Profit margins

mcja

Hello,
Having lost my job yesterday I am thinking about going into business using ebay as well and other selling methods.

Can I ask what profit margin you aim to make per item on ebay. I know and understand it depends on what you are selling but I would be looking at low price high quantity. Makes sense on paper but just need some advice from people that do it day in day out.

Thanks all.

campdave

I make items that I sell at 99p each that cost me about 6p to make. Profit about 70p once fees and postage paid.

Approx 1200 orders per month, about 70% of those single items and the rest multiples. Higher profits on muliples as only having to pay the paypal 20p fee once.

chancesare_2

campdave wrote: »

I make items that I sell at 99p each that cost me about 6p to make. Profit about 70p once fees and postage paid.

Approx 1200 orders per month, about 70% of those single items and the rest multiples. Higher profits on muliples as only having to pay the paypal 20p fee once.

You may need another maths lesson.

99p sale will not generate 70p after postage and ebay and Paypal fees.

mcja

This is exactly what I need to know. Campdave, how do you work out that profit level. Also can you confirm what you mean about only pay 20p once...if I list item with x amount available, and sell them all, surely I would pay fee on every sale not just once.

I am sure this is my naivety showing but this is why I am asking for advice

Claire

lindseykim13

It depends what your selling, i go for lower quantity but higher profit. It's not worth my time if it's less than £5 profit so thats my minimum.

mcja

Thanks, lindseykim. I might need to have a rethink about things but that's why I needed advice! please keep advice coming.

Claire

lindseykim13

mcja wrote: »

This is exactly what I need to know. Campdave, how do you work out that profit level. Also can you confirm what you mean about only pay 20p once...if I list item with x amount available, and sell them all, surely I would pay fee on every sale not just once.

I am sure this is my naivety showing but this is why I am asking for advice

Claire

I think they meant if someone buys more than 1 they only pay the paypal fee once.
You offer a combined invoice and then there is only one payment to go through paypal. Hope that makes sense. You still pay your percentage to ebay.
I find it very difficult to undertand how people can make a profit on 99p sales. It would be very low.
However the postage costs charged needs to be taken into acount as 10-20p on top of actual postage could make a huge difference.

chancesare_2

mcja you pay a listing fee to Ebay to list the item, a final value fee when it sells. Then you pay paypal a fee for the transaction, which is usually 20p plus a percentage of the amount. I'm on a merchant account so can't tell you but from memory it's something like 3.4% but someone will confirm.

Then you have to factor in the postage, item cost, packaging.

If you sell low value items, you need a micro paypal account which has fees set accordingly but the fee is only 5p plus a larger percentage.

So in the example campdave gave (where he clearly doesn't have a micro account) then on his 99p, immediately at least 20p will have gone to Paypal. That's before listing, final value fees and postage. Even on RM business PPI rate, his maths don't add up.

mcja

Sooo, let me get this right in my head as what I was getting excited about may be a silly pipe dream...if I spend 66p on a product, sell for £1.20 plus postage which I was working on a charge what it costs. If I sell 10 to one customer, I then have 20p selling fee as well as the insertion fee for the INITIAL posting of however many items I have available. So my clear profit would be £5.20. Am I missing a trick or being a bit simples on this one? Be honest, I need the advice as this is a big thing for me. Sorry if I am asking really stupid questions that I should know and I really appreciate all your help.

Chancesare just retread your post..hmm, I know I am wrong with my workings now, back to the drawing boards for margins I think!!

lindseykim13

Example being i pay £1 for something i can sell for £8ish by the time i have paid my listing 40p bin, 80p fvf ( a little less currently as i'm trs so get a discount) paypal fee 50p ish. Paypal always take fees off the total paid so includes your postage too. Packaging 5-10pish.
You then have to factor in your time, petrol, printing ect. although you can't charge for these things on your postage price or all hell will break loose. Sore subject on this forum lol
Thats roughly my £5 profit.

For me though it's a part time job i can work around the kids and earn some money towards hols ect. It's never guaranteed money though-although not to big myself up you've got to know what your selling and if you can turn a profit from it.
Some people have the eye for it, others don't.

AquaJen

I used to sell high quantity with low profit but it was so much hassle, a lot of time, packing, trips to the post office with grumpy OAPs behind me waiting to get their pension when I have 20 parcels to post... Now I found something else to sell and do low quantity with big profit, happy days.

Edited to add, I use it for the same reason as above... my ebay sales pay for my holiday every year, I don't make enough to live on by a long way. Its just there for treats, a bit of extra money on the side.