Question
I was reading someone's blog, someone I don't really know, and found this:
Now eBay. I know how to buy on eBay. I was thinking, hmm, maybe I could sell on eBay. Maybe I could come up with a sample item to sell. Try it out. Now, this is based on what I looked up today, and I haven't taken the eBay educational materials, just did some basic research. So 1) this is based on a rather superficial research, and 2) if anyone out there knows this stuff, please do feel free to set me straight.
Fees. There seem to be so many fees. Picture fees, insertion fees, final value fees, buy-it-now fees, reserve price fees... this much depending on that amount, this percent up to that and this percent over that. And the tools, ten bucks a month for that or twenty-five a month for the other thing. I estimated that if I sold ten items and hoped to make $500, and set a reserve price of $40, that I would end up owing eBay more than ten percent of the final sales value. And then there are fees for Paypal or whatever else is used to process payment. I don't understand how anyone makes money unless they sell really cheap crap for a lot of money. No wonder some folks sell low and smash you over the head with shipping costs. Unless one is a high volume seller, I'm not sure what the point is.
But for high volume sellers they do have some seriously nice tools. The eBay store thing is brilliant. It works. I've used sellers' eBay stores and bought more. But tools that cost up to $300 a year... yikes.
Some interesting points from an outsider looking in.
Answer
From an outsider with little retail and business experience?
Rent,
gas,
electricity,
insurance,
advertising,
store fixtures,
employees,
taxes (local, state, employee),
telephone....
Think those take more than 10% of a retail store's gross?
In the convenience store industry 15 years ago, the target Gross Profit on an
item was 32%. That means 68% of the selling price was targeted toward COSTS, not profit.
And that is HIGH in retail!!!
I am quite happy with having such a LOW overhead in my business.
(Yes, I am one of those RARE sellers who is HAPPY with eBay.)
Answer
My son has the day off and I asked if he wanted to ride along with me to one of my mall booths. As we were leaving the mall, he asked me how long before I open my own shop/mall. I told him the short answer was when pigs fly.
Answer
Larruone;
You make an excellent point.
Cost of Sales ~ 10% would stun a B&M retailer. In addition you could factor in shrinkage, common area maintenace, etc..
OTH, the traditional retailer has push money, spiffs, co-op allowance.
This prospective seller does, however, show how nickle and dime the process is.
And nickle and dimes add up.
I'm going to use this in next week's show.
Here's a link I found, I believe on this board, re eBay and PayPal fees that this seller should also examine: eBay & PayPal Fee Chart
Answer
Larruones is correct, I dream of ever having my overhead in my real store at ten percent of sales, because you would NEVER see me here again, I would be frigging rich. Well, I would be here, but not sure where else I would be, I'd have staff, and servants and maids and chauffeur....
my sales would have to increase hum,.....A LOT to make overhead only 10% of it