Cheap 2 Pound Items are Terrible for Ebay Customers

A long time ago, I was at the thrift store and bought a nice colander for $3.  I initially bought it for myself, then figured I could sell it. Eventually, it sold, for $6. That was way too cheap, but, the fact was, other vendors were selling it online at a similar price. On Ebay, others were selling it for a lot more.

At $6, you’d think there’s a couple dollars profit, but the problem was, this object weighed just a little more than a pound, and it was bulky, meaning it had to be shipped Parcel Select Ground.  PSG is not that expensive, except when the product is so cheap. The shipping was more than $9!

The Ebay and PayPal fees are based on the total cost of the item + shipping. Ebay takes 10%, and PayPal around 5%, so 15% goes right into fees.  15% of $15 is $2.25.

So, at least $5.25 goes into costs.  That leaves a maximum of $0.75 profit.

That’s basically no profit at all for me.

The Customer Experience Is Not Good

The customer, on the other hand, is paying $15, most of it for shipping.

So they want it to be a good purchase.

The problem is, with a 75 cent profit margin, it’s going to be extremely difficult to deal with problems.

It was probably a bad decision to lower the price.

Compare it to a DVD

Suppose you bought a DVD from me for $5. I sourced it for .75 or $1.

The shipping is $2.75 or so for First Class.  Total price out the door is $7.75. That’s half the price of a new DVD. (Even on Craigslist, DVDs are priced from $2 to $5, and you can’t easily search those.)

Fees are around $1.20.  Costs total $2.20. So my profit is $2.80.  Though that’s a small number, the profit is nearly triple what I paid for the DVD.

This is partly why I’m not going to source anything that re-sells for less than $10.  It’s just not fun for the seller or the customer.

What Might Be Fun?

Buying lightweight items for $3 and selling for $10 gives you something like a $5.50 margin to work with. If the shipping is $2.75, life is great. Total purchase price is around $13, profit is around $5. Everyone can be happy.

Heavier items that weigh a few pounds and cost $30 can also make people happy. Shipping might be $10, but that’s not too bad. If it fits into a flat rate box, then it’s even better for distant buyers.

Very heavy items, like canned goods, can also be a good deal. The shipping will be $14 or $19 depending on the flat rate box size, but some canned goods are pretty expensive.  Tahini, for example, is $6 a jar here. Maybe a dozen jars can fit into a flat rate box.  That’s $72 worth of tahini, and $19 shipping.

I need to spend some time with a spreadsheet to help me understand what to buy, based on size, weight, and price.

Author: John

I can be reached at johnk@riceball.com.

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