My fees to Paypal/eBay after 10 trading months......

blue_monkey_2

Last night I was doing my VAT return and I decided to check the rest of my accounts, I found I have done £56k in sales this year. I nearly fell off my chair when I saw 'Bank charges £7,500' (I use Sage, enter the numbers and forget all about then for a few months!!) I said 'What is that for' and thought I had made some sort of mistake so had to go back through and check what I had done wrong..... and then I found it. That is my eBay and Paypal charges/fees for the last 10 months of trading. It makes my eyes water just to think about it...... almost 1/8 of my money lines the pockets of eBay and Paypal. Which is nice. NOT

:eek:

raymond

How do you reckon it's your money ? Do you really think for a moment you could have made those sales without Ebay / Paypal ?????

nightswimmer

It's a tough one to have to swallow isn't it? I just tell myself, if it wasn't for that 1/8 that eBay/PayPal took, would I have been able to get the other 7/8? The answer in my case is no.

windswept

I know it seems high , I baulk at 10% fvf's from shop sales, but to put it in perspective, if you had an actual B+M shop, your rent, rates etc. would be much more than £7.5k.
I would love the opportunity to pay that much in fees, it means you are very successful! I would be thrilled with profit of anything more than about £6k, as I could then give up my p-t job and concentate on the business full time.
OP, I presume that this is your livelyhood ? you must be very proud of your acheivments. btw, tell me to bog off and not be so nosey, but how much profit is made from turnover of £56k %wise? I know that it depends on a lot of variables such as cost of stock etc. I try and maintain a net profit margin of at least 60%.

blue_monkey_2

Hmm, depends, I would have more time to do other things with the time and promote the website more which would save me the fees - but that is getting busier as we speak so maybe it'll be less next year but yes, I do think it is shocking amount to pay considering the service we get from them - reduced visability when you have a shop and now reducing visibility to US customers (which means I'll lose a lot of my Non-VAT rated sales which puts a little more profit in my pocket) so yes, I do think it is a lot to pay. I could have earned 4 times this if they had not reduced visibility of shop items but instead I am having to pay more for listings no-one sees - and no, I can't afford to list them all on the main core of eBay, because of the nature of my business it would cost me around £750 a week to list everything I have so then around 7/10 of my money would go to eBay then! The fees go up and the visibility goes down, I am working on the website and fingers crossed my customers see the return on that money as I can charge less for the stuff I have - I'd rather give discounts than give it to eBay!! But as with all things being a mum has to come first and then business 2nd so I have to swallow the fees to get some business for now, but considering that some of the business does come from other sources, around 15% of my money goes to eBay/Paypal overall and yes, I do think that is a lot of money for what we get!!

blue_monkey_2

Hi Windswept, no not nosy at all. Yes, this is my livelyhood kind of, my husband works to support us - but as above I am a stay at home mum and do eBay in my spare time (what is that, LOL) but mainly when the kids are in bed (as they should be now). I have not made any money since I started choosing to invest it all instead on stock, etc... One day I'll have the time to get on and promote things more and sell all I have for sale on the website but for now I don't have the time. I have declared a loss for the last 4 years being a sole trader as we put our own money in as well, but as I say, it is an investment as when my kids go to school (in 18 months time they will both be there) I'll have a 'ready made business that I can put my time and effort into 100% without having to worry about little ones during the day - I might even get my evenings back. They get more demanding as they get older so although i started out thinking I had a lot of time I don't really, justa few hours in the evening. I would love to have a shop but having a shop means having time which I would not want to work. I do honestly think if I worked for the same time I had a shop then i could earn 10 times this and then my fees would be 10 times this and then it would be cheaper to have a shop. I would love a store in one of the huge outlets that sees volumes of people looking to save money as I could earn a fortune. Then you have to trust your stock and store with staff though and I don't think I am quite ready for that to be honest.

Just a little for you though, my friend sells the same as me (that is how we met, she used to be competition) and she earns the same, she had the same idea about leaving work, etc.. but it just has not happened, because the market is always changing you have to buy new stock else people lose interest. Just for example, I am sitting on bras now that I paid 3k for, people have them on eBay for less than I paid cost - that is before fees and VAT so I reckon I am losing 1k on selling those items, if I can, and they were brand new released stock just 5 months ago. it gets very tiring when you find things like this. eBay is great but sometimes the worst thing that has happened to us unless you can sell in very high volume you are competing against people selling things for £1 profit after Tax (if they are paying it) and fees. I sell underwear and that means to make a 'living' I would have to sell 80 items at £1 profit a piece a day 5 days a week. I can't do that as I don't have the money to buy enough stock to buy that much stock to sell to have the turnover, it is all about how much capital you have to start out and those with big money make the market for all of us. But as I started 4 years ago with just £60 which was all that was left for our groceries I am far from complaining. one day my time will be here to make something more of mysef, for now I'll sit in the corner and watch the others going buy flogging their day out for £1 a bra, I'll sell as and when and be done with it!! )

ormus

i know someone who does quadruple that amount on ebay/paypal!
he did 22k last month alone!
his fees are mind boggling!

and he hates paypal with a passion......:)

blue_monkey_2

LOL, I can imagine. Has he tried to get another Payment Gateay? I have a handheld terminal and I pay 28p for each transaction with debit cards and a smaller percentage rate for credit cards than Paypal charges, if I had the time I would take payment over the phone and try to avoic these. I also have the option of anything payment gateway I am setting up - again, cheaper than Paypal but you might want to mention that to him.

22k on fees is just shocking though!!

ormus

sorry, i meant 22k in sales T/O.
cant remember his fees last month.
but you can get an idea!

windswept

We have recently got ourselves a merchant account, the fees are definitely cheaper than paypal, £5 per month fee + 2.5% a sale +20p. Unfortunately since we have updated all our listings to offer payment by card, we haven't had a single sale! ( in 2 weeks:eek: ).
I have managed to wangle our way to the very top of the list in ebay shops for our main line, thanks to a very nice mse'r, thank you apprentice tycoon:T, so people must not do much searching , everything seems to be stacked against ebay shops.
If our website ever takes off, I will leave ebay without a backward glance .

blue_monkey_2

Yes, me too, I do know what you mean. one little tip - might be too late for this time though, join the Market TRaders Federation (NMTF), it costs around £60 a year, but you get lots of beneifits and access to cheap insurance as well. I got my merchant account without a monthly fee (is usually £20 a month) but I do not pay this on either my internet trading or with my merchant account. you have to tell the you are a memeber though and that you do not usually pay as they won't give it to you otherwise!! But just a thought for the future. I beleive I get about 1.8% on my cards and 28p for debit cards, but it is something to think about. It is hard work with the website as so many people are doing the same things. however, we are thinking of specialising locally so who knows where it wil go. We got back of holiday a few weeks back and I am finsing it hard to get my act together and get things listed and start again - I will do I know, but for now it has been very slow. The funny thing is we put a note on the website that we was closed, everyone ignored it and we got more sales in a week of being closed than we did any other time. one lady called me the day I got back (I had been in 2 hours) asking where her things were and that I did not sound like a proper company. Through gritted teeth I wanted to tell her s** off but I kindly explained we chad closed the site and had posted a note to say this and that I had been back in the country justa few hours!! Typical though right.

They big up this new eBay express but with 1800 items for sale before I went away I did not sell anything through eBay Express at all. It has been pants lately - or is that just my shop??