This guide explains how to calculate all of your costs before listing items on eBay in order to guarantee profitable sales.
This method uses a spreadsheet to calculate all costs. In a spreadsheet, such as for use with Excel or Open Office (Open Office is free), list the following in their own column:
Item | Cost | Shipping Chg | PayPal Fee | eBay Fee | Shipping Cost | Build | Profit
Item - This is where you type the name of the item you're selling.
Cost - This is the price your buyer will pay for the item.
Shipping Chg - This is the amount your buyer will pay for shipping. If shipping is free, put 0.
PayPal Fee - This assumes you're using PayPal to process your payments. If you use another method, put any fees associated with that method here.
At the time of writing, this fee can be calculated as:
((Cost + Shipping Chg) * 0.029)+0.30
eBay Fee - This is eBay's Final Value Fee.
At the time of writing, this fee can be calculated as: (Cost + Shipping Chg) * 0.09
Shipping Cost - This is what it costs you to ship the item to your customer.
When starting out on eBay, shipping can be a difficult cost to
assess before mailing an item. The eBay shipping calculator manages to
charge buyers and sellers different rates for the exact same shipping
choices. If you've never shipped an item, it's best to go to the local
post office and tell them you want to find out the cheapest way to send
the item in question. This will give you a shipping cost to work with.
After you've shipped some items using eBay's shipping label service,
you'll have a more accurate idea of what your shipping costs will be. A
small shipping scale is a wise and cheap investment for your eBay
Build - This is what it costs for you to obtain and ship the item to yourself (not to your customer). For example, this cost can include: The item, the envelope or box you mail it in, the shipping label you attach to the envelope or box, and the cost of the item (including the cost of having the item mailed to you). In short, you want to include your entire cost of the item here, minus your shipping cost to the customer.
Profit - This column calculates your actual profit. This be calulcated as:
Cost + Shipping Chg - PayPal Fee - eBay Fee - Shipping Cost - Build
If you're selling only one item, as in a quantity of 1, then you should also subtract the cost of your eBay listing fee. Thankfully, eBay gives each seller 50 free auctions per month, so this cost can often be avoided.
As you can see, there are so many fees associated with selling an item that if you fail to account for all the fees, your perceived profit may actually be a loss. The best practice is to use this spreadsheet to calculate sales before you even buy the items you want to sell. This way the only risk is that the item won't sell. However, if you can find other eBay sellers who are successfully selling the item at or around the same price you intend to charge, you can be confident that your item will sell at or around the same price.
By researching each item in this manner before buying any items to sell, you can reduce your risk and improve the likelihood of sales, while guaranteeing a profit on each sale.