Friday, December 28, 2012

Can you earn a living with Ebay

So you find yourself in the same boat as so many of us, rejected by standard employment opportunities - a Corporate Reject. As you scan the non traditional skyline for a glimmer of hope to earn cash, you come upon Ebay. You've sold some stuff on Ebay, a cell phone here, a video game there but it was all used item that you sold for way under value. Aside from selling all your possessions, can you really sell on Ebay and pay the bills? You can, and you can make big money, but it's not easy. Sorry, but that's the answer.

I have been selling on Ebay with a fair amount of success for the past 2 years. I have friends who have been selling for 10 years and their Ebay business supports them. Before you start, here are some facts to consider: In whatever category you choose to sell in, Ebay will take 25% of the gross and that includes the shipping cost. This is a fact of selling on Ebay. No matter what the fee calculators say, it will end up being 25%.

 Here's an example: For items that costs you $3.50 a piece lets say you will be selling 20 of them.

  • Shipping weight - 1 oz USPS First Class large envelop shipping cost of $1.64 through Ebay (a perk of selling on Ebay) 
  • The packaging costs you $2.50, this includes the envelope, packing, paper labels, ink to print the labels and your time to pack and ship.  
  • Time spent listing the item: if you are quick, you can take the picture, crop and correct it, write the description for Ebay in 15 minutes: cost of $5 per item.  
  • Your total cost in this piece is now $12.64 
  • The fee for listing your item is 50 cents if you list it at auction.  
  • Half your  items sell for $15, the other half do not sell - Ebay final fee is 1.50 each 
  • Your Ebay fees will be $15.00 sold items  + $5 for unsold items total $20 
  • Now we add the Pay Pal fee of 2.9% - 44 cents each sold item for $4.40. 
  • Your cost for the 10 items that sold is 126.40 and you sold them for a total of 150.00 for a net loss of 80 cents. (we will assume the other 10 items will sell the next time they are listed)  

Ebay has the highest fee structure of any auction site but they also have the highest visibility.  You are more likely to sell items on Ebay. To make money you need to figure the costs and how to work within the fee structure.  Ebay has a Fee calculator on it's website - it's hard to find so here's the link

If you are not totally turned off by the fees there is another little pitfall with Ebay I feel compelled to mention. They like to discontinue categories. This essentially puts you out of business. They do this as an edict from corporate with no discussion and in a very short period of time. Last year there were many sellers of electronic images doing a brisk business on Ebay, they were summarily shut down in a two month time frame. There is no warning so you can't plan for this kind of action. If you sell on Ebay, you do so at the pleasure of the Corporate King. Another fine point is that Ebay is courting the big box stores like Wal-Mart. Their attention is not on the little seller anymore. This is sad because it is the little seller that made Ebay what it is today.

Is Ebay the only player in the arena? The answer is no. Etsy is a vibrant craft and vintage item market and it is fast approching Ebay for visibility. The fees on Etsy are much lower and Etsy does no offer auctions so if you sell on Etsy it's like selling in a large retail boutique. For Etsy you open a store, list your items with a listing tool that is fast (5 minutes tops) and your items enjoy being visible for one fee of 20 cents for 4 months. Final fees are 3.4% of final selling price excluding shipping.  Much better deal here. There are many other sites for non handmade like Bonanza. Their fee structure is even more interesting - Open a booth for $10 per month, this give you background burns and access to google analytics to see how many people are viewing your items -  final fee of 3.5% with a minimum fee of 50 cents. The minimum fee pushes Bonanza items up over the $10 mark and it doesn't have nearly the page view that either Etsy or Ebay have. There are more but Etsy and Bonanza are the two I have experience with. Bonanza has another interesting feature - It will import items listed on Ebay and Etsy into your booth on Bananza. No need to list twice.

If you are still interested after all this news. I suggest spending some time with the blog Ecommercebytes.
They report all the news on E commerce on a daily basis and are a great source of information on this industry. Selling on line is a great opportunity but you must go into it with your eyes wide open, it can put dinner on the table or leave you homeless.

Disclaimer: the fees and fee structures are to the best of my ability as of the day posted. Please visit the fee structure of each auction site you wish to list on. 


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