how do ebay sellers still make money on cheap items after shipping?

As title suggests, I'm wondering how sellers based in Australia can still make money on a cheap item that costs around $5 with free shipping considering shipping fees with Auspost? Do they send the items by letter? Even so to ship the letter will cost 2 stamps ($2) and eat heavily into any profit margins.

I'm asking because I'm interested in starting an eBay store selling small items to begin with. Thanks a lot 🙂

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how do ebay sellers still make money on cheap items after shipping?


@victorianwarehousewrote:

As title suggests, I'm wondering how sellers based in Australia can still make money on a cheap item that costs around $5 with free shipping considering shipping fees with Auspost? Do they send the items by letter? Even so to ship the letter will cost 2 stamps ($2) and eat heavily into any profit margins.

I'm asking because I'm interested in starting an eBay store selling small items to begin with. Thanks a lot 🙂


firstly, welcome to the boards.  If you are only beginning your eBay selling journey then this is the place to help you navigate your way as answers and advice are provided by members and not eBay employees.  There is a wealth of knowledge to tap into by reading/posting on these boards.

 

If you are only just starting to sell then opening a “store” would be a waste of money as you will have selling restrictions as a new seller.  Some time back new sellers could only list ten items per month regardless of asking price.  Every member can get 40 free listings per month so paying a store fee per month is a waste of money.

 

Good idea to start selling small items.  Get your seller feedback going without having to outlay huge $ for stock.  Just sell a few things from around your home, things you no longer need or use.

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how do ebay sellers still make money on cheap items after shipping?

If a seller wants to sell small cost items (I mean as their main selling point), it seems self-evident that the key is quantity.

 

You'd want to sell lots and lots and lots of those small cost items, with a small profit. The profit has to be there in order for quantity to make any sort of sense. The items have to be cheap overall, so that buyers are not put off by a postage amount that makes them think, "Hang on, this isn't worth it. I'd be better off looking at the nearest Reject shop" or "Hang on, this isn't worth it. I'd be better off buying from a Chinese seller."

 

This whittles down immediately the sort of low cost items that you can sell and on which you can still make a profit. The items have to be small, light enough and small enough for them to be posted by letter rather than parcel, and made in such a way that they will survive letter postage to arrive undamaged. Packing and sending needs to be something you can do with absolute minimum of effort, because you'd almost certainly not be able to afford paying someone, even at minimum wage.

 

You should (I think) be able to list the items at a price that includes free postage. You must obviously make sure that the price you charge enables you to pay all the costs involved - PayPal fees, postage, eBay final value fees, plus a small amount that you should put away as your "self insurance" to cover items that don't arrive, go missing in the post, arrive damaged, etc. There are going to be other costs - packaging (if that is in addition to the postage cost), petrol to get to the post office to post these items, printer ink, wear and tear on the printer, your computer, etc., and internet. Some of them you can write off as "I'd be paying that anyway" (e.g., your internet costs). The profit you make above all of those costs should be sufficient that when multiplied by the volume of your sales will justify your time and effort. I think that takes time to build up - and keep in mind that in order for this business model to work, you're really looking at domestic rather than international customers, based on the cost of international postage FROM Australia. (If your items have a potential international market, then look at what costs are involved and whether or not you can compete effectively with Chinese sellers.)

 

Bear in mind that you'll need to keep good records of your incomings and outgoings, and that you must keep the ATO informed. Keep in mind the GST requirements once your turnover reaches a certain amount. Also consider that stock - if it's coming from overseas - will incur an additional amount later this year: "From 1 July 2017 goods and services tax (GST) applies to cross-border supplies of services and digital products imported by Australian consumers." You need to factor in these costs.

 

If you are receiving any assistance from Centrelink, of course, eBay earnings must be reported (another reason for good record-keeping).

 

As k1ooo-slr-sales has mentioned, you would truly need to be up to speed on the eBay selling process before you plunge into what could be a logistics challenge. Selling a few things here, a few things there, from around the house or things you've picked up dirt cheap from markets or garage sales, would be ideal to give you on-the-spot training with the basics of selling on eBay.

 

Decide how you're going to handle enquiries, requests, complaints, disputes. By this, I don't mean in a vague and waffly sense. I mean, have template replies ready.

 

For instance, if someone asks you for quantity discounts, what are you going to say and do?

 

If someone tells you their item never arrived, what are you going to say and do?

 

If someone tells you that the item they've received is rubbish, what are you going to say and do?

 

If someone negs you without contacting you beforehand, what are you going to say and do?

 

... etc.

 

If you have written policies and procedures in place before anything arises, you won't have to deal with the angst-ridden dilemma of "how do I handle this?" You will also find it easier to deal with the situation impersonally (although with courtesy, professionalism and an empathetic tone).

 

I'd suggest getting those policies and procedures written up (with template responses as brief as you can manage without compromising the solution-focused and buyer-respecting tone), and perhaps run them by fellow sellers here; there are several sellers who have this down to a fine art and whose advice is beyond price. You won't need to venture beyond this very thread to see the sort of sellers I mean.

 

Try to keep the "personal" out of eBay selling. Think of negative responses from buyers as an opportunity to examine your current policies and procedures (and the quality of your stock). Never post knee-jerk responses to negative feedback. If buyers seem to you to be trying to scam you (and it does happen, even with low-cost items - some say ESPECIALLY with low-cost items), deal with it calmly under your policies and procedures, and remember that you can always ask for advice here before you do anything if you need it. Responses based on emotion are usually a bad idea in business; it's better to focus on a profit-based and damage-limitation-based solution than to "make the scamming buyer very very sorry", so to speak.

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how do ebay sellers still make money on cheap items after shipping?


@victorianwarehousewrote:

As title suggests, I'm wondering how sellers based in Australia can still make money on a cheap item that costs around $5 with free shipping considering shipping fees with Auspost? Do they send the items by letter? Even so to ship the letter will cost 2 stamps ($2) and eat heavily into any profit margins.

I'm asking because I'm interested in starting an eBay store selling small items to begin with. Thanks a lot 🙂


firstly, welcome to the boards.  If you are only beginning your eBay selling journey then this is the place to help you navigate your way as answers and advice are provided by members and not eBay employees.  There is a wealth of knowledge to tap into by reading/posting on these boards.

 

If you are only just starting to sell then opening a “store” would be a waste of money as you will have selling restrictions as a new seller.  Some time back new sellers could only list ten items per month regardless of asking price.  Every member can get 40 free listings per month so paying a store fee per month is a waste of money.

 

Good idea to start selling small items.  Get your seller feedback going without having to outlay huge $ for stock.  Just sell a few things from around your home, things you no longer need or use.

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how do ebay sellers still make money on cheap items after shipping?

How do sellers sell cheap items ?

 

Answer - for various reasons they dont place a commetrcial value their time. Reasons for this include

 

* Unemployed / retired. Ebay is as bit of fun and they make a few extra dollars to help pay the ever increasing bills.

 

* They claim to be based in Australia, but really sell from low wage countries such as China where labor is cheap and postage is subsidised by the government.

 

* They start small, hoping to gain experience and build a viable business over time.

 

* They simply have not done their maths properly, are working long hours and wondering why they are not seeing a return from ebay. ( then come to the boards to complain that ebays fees are too high, sales too slow, ebay is dead etc. etc. )

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how do ebay sellers still make money on cheap items after shipping?

In addition to what's mentioned above... My lowest cost items are $5.90 (postage included,  sent as a large letter, including priority). I don't make a profit from those items, unless someone buys several at once, then I make a small profit, but they are very popular items and so they are my "loss leaders". 

 

They basically advertise me and my store to a narrow group of people (i.e. just those looking for that specific item), bring them in to browse where some people buy a couple of other things, some people don't. 

 

The profit-per item approach can be very limiting in some ways. Under a microscope, a lot of businesses have day-to-day occurrences of "win some, lose some", but what really matters is that the total at the end is enough of a win to make the business worthwhile, and the loss leader strategy can help with that (particularly if you sell a lot of similar items where it's likely people will look at other things and you can cultivate repeat business, if your business is primarly one-item, one time kinds of purchases, this strategy will be less effective). 

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how do ebay sellers still make money on cheap items after shipping?

Thank you for your kind words and advice. I notice that this board is very supportive.
Thanks to the other members who also replied below too 🙂 really does make everything a lot clearer to me now!
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how do ebay sellers still make money on cheap items after shipping?

It's all the little bits that turn into a big bit. A month or so ago there was a young police officer in Sydney, who was setting up an RBT with his colleague, and some numpty texting on a phone ran into them. The young officer lost the lower part of one leg. A close friend of the family set up a go fund me to try and raise $20,000 so his wife could take some time off work to be with him, but not lose their house in the process.

 

The donations poured in. $5 here, $10 there. Some larger donations, but most the cost of a cup of coffee or 2. Within a week, the amount had skyrocketed to over $100,000. It made me realise that lots of little amounts can soon lead to a big amount.

 

THe same is true for eBay. They may only be making say 10c from a low cost sale, but imagine 10c x 1 billion. 10c isn't much but a billion 10 cents is.

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how do ebay sellers still make money on cheap items after shipping?

If a seller wants to sell small cost items (I mean as their main selling point), it seems self-evident that the key is quantity.

 

You'd want to sell lots and lots and lots of those small cost items, with a small profit. The profit has to be there in order for quantity to make any sort of sense. The items have to be cheap overall, so that buyers are not put off by a postage amount that makes them think, "Hang on, this isn't worth it. I'd be better off looking at the nearest Reject shop" or "Hang on, this isn't worth it. I'd be better off buying from a Chinese seller."

 

This whittles down immediately the sort of low cost items that you can sell and on which you can still make a profit. The items have to be small, light enough and small enough for them to be posted by letter rather than parcel, and made in such a way that they will survive letter postage to arrive undamaged. Packing and sending needs to be something you can do with absolute minimum of effort, because you'd almost certainly not be able to afford paying someone, even at minimum wage.

 

You should (I think) be able to list the items at a price that includes free postage. You must obviously make sure that the price you charge enables you to pay all the costs involved - PayPal fees, postage, eBay final value fees, plus a small amount that you should put away as your "self insurance" to cover items that don't arrive, go missing in the post, arrive damaged, etc. There are going to be other costs - packaging (if that is in addition to the postage cost), petrol to get to the post office to post these items, printer ink, wear and tear on the printer, your computer, etc., and internet. Some of them you can write off as "I'd be paying that anyway" (e.g., your internet costs). The profit you make above all of those costs should be sufficient that when multiplied by the volume of your sales will justify your time and effort. I think that takes time to build up - and keep in mind that in order for this business model to work, you're really looking at domestic rather than international customers, based on the cost of international postage FROM Australia. (If your items have a potential international market, then look at what costs are involved and whether or not you can compete effectively with Chinese sellers.)

 

Bear in mind that you'll need to keep good records of your incomings and outgoings, and that you must keep the ATO informed. Keep in mind the GST requirements once your turnover reaches a certain amount. Also consider that stock - if it's coming from overseas - will incur an additional amount later this year: "From 1 July 2017 goods and services tax (GST) applies to cross-border supplies of services and digital products imported by Australian consumers." You need to factor in these costs.

 

If you are receiving any assistance from Centrelink, of course, eBay earnings must be reported (another reason for good record-keeping).

 

As k1ooo-slr-sales has mentioned, you would truly need to be up to speed on the eBay selling process before you plunge into what could be a logistics challenge. Selling a few things here, a few things there, from around the house or things you've picked up dirt cheap from markets or garage sales, would be ideal to give you on-the-spot training with the basics of selling on eBay.

 

Decide how you're going to handle enquiries, requests, complaints, disputes. By this, I don't mean in a vague and waffly sense. I mean, have template replies ready.

 

For instance, if someone asks you for quantity discounts, what are you going to say and do?

 

If someone tells you their item never arrived, what are you going to say and do?

 

If someone tells you that the item they've received is rubbish, what are you going to say and do?

 

If someone negs you without contacting you beforehand, what are you going to say and do?

 

... etc.

 

If you have written policies and procedures in place before anything arises, you won't have to deal with the angst-ridden dilemma of "how do I handle this?" You will also find it easier to deal with the situation impersonally (although with courtesy, professionalism and an empathetic tone).

 

I'd suggest getting those policies and procedures written up (with template responses as brief as you can manage without compromising the solution-focused and buyer-respecting tone), and perhaps run them by fellow sellers here; there are several sellers who have this down to a fine art and whose advice is beyond price. You won't need to venture beyond this very thread to see the sort of sellers I mean.

 

Try to keep the "personal" out of eBay selling. Think of negative responses from buyers as an opportunity to examine your current policies and procedures (and the quality of your stock). Never post knee-jerk responses to negative feedback. If buyers seem to you to be trying to scam you (and it does happen, even with low-cost items - some say ESPECIALLY with low-cost items), deal with it calmly under your policies and procedures, and remember that you can always ask for advice here before you do anything if you need it. Responses based on emotion are usually a bad idea in business; it's better to focus on a profit-based and damage-limitation-based solution than to "make the scamming buyer very very sorry", so to speak.

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how do ebay sellers still make money on cheap items after shipping?

Excellent advice countess. Your insightful contributions are a welcome addition to the boards.   Smiley Happy

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how do ebay sellers still make money on cheap items after shipping?

curtsey.gif... Whatever I contribute is definitely influenced by the information posted on these boards by others...

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how do ebay sellers still make money on cheap items after shipping?

Amazing read, a whole heap of knowledge and insight right there. Excellent advice which I will gladly put to good use 🙂
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