IRS allowance ............. .62
Computer depreciation......... .20
Acquisition costs (finding the
item, driving to get it, etc.) .10
Net profit (excluding any wages,
ISP fees, or other overhead).. .69
Not exactly an astonishing rate of return, is it?
I may have misstated a few figures here, and a few are estimates; but generally I think it's correct. And obviously some of the extra "features" could be eliminated to save expenses. But this sure does point out how easy it is to drop in the red with just a few extra small fees, doesn't it?
posted on March 14, 2001 11:01:30 PM
Reserve fee would be refunded if sold. If you lowered your reserve price to $9.99 instead of $10.00 you can save .15 in listing fees. Net profit (excluding any wages, ISP fees, or other overhead).. .$1.33
It's the power of the Cheesepuff.
Edited to add:
Billpoint fee is only .35 because the sale is not more than $15
Net profit: $1.41
[ edited by miplet on Mar 14, 2001 11:13 PM ]
posted on March 14, 2001 11:03:37 PM
I think the content of the opening post sums up the problem with too many sellers.
Most sellers should stop crying and start thinking.
[ edited by auntperfect on Mar 14, 2001 11:05 PM ]
posted on March 14, 2001 11:33:56 PM
Ooops You save .25 not .15 for listing it at $9.99 instead of $10.00.
Net profit: $1.51
[ edited by miplet on Mar 14, 2001 11:37 PM ]
posted on March 15, 2001 12:15:49 AM
Get real. Twenty cents wear and tear on your computer per transaction? I could buy a new computer every month with those figures. A reserve price on a $10 item? LOL
posted on March 15, 2001 12:20:00 AM
Oh for crying out loud, people. I'm not a newbie, and I'm certainly not an idiot!
I know darn well that most of those so-called services are a waste of money. My point was to illustrate just how significantly minor expenses can really add up. Alone, none of them sound really like a big deal.
It seems like you looked for ways to inflate your costs so that your net profit was lower, basically creating numbers that would support your arguement.
The problem is, by throwing in fees that you would not use if you were doing a serious analysis you end up lacking credibility, and the end result is no one will take you seriously.
posted on March 15, 2001 12:42:53 AM
By the way...
Anyone who is buying a $5 item to sell for $10 (especially considering their penchant for extra features and services) needs to go to business school.
If I am to part with something for $10, it will have cost me NO MORE THAN $2.50 to acquire, and my net profit will be about $5 to $6.
NO reserve
NO gallery
NO vrane
No AW
NO Billpoint/Paypal
NO postal costs, since buyer pays that (including supplies to pack).
posted on March 15, 2001 01:14:11 AM
This is absolutely one of the dumbest post I have read on AW, and believe me, I have read plenty of them...and...
This is probably the dumbest statement in a post:
Computer depreciation......... .20
Clearly this is a post just for attention, hoping that everyone would praise his/her intelligence...it's too bad the poster didn't realize that he/she doesn't look too bright on this message...LOL
Can I charge a prorated depreciation fee for wear and tear on my spleen while I was ROTFLMAO at your second post in this thread?!!!
Best laugh I've had since the AW announcement that began..."I'd like to start by saying Thank You to the thousands of sellers who have signed up for one of our new fee plans..."
posted on March 15, 2001 06:06:36 AM
I think that barkrock was only trying to point out the fact that we are being inundated with fees and I think they were only trying to show the worse. Of course it does not mean that they or anyone would put a reserve on a ten dollar item etc but it shows just how ridiculous the fees are becoming. I looked up barkrocks feedback and with well over 800 plus I don't think this person is clueless. IMHO. Frankly, I TOO have sat down and looked at the fees that are piling up with the different places wanting a piece of the pie and my pie is getting pretty slim.... All I read from this is that all these fees are going to knock the small item seller out of the business.
posted on March 15, 2001 06:11:10 AM
AND FWIW.....I know you have to be thick skinned to post on this forum but sometimes it gets a little rude and I know I don't very often post for that very reason. If you disagree, fine, but disagree politely PLEASE?? (jumping off the soapbox)
posted on March 15, 2001 07:16:06 AM
Well I can certainly relate to barkrocks original intent.
The bidders have all gone SOUTH!
I list $1.00 NO RESERVE no matter what I pay for the item.
Here is my cost:
1. $.30 to list
2. $.10 for 10 days(I need all the exposure time I can get)
3. $.25 for "My Personal Picture Gallery" I've surveyed my customers on this and many say they use it. And it is apparent with multiple bids.
Thats $.65 to ebay alone, not counting FVF.
Now if they pay with PayPal or BillPoint add another $.30 to $.35.
It sure didn't take long to eat up that dollar now did it.
This dosen't even include any wear & tear on anything.
With this last round of auctions I had on......bidding was WAY DOWN and several pieces went for just $1.00.
To try and keep shipping cost down I somehow underestimated the shipping cost and it ended up COSTING ME to get there $1.00 item to them.
You think I'm not depressed over all this.....well I am.
After 2 weeks I decided to list again. WHERE ARE ALL THE BIDDERS?
I can't even get a DOLLAR bid on a beautiful Ruby Flash Dish.
posted on March 16, 2001 03:17:24 PM
<<This is probably the dumbest statement in a post:
Computer depreciation......... .20>>
Would you say that $1200 for a computer, with scanner is out of the question? It seems like a fairly average price to me.
I also would say it's fairly average for the typical user to replace or make major upgrades to the system at least once every 4 years. Further, the value of an outdated computer at the end of 4 years might be about $200.
Assuming the computer is used only 50% of the time for auction-related work, and that 600 auctions per year are run (my number of auctions is higher, but then so is the %age of computer time devoted to auctions), the actual depreciation-per-auction runs 21 cents.
$1200 purchase price less $200 trade-in value = $1000
$1,000 x 50% use for auctions = $500
$500 divided by 4 year life = $125/year
$125 divided by 600 auctions = .21/auction
posted on March 16, 2001 04:55:30 PM
your computer is going to depreciate just as quickly and expensively if you use it for nothing but typing papers or playing computer games.
For heavens' sake, at least I make MONEY out of my computer.
I think you need to go into a brick and mortar sales situation for a few years and see what you think of ebay's 'nickel and dime' dramas. You would have second thoughts right quick.
Your examples are only really relevant to people who are are new or lazy. Experienced sellers who have taken the time to find alternatives to AW's hosting, etc. will not have costs so high.
I would never sell anything for less than three times what I paid for it, BTW, that's called a tristone and it's just good business sense. Selling a 5 dollar item for 10 dollars is foolish and shortsighted (which many are when they start out, but hopefully they learn quickly.)
posted on March 16, 2001 06:12:54 PM
freejack writes:
>>This is absolutely one of the dumbest post I have read on AW, and believe me, I have read plenty of them...and...<<
Granted, ebay sellers are not the brightest bulbs in the box, but as long as you are paying eBay's fees, you shouldn't be talking about anyone else.
posted on March 16, 2001 08:41:27 PM
"Selling a 5 dollar item for 10 dollars is foolish and shortsighted."
Come again? If I sell 100 items a week for $10 each, my approximate profit of $450 is a laughing matter to you? I don't understand. I really want to know your logic.
With all due respect, and I mean this as politely as possible (Thanks for the sensitivity training minx47 !! ), why would anybody in their right mind spend all the necessary time and trouble and expense involved to try and sell $1.00 items in the online auction venue in the first place? No wonder you are frustrated and depressed!!
I think there needs to be a support group for ebay addicts who just can't let go. Come to think of it, maybe I need to attend as well!
Ah, I feel better....admission is the first step to getting help!
Politely and Respectfully Submitted with a Smilie in every paragraph,
Kaneen (not "Kaneen" on ebay)
[ edited by Kaneen on Mar 16, 2001 09:10 PM ]
posted on March 16, 2001 09:13:06 PM
Kaneen...Thanks for playing nice.....LOL....and well said.....polite and too the point....you get a gold star....Respectfully posted....
posted on March 16, 2001 09:25:40 PM
kaneen- I understand perfectly where packer is coming from. Once upon a time I had a round of auctions end with very few winners. Frustrated, I relisted all those auctions starting at $1 with no reserve. They all finished at prices well above what my original asking price had been. Sometimes it just takes multiple bids to attract the bidders' attention. I know that when I shop, I often skip over auctions that have no bids, but I ALWAYS look at the ones that have more than 3 or 4 bids, just to see what all the excitement is about. I know I am not alone in this. And starting your auctions off low helps to create some of that excitement. Sometimes the strategy works, sometimes it doesn't.
Packer, you're not alone, I've been letting a few things go for $1 too, and in general my bids are down. On the bright side, I think now may be the time to BUY inventory. I've found LOTS & LOTS of stuff to buy for resale on Ebay in the last week.
posted on March 17, 2001 08:28:22 AM
Quickdraw, you say $450 of that is profit but that's gross profit. How many hours did it take you to make that 450 dollars selling 100 items? How many hours would it take me to make the same amount selling 10 items? Our hourly wages would be VERY different. I personally think that your wage would be too low to be considered do-able by many ebayers, UNLESS you have a gazillion items that you just hit relist on, and can throw in a bubble mailer, and can give to your mail-person with no trips to the PO. If so, then you have a different situation. But in my opinion such situations are not typical of most Ebayers.
I have slaved for pennies on Ebay---in the beginning. Then I got smart. I deal in unique, collectible items, always have, for the past 15 years in flea markets and now on Ebay. Based on my experience, spending the amount of time it takes to list 100 unique collectibles each week for a $5 gross profit on each one would be foolish and shortsighted of me. With research, photography, scanning, cropping, adjusting, uploading, writing a description, then doing the aftersale duties, I would be spending every second of my life on Ebay sales and I'd be making a matter of pennies per hour! no way! I'd rather make $450 a week at a regular office job, 40 hours a week, no overtime, no buyers hassling me or trips to the post office. And I DON'T like office jobs, but I'd rather do it than get paid pennies for the labor 100 auctions a week would require of me.
Instead, I choose to have a nice balance of a part time office job and higher priced items which net me a couple of hundred a week with listing only a few items. I mail about 3 packages a week, and consider it barely any work for nice money.
Everyone's free to do what they want, but I'm also free to say it's foolish and shortsighted to slave for pennies per hour selling dozens of little items if you want to for that same 450 a week, when you can work a few hours for a higher hourly wage per week. If you want to slave for pennies, fine, but yes, i think it's foolish and shortsighted. exceptions certainly exist but it's often exceptions that prove the rule.
posted on March 17, 2001 09:32:37 AMIt's all about common sense:
I would pay up to $2.50 for an item I'd let go for $10.00
I would pay up to $7.00 for an item I'd let go for $20.00
I would pay up to $20.00 for an item I'd let go for $50.00
I would pay up to $50.00 for an item I'd let go for $100.00
It's all about how much of a bang you get for your time and trouble.
If you can only sell small items that have very limited high bid potential, then you have to bite the bullet and deal with the slave wages.
Choices?
A) accept the slave wages
B) upgrade to higher priced items
C) streamline your auctions--NO added BS features or services
D) greatly pad your s&h charge (haha)
All I read from this is that all these fees are going to knock the small item seller out of the business. 
