Well stay tuned because we talk about one of the BIGGEST pitfalls new eBay store owners experience and how you can avoid it.
I didn’t always know how much I would make with my listings
When I first started browsing clearance aisles for things to flip, the hardest thing about it all was figuring out what I could sell for a profit based on all of the different factors:
- cost to me,
- previous sold listings and
- (seemingly endless) fees between eBay and PayPal
At first, I kind of sucked.
I would get excited because I just sold something and then realized soon after I didn’t make any money, (or hardly any money) because of shipping costs. Sometimes I was selling listings at a loss because I didn’t take into full account all of the fees that are charged to sellers – eBay final listing value fee, eBay shipping value fee, PayPal transaction fee…
To me, there were so many moving pieces and I didn’t do a very good job of controlling my margins, so I paid for it, literally. But being the stubborn person that I am I pushed forward because I wanted to get it right.
I started learning from my mistakes and calculating my shipping costs better. There were sizes and methods of shipping that I got really good at estimating, so I started only selling certain kinds of items because of shipping. I got better at spotting margins and I found myself walking away from items more often because either the margins weren’t there or the margins weren’t worth it to me.
But even though I got smarter, it was still tough taking the time to calculate margins on the go when I was shopping. I’d spend a lot of time just standing there, glued to my phone, flipping between eBay and my calculator. Not to mention, when I’d get ready to start creating listings, I would forget sales and shipping values for the multiple items I was listing. (I was a mess)
After a while, two things occurred to me:
- I can build a calculator specifically for calculating fees and
- surely I’m not the only one having this problem, right?
Which brings us to where we are today, the eBay Profit Calculator!
How to use the eBay Profit Calculator?
It’s really simple – the eBay Profit Calculator helps you figure out whether or not you are either going to make money if you list your item, or if you’ll make money on an active listing that hasn’t sold yet (it may make you want to revise your listings).
It does all of the hard work for you so that you can make informed decisions on what you list (and don’t list) in your eBay store.
All you need to do is give it the following:
- Give your calculation a name (so that if you take a screenshot for later, you know which item you were calculating margins for)
- Enter the item cost (if you’re in the clearance aisle looking for things to flip, be sure to add a little bit extra to the clearance price for taxes)
- Enter the listing sales price (be sure to look at the sold/completed listings on eBay to find a sales price to enter – I would suggest take the last three listings and average their sold prices)
- Estimate how much you think shipping will cost – this is a bit hard if you don’t already have experience shipping, but give it your best guess and estimate up to play it safe. There are resources out there you can reference to help calculate shipping, or you can do what I do and stick to items that you can ship in specific ways and can predict exactly the cost.
- Now, enter what you’d like to charge the buyer in shipping – Keep in mind that if you charge shipping, eBay will charge you a 10% shipping fee when the item sells, so it’s good practice to charge a little bit more to the customer to cover this cost. You do have the option to offer free shipping. If you that’s what you want to do, then enter $0 for shipping cost to the buyer.
- Once you’re ready, press the calculate button and see how much profit you’ll make.
- Decide whether or not you want to list the item.
It’s really that simple.
Some Final Thoughts
To reiterate above, if you’re playing around with prices/cost and you find a sweet spot, save the calculation by taking a simple screenshot. Pro tip: give the calculation a name in the form so that when you do take your screenshot, you know exactly which item to set those values to when you’re creating your listing.
Be sure to also take into account the type of listing – auction vs. flat price. If you want to take a gamble on an auction, it wouldn’t be a bad idea to be conservative on the sale amount – you don’t always get the amount you’re looking for from an auction.
I personally don’t run auction because of this, but that doesn’t mean they’re bad. Sellers can make some great money from auctions, especially those incredibly high valued products, like a first edition PSA 10 Charizard or a 1/1 Zion rookie. There are strategies for auction listings, but I suggest in the beginning when you’re learning the market and getting a groove with eBay, it doesn’t hurt to make things simple at first.
One thing to also take into consideration is the number of sold listings you see. Typically eBay searches for sold listings default to around 3-6 months worth of data. If you don’t see that many items sold in the last few months, that’s a very telling sign, so keep that in mind.
If you see only one sale in the last three months, it could that it will take some time for that item to move in your inventory, especially if you see at least 10 active listings for that same item. When you have a limit on the number of listings you can post, you don’t want to get stuck with slow moving inventory taking up space in your store. It also tells you for that particular item, it’s a buyers market, since there is more supply than demand. That means the buyer sets the price, so you may not make as much on that listing as you’d like.
Of course not seeing many sold listings could mean that you’re just getting in early on something that could explode in popularity, so keep the context of the item and its market in mind.
I know I’ve given you a lot of things to consider, but with practice and RESEARCH, you can make a little bit of side income from your eBay business.