Monday, September 3, 2012

The Price Of Doing Buisness On eBay

I have been told by many people in the past to “put it on eBay” under the notion that you can sell just about anything on eBay. While I believe it to be true to a degree, I’m starting to reconsider that piece of advice. 

Is It Really Worth It

Though I know for a fact that I am not actually “making” money off eBay as of now, because everything I have sold thus far has went for less than what I had original spent to acquire it; being the geek I am, I still want to know approximately how much am I getting for my efforts by selling on Bay. 

As you can tell the majority of my items for sell are action figures and, as a matter of fact, action figures are the only items have been able to sell. Now though the most recent figure I have been able to sell went for $4.99, it would be unrealistic for me to think that I can sell all my Marvel ToyBiz figures for the same price. Some of the more popular characters might go for $4.99, but I’m guessing if I really want to move these figures I’m going to have to drop the price below $3.00 apiece; this is partly due to the way eBay is setup. Being a little optimistic and for the sake of this argument, however,  I’m going to calculate how much I would be getting back for a Marvel ToyBiz figure that sold at $3.49; the price which I have listed the majority of them for the last time they were on eBay.

Let’s Calculate Those Fees

EBay charges a fee of 9% based on the closing total of your auction for toys. Now, this “total” is exactly that. It not only includes the final bid price of your auction but also the cost of you shipping the item.  So for my $3.49 figure which I charge $7 for sending it through priority mail, eBay charges me $0.94.

$3.49 + $7.00 = $10.49 total
3% of $10.49 = $0.94 eBay’s first fee

Yes, $0.94 is only the first fee. If you are selling on eBay, you are more than likely accepting your payments through an eBay owned company known as PayPal. EBay’s PayPal charges you another fee of 3% based on the “total” you received for your auction, plus $0.30. So, for my example auction that fee comes to $0.61.

3% of $10.49 = $0.31
$0.31 + $0.30 = $0.61 eBay’s second fee

So for my auction of a $3.49 figure my total fee is…

$0.94 + $0.61 = $1.55

Now, $1.55 for a “total” of $10.49 doesn’t seem that bad. However, let’s remember $7.00 of that “total” actually goes to shipping. In fact at $7.00, the actual shipping cost is eating in to my sale even if eBay didn’t charge sellers a fee for shipping. Walking in to the post office to send a package through priority mail with a delivery confirmation slip is going to cost me $7.05. Some of you might say you can save yourself a few cents if you pay for your shipping online, but if we are really going to be nit-picky the cost of packaging materials and the price of gas when you drop of the package at your nearest post office will basically make any of those “savings” disappear. In order to make things a little simpler, however, I’m just going to ignore those extra costs and say $7.00 covers it. So, that’s an eBay fee of $1.55 for a $3.49 sale.

Putting the price of the fee into another perspective, $1.55 of $3.49 is 44%. When considering only the fees that eBay charges me for a “successful” auction of $3.49, I would receive a grand total of $1.94.

What Can I Do To Make It Worthwhile

Now to be fair, I guess there are a few options available to me to offset these fees.

Raise Prices

One thing I can do is raise prices, after all as I stated earlier the latest action figure I did manage to sell closed out at $4.99. However, that was for a popular character in which the lowest price from a “top-rated seller” came in at more than 4 times as much, and my auction didn’t even warrant enough attention to so much as draw in another bid.

As a new eBay seller without much feedback, if I raise my prices anywhere near the ball park to that of one of these “top-rated sellers” I pretty much guarantee that all the figures I own will stay firmly in my possession. Buyers don’t really like taking chances on new sellers who haven’t already received hundreds of positive feedback unless the price for the item is really good and really low.

Of course there are ways you can fix that feedback problem by selling hundreds of single paperclips; which is a practice I have seen some gold-star sellers do in one form or the other, but it is cheating the system and supposedly “against the rules”.

Change Shipping Options

Another thing I could do is change my shipping options. That will reduce the fees a little since eBay charges you for the cost of shipping.  The problem I have with that, however, is getting boxes. Unless you buy in mass bulk boxes are pretty expensive. If I add the cost of a box and the price for shipping it as a first-class parcel it would come pretty close to what USPS charges for their priority mail service anyway.  For only a dollar more I think a buyer would rather go with the seller that gets them their item quicker.

To top things off, I have seen plenty of “top-rated sellers” who charge more for the economical shipping option than I do for shipping the same item through priority mail. Even with their exuberant shipping prices I can only assume that they still manage to sell plenty of their items in order to achieve their rating, while I would consider myself to be lucky to have even sold one item during the entire month.

Show your commitment and purchase an eBay store subscription

Buying a subscription fee for an eBay store reduces eBay’s fees…slightly. A fee rate drop of 1.5% does not sound very appealing to mean when I don’t put up hundreds of items a week for sale. This option might be good maybe if I decided to make the eBay store my life. Then again I somewhat get the notion that it would still be difficult for many of the mom-and-pop e-retailers to make a decent living if they chose to go with eBay as their only outlet option.

In Conclusion

Though my calculations did show that I would get some money in return for selling my toys on eBay, the whopping return of $1.94 for a $3.49 auction sort of makes me feel like I might be wasting my time taking photos of these items, writing up descriptions, and posting them online; especially when I believe that I’m going to have to lower my prices further in order to move them. Add to that fact as I lower my prices I also raise the percentage eBay takes as their cut for each sale, and I start to feel a little more disillusioned with selling on eBay. If I sell an item for $4.99 with my current shipping options eBay’s cut would be 35%. At $3.49 an item it becomes 44%. At $2.99 I have to shell out more than 50% of that price to eBay.

Now, I’m not trying to get rich here; but seriously I would rather just put up a garage sale sign, place them in a box, and sell them for $2 dollars a piece on my lawn. For my time and effort in doing so, I feel I would be getting way more back than what I could be getting from eBay. I’ll even be saving on the cost of gas it would take me to drive back and forth to the post office when shipping an item. Selling on eBay is definitely not all that it’s made out to be.  As a new or casual seller the odds are stacked up against you to make a successful sale with the hopes of getting a decent return for your item. 

Yes, there are a lot of successful so called eBay power-sellers out there. However, you don't simply become a power-seller without putting in a lot of time and also a lot of your own money first; especially, when trying to building up your reputation o be a “top-seller rating” in the beginning. To be honest, it’s like that for any successful business and you can’t really blame anyone for that.

In an effort to increase their own revenues EBay, as many of their forum members can attest to, has been making changes to their policies to encourage (or force depending on how you want to look at it) more of their sellers into becoming power-sellers. Unfortunately, a lot of the small time sellers who have been on eBay for a long time and who have helped the company in becoming as big as it is today, don't have the means to step up their business in this new environment and as a result have been feeling the squeeze. So, what do you do when you only have the means to pitch a tent in the parking lot of an outlet mall, while bounded by policies which reduce your profits to practically nil as you try to maintain some form of competition with your competitors?

Personally, I will still continue to try and sell my collection on eBay, but I have serious reservations against putting up anything for less than $5 as I feel it will simply not be worth my time and effort. I’m just going to hope that my decision to do so doesn’t drop my chances of making any future sell on eBay lower than what my chances are of hooking up with Kate Upton.

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I've been a huge comic nerd for a long time. It was my dad who first introduced me to comics when I was very young. He gave me his small collection of comics at the time and ever since then I’ve continued to add to it. Over the years I have collected hundreds of comics, toy figures, and other memorabilia. And though I would really love to hang on to them, due to unfortunate circumstances I have to let them go. *sigh* So, the purpose of this blog will be mainly to showcase what I have up for sale on eBay. Most of the items will be comic related memorabilia but I also have a few other “types” of collectables that I hope to be getting rid of as well. And every once in a while in between the post of what I have for sell I may just post some of the crazy ideas that pop-up in my head which of course you can simply choose to ignore. Thanks for stopping by.