Profit margins

mcja

That's what I want to do it for, I would still work part time, just wanted to do this to back it up. Having worked it out I now have it on paper as:

0.66p per item to make
1.20 selling price

0.99 insertion fee
1.20 final value fee (assuming selling 10 at a time)
20p PayPal
4p PayPal (3.4%)

Profit £2.61...bummer!! Less fuel etc. I am working on p&p charges paying for themselves.

Strapped

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.

Get yourself a micropayments account and only pay 5% + 5p per transaction.

campdave

chancesare wrote: »

You may need another maths lesson.

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

99p is the sale price, and does not include postage cost. I know what I make, thanks for your help.

campdave

Strapped wrote: »

Get yourself a micropayments account and only pay 5% + 5p per transaction.

NOt heard of these - can you point me in the right direction?

chancesare_2

campdave wrote: »

99p is the sale price, and does not include postage cost. I know what I make, thanks for your help.

Your post inferred the amount you received was 99p.

I am sorry if I misinterpreted that. But your maths is still wrong.

However, you are paying 20p to paypal when you don't have to. Not good business sense whichever way you look at it.

campdave

chancesare wrote: »

But your maths is still wrong.

We'll have to agree to disagree. Thanks for the micropayments tip, I will have a look.

soolin

My net profit margins depends on my items. I have some bread and butter goods that I churn out at less than £1 a go profit, but they are easy to buy, easy to wrap and foolproof to sell and I can sell in quantity. On other items my mark up is much higher but I have to spend more time wrapping and photographing them so may list them as auctions and limit them to a couple a day.

I currently have quite a few MVL running and a few basic auctions and go to the PO every single day.

Just remember to register with HMRC, choose your stock carefully as it is best to avoid items that traditionally have a high rate of customer returns.

Strapped

chancesare wrote: »

Your post inferred the amount you received was 99p.

I am sorry if I misinterpreted that. But your maths is still wrong.

However, you are paying 20p to paypal when you don't have to. Not good business sense whichever way you look at it.

Give him a break - we all started somewhere!

campdave, take a look at this: https://www.paypal.com/webapps/mpp/micropayments

ETA: Saving you £180 permonth on 1200 transactions! :-) Drinks are on you...

Personally, I'm moving away from the stack-it-high-and-sell-it-cheap model, because it's limited by the amount of parcels you can physically do as a 1-(wo)man band. I do have a few low price lines though which are great feedback builders.

soolin

Strapped wrote: »

Give him a break - we all started somewhere!

campdave, take a look at this: https://www.paypal.com/webapps/mpp/micropayments

Personally, I'm moving away from the stack-it-high-and-sell-it-cheap model, because it's limited by the amount of parcels you can physically do as a 1-(wo)man band. I do have a few low price lines though which are great feedback builders.

I'm the same, my bread and butter items give me the turnover I need to maintain TRS and water down any lower stars I might get elsewhere.

I would only sell low profit margin stock though that is an easy sell, mine just get bunged in a jiffy bag and posted - if I have missed the PO run I put them straight into the post box to try and achieve a maximum of 48 hour delivery even on 2nd class.

Strapped

To answer the original question though - imo, 40% gross profit after fees and postage is the absolute minimum to aim for. On lines with high potential return rates, it needs to be much higher. (And just don't even think about clothes lol). For low price lines, don't worry too much about the %, look at the absolute profit (ie you don't want to be stuffing envelopes for a few pennies a go).