How does someone make a profit on ...

peter_the_piper

RHemmings wrote: »

EDIT: Wait a second, these batteries are 100% genuine. It says so in the listing title!

100% genuine maybe, but genuine what?

Brooker_Dave

buglawton wrote: »

The clever bit for Argos is, it gets footfall into their stores, hence Argos charges little to EBay for the service.

Given Argos are flogging themselves off to anyone willing to buy, you have to wonder what lies ahead for retailing in this country?

If Argos can't make any money at it, and ebay/amazon sellers are just busy fools working at a loss?

RHemmings

Brooker_Dave wrote: »

Given Argos are flogging themselves off to anyone willing to buy, you have to wonder what lies ahead for retailing in this country?

If Argos can't make any money at it, and ebay/amazon sellers are just busy fools working at a loss?

Is it leading to some sort of shakeout? Where many businesses will go to the wall, and those remaining will face less competition and be able to raise their prices?

Brooker_Dave

RHemmings wrote: »

Is it leading to some sort of shakeout? Where many businesses will go to the wall, and those remaining will face less competition and be able to raise their prices?

But legions of sellers still seem to be joining the sell on amazon/ebay at a loss plan?

I would have thought that ebay and to a lesser extent amazon depend on the loss making mugs for revenue?

The only people who seem to be making a living flogging Chinese tat on ebay/amazon are the Chinese, and they can only do that through VAT fraud.

shaun_from_Africa

RHemmings wrote: »

UK Seller selling 10x CR2032 battery for £1.25 free postage, Click & Collect at Argos. Paid for by paypal.

You can buy these batteries on AliExpress for $711 (inclusive of delivery) for 15,000 and that works out at about 3p each and I wouldn't be surprised to find that you can get them even cheaper.

The ebay sellers may only be making a few pennies per sale, but I doubt if they are losing money.

Brooker_Dave

shaun_from_Africa wrote: »

You can buy these batteries on AliExpress for $711 (inclusive of delivery) for 15,000 and that works out at about 3p each and I wouldn't be surprised to find that you can get them even cheaper.

The ebay sellers may only be making a few pennies per sale, but I doubt if they are losing money.

So £1.25 less

30p cost

less vat on cost 6p

Less large letter 95p

Less paypal fees ?

Less ebay fees ?

Less envelope ?

Less labour cost?

Big fat loss.

ballisticbrian

So £1.25 less

30p cost

less vat on cost 6p

Less large letter 95p

Less paypal fees ?

Less ebay fees ?

Less envelope ?

Less labour cost?

Big fat loss.

This is how a normal small business would view it but you need to apply some voodoo economics.


Company is told by the courier that they need to send x million items in order to get delivery down to some cheap rate.


Company can't make x volumes or expand premises quickly enough in order to do it.


Company looks for an item which is small and quick and easy to pack that it can sell in large volume to fulfil the couriers request to send x million items.


The company does not consider that it makes no money on these items because the purpose of selling the items is not to make money but to bring down the cost of sending all their other stock.


So take the courier savings in total and divided by the number of widegets sold at cost price = the overhead in items sent in order to provide the cost saving.


The problem comes when other businesses, particularly people starting out and other people left stuck with stock, some scratch their heads and say "how do they do that?" but still others try to compete basically either through ignorance or defiance.

GabbaGabbaHey

Brooker_Dave wrote: »

The only people who seem to be making a living flogging Chinese tat on ebay/amazon are the Chinese, and they can only do that through VAT fraud.

I imagine that far more of their profit is derived through state-sponsored postage than through VAT fraud.

RFW

Brooker_Dave wrote: »

Given Argos are flogging themselves off to anyone willing to buy, you have to wonder what lies ahead for retailing in this country?

If Argos can't make any money at it, and ebay/amazon sellers are just busy fools working at a loss?

I'm assuming you're talking about Sainsbury's buying Argos and the other companies within that group. It gives Sainsbury's a massive delivery network and will, once complete, put them in direct competition with Amazon. Retailers are like they have always been, some are doing exceptionally well, others aren't.
As for the 'busy fools', I can't argue that there are some but to give the impression that no one is making money on either platform is nonsense. Last time I checked I wasn't Chinese and I pay a hefty chunk of VAT but still managing to make a healthy living, selling on Amazon. Not sure I could do it on Ebay again but I do know others who do.

RFW

Brooker_Dave wrote: »

So £1.25 less

30p cost

less vat on cost 6p

Less large letter 95p

Less paypal fees ?

Less ebay fees ?

Less envelope ?

Less labour cost?

Big fat loss.

Quite a few ways of getting costs down here for a big seller. The batteries cost pennies and could go as a standard letter. So you could easily get postage and item cost to around 60-70p. A micro account has Paypal fees at under 7p, Ebay fees are 12.5p on £1.25. So you're at under £1 overall costs.
It's obviously not ideal but the seller may well stock items that use these batteries so sells them as a service rather than a profit. Kitchen scales tend to use these a lot, so if the seller earns a few pound on a scale, earning on batteries is immaterial.
A few years back I bought some items that had dead batteries in, I bought a few thousand batteries at a good price, fixed the items, earned money on them and then flogged off the leftover batteries at any price.
That's not to say there aren't plenty of idiots selling at a loss but there are other reasons why people will do it.