Secrets of the eBay

88 Secrets of the eBay Millionaires
Item Cost
Original cost of item approx. $0.60
eBay’s listing fee $0.35
eBay’s Final Value Fee (5.25 percent of closing value) $0.18
PayPal fee (if applicable) approx. $0.36
Subtotal $2.01
TABLE 4-2 eBay Sales Costs
Table 4-2, shown above, analyzes this sale to see where the profit is.
That’s quite a dramatic reduction for such a small purchase. But like
many (if not all) eBay sellers, Alan helps boost his profit through shipping and
handling charges. As anyone knows who has sold on eBay in any quantity,
there’s quite a bit of physical labor involved in carrying, photographing,
editing, packing, and shipping. A handling charge is reasonable—as long as
you don’t make it excessive. Personally (this is your author speaking), I try
to keep handling charges to $1 to $2; anything more could be considered
“gouging” by your customers and might get you some negative feedback.
Alan’s shipping charge for this single item breaks down like this.
● Weight: approx. 6 oz.
● Shipping cost, USPS first-class envelope: $1.52
● What Alan charges: $2.50
As you can see, Alan makes an extra dollar on the sale through shipping.
And on an item that sold for $3.50 to begin with, that’s a 30 percent bonus.
For many sellers, shipping charges cover the cost of packing materials,
which can be expensive. For other sellers, shipping and handling “bonus
profits” are the only thing that make an eBay sale worthwhile—particularly
if you start the bidding out at a low rate, such as 99 cents or $1, and you
only get a single bid. “Sometimes I’ll sell a charm for a single penny,” says
Alan. “But I’ll make it up in the shipping and handling end. I also sell screen
protectors for the Handspring Treo 650, and there’s a little more profit in that
than a 10-cent or 20-cent charm.”
For international sales (and he has many of them), Alan ships Global
Priority Mail for the most part. “Anything that’s big or expensive I ship only
through FedEx,” he says. “A lot of overseas people like Disney charms, and
everyone has to pay $6 shipping for those.”