Inside My eBay Numbers
The real profits from selling on eBay requires some analysis of the numbers. I've been selling on eBay for about 4 years and 7 months. I originally started to help pay for my daughters college tuition, so that she could avoid debt. Nowadays, I continue it because I like it and it provides some nice side gig money.
My eBay store: http://stores.ebay.com/Shoes-Help/Other-/_i.html?_fsub=1
To find my store: go to www.ebay.com
Go to advanced search. Search by seller. Type in shoeshelp
Let's talk real actual money, and what you can make selling on eBay.
First thing is purchasing stuff to sell on eBay. I started selling things around the house, and for the past 4 years I've sold only shoes. Occasionally, I will sell a hat or a purse, but 97% of all of my sales, are shoes. We live in a land of excess. Why not take advantage of that for your eBay business. You'd be shocked at the quality shoes that people give away every single day. So I purchase shoes at thrift stores, garage sales, estate sales, and other discount stores. I do not source shoes from a wholesaler, or go to retail stores like Marshalls. I source good quality used shoes for resale. I purchase shoes for anywhere from .99 cents to $15 or $20. It depends on the condition, the brand, the resale value, the size, the width, the popularity of the shoe, and the style of the shoe. All of those things come into play to determine whether or not I will purchase a shoe, and at what price I will purchase the shoe. It is a very learned skill to be able to ascertain all of that information from a pair of shoes in a matter of just a few seconds. It takes time. However, this is why it is important to develop a niche in eBay sales. The more you know about an item or product, the quicker you will be able to identify profitable sourcing vs. a waste of time.
At the writing of this post, I currently have 315 items for sale on eBay. This fluctuates daily due to regular sales. Of those 315 items, 306 of them are shoes. Approximately 240 pairs of women's shoes, and the rest are men's shoes. I do not sell kids shoes. In the past 12 months, I have sold 460 pairs of shoes for a total of just under $18,000.00. That's an average of about $39 per pair of shoes sold, which is a good solid per pair of shoes average. It is very important to continually track my per shoe sale amount. If that is around $35 to $40, then I'm great. So just to continue to help you understand the numbers. Let's take that $39 per pair of shoes sold, average, and let's dissect that and break that down for profits sake.
If the average sale of a pair of shoes is $39, then you are probably wondering how much of that is profit. Most shoes I purchase for around $6. I will also have to pay about $5 in fees to both eBay and PayPal every time a pair is sold. Shipping materials are a bare minimum. I get bubble envelopes free from the United States Post Office website, and for the shipping of larger pairs of shoes, I use a larger mailer that I purchase at a rate of a hundred mailers for $47. I purchase these every 3 months or so. Some people complain about the fees. I don't complain. EBay's platform is ready made with millions and millions of customers and it is well worth the fees that you have to pay for their services. Same goes for PayPal. Where else can I set up a store, sell my goods to hundreds of millions of people on a reputable platform? So no complaints for me on the fees, thus far. That takes us to $11 total for the purchase of the shoes and the eBay and PayPal fees. I also have to consider shipping. I do free shipping to the seller for nearly all of my shoes. This is obviously taken into consideration when I price the shoes. I always consider that there will be shipping involved that I will pay for, and this pushes me to sell the shoes for a slightly higher amount to cover the cost. Typically, that $39 pair of shoes will ship for an average of about $8.50. So $11 + $8.50 = $19.50. There are no more direct expenses involved. There are indirect expenses of my time, the shipping materials, the electric bill, the internet bill, etc. I do not count my indirect cost when figuring out my profit margins. As a business owner, I legally write off business expenses and that somewhat covers indirect costs of doing business. So I purposely focus on direct expenses. So we sell the shoe for $39 and we have $19.50 in expenses. That puts my profit margin at about 50%. So $19.50 goes into my pocket for every $39 worth of goods sold. A 50% profit margin, minus indirect expenses, is a hefty profit margin, by any business standard you use. The whole point of the business is to keep expenses low. I've estimated that if you consider some of the indirect expenses involved, than my specific profit margin is more like 45%. Still a very nice profit margin.
Ebay is a numbers game. You've got to understand your numbers and work to lower expenses while increasing your sales. Your numbers will benefit when you have proven processes in place that are efficient, duplicable, and concise. This takes trial and error, and it takes learning and understanding your customers, your product, and techniques that improve your sales. It's a business, so run it like a business. If you want to sell on eBay just to play around with it, be my guest, but if you want to make money, you've got to approach it precisely with the numbers in mind and fully at the forefront of what you are doing. All of the calculations I've mentioned are done in my head at the purchase of the shoes. The reason I said I purchase shoes from .99 cents to $20, is because I have to run the numbers in my head before I purchase the shoes. The projected numbers that I run in my head, will always make the purchase a go, or a no go! I buy shoes to sell shoes, so the buy is the key factor, and it takes time, experience, and knowledge, in order to make correct sound purchases that fall in line with a profit margin that makes the purchase of a pair of shoes right or wrong.
I've made mistakes, messed up, lost a lot, miscalculated a lot, and made many errors, over the years. It's these mistakes that have helped my business flourish, be sustainable, and continue to be profitable. The key is to find a niche, learn it, understand it, and set processes up to maximize your profits. Understand the numbers, and take it seriously. There is money to be made on Ebay, but you've got to dig into the numbers in order to increase your bottom line profits.