It doesn’t matter how big your store is, everyone has to pay fees when they sell something on eBay.
Let’s pretend you just sold a watch on eBay for $180 and the money is on its way to your account.
Rather than guess, we are going to take a look at the exact expenses you will have to pay for this sale. Doing this will help us better understand how much profit you actually made from it.
The Basics of Expenses
Every time you list an item or make a sale on eBay, you have to pay fees.
In this scenario, you paid $125 for the watch. You now owe eBay a Final Value Fee (FVF) of $32. That’s the price they charge you for using their marketplace to place your product in front of millions of potential buyers. That isn’t it though, you also owe PayPal 3%, which is around $3.75.
Lastly, don’t forget about shipping. The item was sent through your preferred carrier (with tracking), costing you another $8.
The Final Total:
After calculating all of these expenses, it seems you made an operating profit of $11.25 on the sale. While this isn’t a huge amount of money, you did manage to make a profit.
Still, I imagine you want to do better.
To avoid repeating a situation like this, you need to learn how to properly price your products.
It takes a lot of practice but learning how to calculate your expenses as you price your products is an important skill.
If you can master this, you will learn how to get the most value out of your listings and grow your profit margins substantially.
Using an eBay Research Tool
Luckily, this is exactly what an eBay research tool like Algopix does (among many other things).
Let’s analyze another sale.
This time, one of your vendors is offering you a newer model of a watch they carry. We’re going to skip the guesswork and price this product properly.
The easiest way to accomplish this is by using Algopix’s Single Item Analysis in order to learn more about this watch.
It’s pretty easy to use too: Simply enter the watch’s barcode and your purchase price (see image below).
Perfect! Algopix has found this watch in 7 markets. This watch seems to be in high demand in the US – so only two markets are relevant to you: eBay US and Amazon US.
It seems that the recommended selling price on eBay is higher. That’s great. We already know your profit from selling on eBay will be higher than Amazon. Now, let’s take a deeper look.
Here we can see how much will it cost you to ship this watch.
By default, Algopix will assume you are based in the US. Because of this, it’s shipping calculation will estimate the costs for something like domestic shipping with a tracking number from the USPS.
After deducting the product’s cost, shipping, eBay fees, and PayPal fees, you can see that you are expected to earn $15.48.
That’s pretty good for a $64 sale.
Conclusion
The only thing left for you to do is to analyze the various products you can get from your suppliers to determine if they are profitable and worth stocking. A few searches on Algopix will save you a lot of time and it will help you increase your profit margins.
The most successful sellers understand the value of quality eBay research tools and how important they are to your bottom line.
Do you need to scan larger product lists? Algopix can do that too. Import your list and use our Multi-Item Analysis tool.
Fees are a normal part of the eCommerce experience. As a business, it’s important to learn how to predict them and put that data to use.
Happy Selling,
The Algopix Team
