If you take out an item form your Grandfather’s attic and sell on eBay, you can do what you like, price as you wish, either Auction or Buy It Now, anything will sell and you are happy with what you gain from eBay selling.  However, if you plan to become a serious seller with about 100+ items, you should learn the following lessons of eBay sellers who bled while selling on eBay.  It is a good lesson to learn as some sellers even did not recognize themselves that they are wasting their time and loosing while they sell.

1.  Not having a systematic calculation on eBay seller fees and PayPal transaction fee.

A lot of sellers considered that eBay fees are negligible.  But when they start to list like 100 items on eBay, not having a systematic cost calculation bled them to death.  Most sellers compete for the top spot in “Price + Shipping lowest” feature of search.  The intense competition made them to reduce the listed price, without detailed considerations for all costs selling on eBay. They might sell their item but only to recognize that after selling, and all costs are considered, they are in red.

Seller fees are very important.  The insertion fee starts at $0.15 for Auctions starting at $ 0.01.  The insertion fee is $4.00 for Auctions starting form $500.

Most of the sellers consider the insertion fee as negligible, but for 100 items, and auction listings at 7 days, it could count to $60.00 per month to $1,600.00 per month for high end products.

Then there is the Final Value fee that really bites your earnings.  It is 8.75% for closing value between $0.01 to $25.00.  Suppose if you could sell about 20 items at $25.00 per month, the FVF is $43.75. You are lucky that eBay did not charge any fees on the shipping and handling fees.  But since September 2009, all sellers are required to have own arrangement for shipping insurance. You can not shift the responsibility of insurance fees to the buyer.

After payment to eBay, you are still deducted by Paypal for each transaction.  The Paypal fee is 2.29% of the total transaction value plus $0.30.  If you sell an item at $25.00 with shipping fee of $7.00, PayPal deduct you $1.03 for this transaction.

To calculate all related fees regarding selling, you should create an excel file with fee calculation for each column for insertion fee, Final Value fee and Paypal transaction fee. After adding your item cost, shipping cost, eBay fees, Paypal deduction and subtracts the total from actual sale price, you could calculate your profit in detailed for each product.  This detail cost price calculation is essential and stops you from bleeding in red, if you are a serious seller and your listings are over 100.

2. Choosing the wrong way of selling format.

Most of the new sellers considered Auctions as the only way of selling.  At a glance, the insertion fee for auction is $0.15 while the insertion fee for fixed price listing is $0.35.  But auctions last for only 7 days, and in one month period, you have to spend $0.15 x 4 = $0.60. In contrast, with fixed type listings, you can list and sell as much as you want in the period of 1, 3, 5, 7 or 30 days, the insertion fee remains the same at $0.35.

By selling auction, you could sell only ONE item in 7 days of listings.  With fixed type listings, you can list and sell as much as you want in the period of 1, 3, 5, 7 or 30 days, you could make much higher profits by selling high quantity at fixed price.

Another common mistake is to use Feature First at $24.95 for 10 days and offering at a higher price than normal.  Most serious buyers search by “Price + Shipping Lowest” option and the most lowest priced offer just appeared underneath the Feature First listings.  People take the cheapest, not the one on the top.  If you offered the cheapest, you would be on the top anyway; you do not need Feature First and spend $24.95.

Another way to save more cost is to list as Store listed items.  The store listed fixed price items cost only $0.03 for insertion fee.  However, the search visibility for store items is much lower than normal list items.  This could be compensated by adding a paragraph of very inviting and cost saving benefits you offered in the store items in your normal listing items. You could drive traffic to your own store by inviting messages on the normal list items.  Some buyers who look for bargain also use include store listing feature while they search, so traffic to your store is not difficult as you imagine.

3.  Not having a picture of the listed item.

It’s essential, everyone like to see things before they buy them. For successful eBay selling, make sure any products you list are accompanied by good quality photographs. eBay recommend you to have picture at its longest width or height at 1000 pixels.  Nobody buys if you cannot offer a decent picture of an item that you are trying to sell.  What you need is a good digital camera with macro feature.  Do not spend for expensive models offering high pixel values.  High pixel picture is essentially a large picture.  If you list up a rather large picture, it takes time for loading and most buyers would not be patient and just browsed away from your listing.

Put the item on a garden table on a cloudy day or if you take your pictures indoor, put it underneath cool day light fluorescent is good enough at the start.  You can use a big white sheet of paper as a background. A good book on Photoshop CS or any knowledge on photo editing program is essential.  You need to crop off some distracting elements in edges and increase Brightness and Contrast of the pictures you have taken form your camera.

4.  Ineffective inventory management.

Many auction support software such as Vendio and Acutiva offers inventory management packets.  eBay’s Selling Manager Pro also offers inventory control feature.  But to my experience, all online based inventory control packets are error prone and not efficient.  Due to many events of interruption during uploading and downloading together with server overloading, those inventory values are not 100% correct.  Sometimes, sellers received some outside offers for big volume and need to ship without passing eBay market, those manual shipments effect the correctness of the automated inventory control system.  This led you to spend uselessly for listing fees of the items that are not available for sale.

You need a good paper based inventory management that lists and cross check manually to verify that what you are listing on eBay is actually available for shipping to your customers.  Some volume sellers unknowingly list the items on eBay and only to find out that the item is not available anymore in their stock when someone won the item and paid for it. Canceling a transaction and refunding your customer is a painful work for any eBay seller.

Some sellers use dropshipping services.  Most dropshipping services cannot affirm you their available quantity.  You are informed only when you place your order upon sale on eBay and they have nothing left to ship for you.  Apart from loosing the seller fees on eBay, this unreliability effects your reputation.  Many buyers left negative feedbacks upon information of item unavailability, even if you refund back full amount.

5.  The Cheer Leaders

The cheer leaders are the ones sitting in idle and cheering the customers buying form other sellers.  They had priced their items far too expensive so that only thing they are effectively doing is wasting the listing fees and making the customers feel happy to get the items at lower prices from someone else. Their List prices are living proof of MSRP for other price efficient sellers.

The Cheer Leaders are the sellers who do not understand the actual Buying habits on eBay.  90% of serious buyers finding bargain on eBay find the items by using the “Price + Shipping Lowest” feature while they search.  Most buyers never use eBay default search of “Best Match” feature as this type of search produce only a random value.  The online buyer’s only chance for getting a bargain is to find the lowest priced seller.  When they buy they are happy to get the cheapest price.  The high priced sellers just hang there without selling and cheering the sale of other sellers.

Before you price your item, calculate all the costs systematically and list only if your offered price allows you to be at the first or second page of a search result.  Most buyers rarely go more than these two pages just to look for better feature of a same product.

Look for Part 2  in the following Article: