How eBay can make you LOSE money on coins/bills

If you want the main point, and a formula used to NOT lose money on eBay, skip to the bold text below!!

http://www.ebay.com/itm/NEW-Style-1...em46144a5b51

In this sold listing, the seller sold 10 NEW 2009 $100 for $1,130.6 after shipping.

(These new bills are very popular)Is that a profit? Or a loss?

The Fees involved are:
10% of selling price + shipping for eBay
2.9% + $0.30 per transaction

The percentages can be written as 0.129. The reciprocal is 0.871.

$1,130.6 multiplied by .871 and you get:

$984.75 -$0.30 paypal fee

If they want to insure the package, shipping will be in the $10 range, give or take.

So in the end, about $975. That's a net loss of $25, without even considering time or gas.



Why do I make these posts? Because I don't want fellow numismatists losing money on sales!
For any sales, not just on new hundreds.

Don't get scammed by eBay! Use my formula to make sure you DON'T get burned!

The formula is simple. Take the price of your item. Let's say a new $100 bill, bought at face value. To break even, you need to add in shipping FIRST. Assume high shipping. Maybe $7 total cost (packing, insurance, etc)

Then, take $107 and divide by 0.871.

Doing that gives you about $122.85. Then add in the $0.30 flat fee from paypal, = $123.15

That is your price to break even before considering gas. Here I would just round up to $125 for breaking even.

I have seen a few $100 bills sell for $135. This means the seller made about $17 for eBay, $7 for USPS, and $10 for themselves.

Know what you're doing so you don't lose money! eBay is set up to confuse you. eBay fees aren't taken out right away so it looks like you made more. You get a bill much later.

Paypal (owned by eBay) fees are on paypal's website, but you have to find them and they are actually somewhat hard to find.

I'm simply trying to show everyone a simple formula to make sure you don't get lost in the fees. Not on $100 bill sales, in general.

Remember:
Cost of your item + shipping cost = total selling price

Total selling price/0.871 = breaking even

 

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Advice seems 'sage'.........Thank you Brother.........

 

Thanks green!

 

Yes. The idea is to make a profit.

 

Thats why i've been using this baby since day 1 and I also have one setup for an auction house I purchase from.


eBay also charged 10% on shipping charged so if you charge $2.00 you're coughing up $.20

 

Yes, and don't forget to subtract the actual shipping cost to get the net of the sale.I also subtract the cost of the item to me. For example, if the coins cost me $100 total, that $100 is subtracted along with the fees and shipping to get the net profit.

 

I don't know why, but the fees from Paypal for me are around 3.459%.

 

I think your point is valid but you should disclose that the fees that you have quoted are for the casual E-Bay seller. If you have an E-Bay store, the fees are much much lower.

Monthly E-Bay Store fee: $19.95
Monthly E-Bay Store fee with 1 year subscription: $15.95
E-Bay FVF: 6% for Coins & Currency
E-Bay FVF for Top Rated Seller (20% discount): 4.8%
Paypal Fee: 2.9% +$0.30

So if I sold this exact same item for the exact same price I would have made a profit.

$1,130.60 x 0.923 = $1,043.54 - $20.25 = $1,023.29

If your goal is to make a profit on E-Bay you must open a store, otherwise E-Bay just becomes an avenue to liquidate items in your collection from time to time.

 

Good point, but the seller in this case WAS a casual ebayer, so the math I used is most likely accurate to her charges

 

Nice work on the formula. I'm hoping your using the new $100 note as an example was just an example as I can't see why anyone would pay a 25% markup on a note they can acquire for face at any bank. Then again, if you can get them too, more power to you.

 

yes, that's just an example.

It goes for any items. Basically it just shows that people think they are making money when they are losing it! This is because ebay's fees are cryptic. All they talk about is how it is now FREE for most listings and say how you only pay a final value fee if your item sells. You have to do some searching to find the actual fees. Plus, they don't mention their sister company charging 2.9% +30 cents.

They also charge BOTH of those fees on the total selling price + shipping. And when you look in your paypal, if your item sold for $100, it shows that you received $100. It actually hides that fee on another page where you look at net payment of $96.80. Then, ebay's bill would be due a month later. Both fees become out of sight, out of mind. That ebay bill will be another $10, taking you down to $86.80 before shipping charges.

Ebay fees have moved up from about 5 up to the current 10%. They say "they listened" to the community by doing away with listing fees.

In doing so, they have adjusted the final value fee to INCREASE the amount ebay makes on the sale.

Basically, people didn't like getting nickel and dimed on little fees that added up to a few bucks. Now those fees are gone and you pay a larger % of the final value.

 

Do you have a copy of this you can share? Or list the formulas and we can create our own?

 

just sold a coin for $80.00, after fees/shipping i make $66.38. ouch

 

I always utilize "free shipping" in my auctions. So I sold an item for $3.00. It cost me $3.08 to ship. How'd I do, lol?

 

Yup, that's the reality of it. More than a shop could offer though, I'm sure.

No joke, I bought an item on ebay just this week for $0.99. free shipping. I asked if I could do bulk discounts. I even did some math to try to get him to do a discount. I tried to show him that shipping would swallow his profits.

He said no discounts, so I just ordered 1.

The package came and shipping label says $2.07

Not only that, but the envelope is a padded bubble one. Those are usually $0.50 unless you buy huge bulk.



I just don't get it.

 

The seller should have sprung for the ebay store subscription.

 

That's a good point. Still, I feel it would have been a win-win for him to let me buy them with combined shipping discounts. Then again, I'm biased toward the deal I wanted

 

Ebay basically takes 10-15% of the final sale price?

 

The last item I sold on eBay was a Franklin half dollar When all was said and done it cost me 50 cents to sell it. I lost on the deal and decided never again. That was a few years ago and I have not put anything for sale on eBay since.