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Is eBay now simply too expensive?

Discussion in 'General Business Forum' started by paulears, Sep 22, 2020.

  1. paulears

    paulears UKBF Big Shot Full Member

    4,531 1,200
    I'm struggling now with ebay sales. They're simply too expensive and on low margin items. They're charging more in fees than I make on a few items. Some things I sell steadily are sold by multiple sellers, and we're all pretty much the same price - which is around 20% above the buying price. Now the ebay fees are around 12% in total, and it's getting to the stage where any problems that involve extra money can wipe out the transaction. The few products with decent margins are getting fewer, and every time a direct order comes through the website it's great, but the ebay experience is very unrewarding now. I suppose in overall terms, it still works, but it's forcing me to be less nice with idiots. First stupid customer request and I'd rather refund it and lose the post cost!

    On some of my products, to use them requires and OFCOM issued number to be entered. This is not changeable by the customer. To reset it requires me to reprogram it. I've tried notes on the box and now have a message on the sale blurb but they don't read it. The elderly ones mess it up, and send it back - either for reprogramming or they tell ebay it doesn't work and demand a refund. I guess that's just a hazard of selling complicated kit to people who can't handle it.

    Ebay is a great market but I really don't know how people make money at some of the prices I see. One product on ebay at £149 inc postage from China direct confuses potential suppliers. None of them can supply at anywhere near that price - they all want $220+ per unit. I send them the ebay page and they can't get near it. I'm thinking about buying on ebay, and selling just locally at the full price.
     
    Posted: Sep 22, 2020 By: paulears Member since: Jan 7, 2015
    #1
  2. The Byre

    The Byre UKBF Legend Full Member

    10,367 4,344
    TBH, 12% sales and transaction costs are remarkably low. At 20% mark-up, that gives you a margin of 8%. It looks slim, but the mark-up on consumer durables is usually just 10% of RRP if you are running a shop. Once you have factored in transaction and other costs, there ain't much left!

    RRP £99.95 (i.e. £100). VAT £16.7 = £83.3 net. Shop price £95, so c.a. £70 net, just £10 above the £60 wholesale. The profit is often in the end-of-line deals and refurbished, etc. where the wholesale drops to £30 or below.

    I suppose the trick is still to just try to buy in as cheaply as possible - not especially easy! But then it never was!
     
    Posted: Sep 22, 2020 By: The Byre Member since: Aug 13, 2013
    #2
  3. Mr D

    Mr D UKBF Legend Free Member

    24,928 3,039
    You know the fees. You know your costs.
    The fees have recently increased? Increase your prices.

    If that means you are making more profit / not selling at a loss then great.
     
    Posted: Sep 22, 2020 By: Mr D Member since: Feb 12, 2017
    #3
  4. Alison Moore

    Alison Moore UKBF Enthusiast Full Member

    662 128
    We've noticed that eBay has become increasingly expensive. I think they're pricing themselves out of the market, they used to be the 'go-to' site for literally anything (I'm not saying we bought everything from them, but most things were available on there), but recently there have been huge ranges no longer available. (I know Covid will have an affect, but the goods were available on other sites, so it wasn't just a supply issue).

    With regards to people making a profit, I don't think a lot of people do. There's a huge amount of 'on-the-side' sellers on eBay who think if they can make a fiver, then it's great business sense. Plus eBay limit new sellers a lot, so people lower their prices to make the sales, so eBay will remove the limits, which pushes the prices down. Plus I was speaking to my accountant a while back, and he's got a few customers who trade on eBay, but know that every year they're going to make a loss, but they just do it as a hobby as it keeps them busy and they like the interaction and then they offset the loss against their pension!
     
    Posted: Sep 22, 2020 By: Alison Moore Member since: Aug 4, 2016
    #4
  5. Bob Morgan

    Bob Morgan UKBF Ace Free Member

    1,029 289
    One day soon we will all be reminiscing about Ebay and Amazon, etc!
     
    Posted: Sep 22, 2020 By: Bob Morgan Member since: Apr 15, 2018
    #5
  6. MBE2017

    MBE2017 UKBF Ace Free Member

    1,941 708
    The trick on eBay has always been about how well you buy, their business model encourages a race to the bottom regarding selling prices, I used to double buying price minimum years ago, I preferred a 2.4 multiple markup.

    I stopped selling on eBay over a decade ago, used to ship 100,000 order plus per year, but I got fed up with eBay changing rules about number of auctions, BIN, etc overnight without no warning. It got to the stage I felt completely out of control, so binned them off. Best thing I did, gave myself my sanity back, but I missed the sales as well.

    Your biggest problem is selling low mark up items paulears.
     
    Posted: Sep 22, 2020 By: MBE2017 Member since: Feb 16, 2017
    #6
  7. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,931 2,486
    Paul, do you use Google shopping it was something we found very useful with plenty of sales and many were multiple orders where once on your site they found other items they likes
     
    Posted: Sep 22, 2020 By: Chris Ashdown Member since: Dec 7, 2003
    #7
  8. paulears

    paulears UKBF Big Shot Full Member

    4,531 1,200
    Maybe I just expected a bit more - in my product range it's those errant Chinese firms selling direct that cause me grief - but luckily customers seem to be willing to pay a little bit more for a UK supplied product - many being very wary of buying direct (which is good!)

    It's not just me then - that's probably a bit comforting.
     
    Posted: Sep 22, 2020 By: paulears Member since: Jan 7, 2015
    #8
  9. Mr D

    Mr D UKBF Legend Free Member

    24,928 3,039
    Yes give it a couple of hundred years.
     
    Posted: Sep 22, 2020 By: Mr D Member since: Feb 12, 2017
    #9
  10. paulears

    paulears UKBF Big Shot Full Member

    4,531 1,200
    Well - today was rounded off by an eBay automatically approved return - which I don't mind really. The rule should be do not buy technically complex equipment on eBay that without programming does nothing at all, if you are trying to fit it to a mobility scooter, and don't own a windows 10 computer that the ad makes very clear is required for programming. He tried to install the software on his neighbours computer, which has just Windows protection, which identifies perfectly sound software as a virus. AVG now stops, blocks and sends programming software off for examination before releasing it. Windows tells people they are going to get infected when it tries to install the drivers. With this customer, perhaps a good thing not sell him a radio.
     
    Posted: Sep 22, 2020 By: paulears Member since: Jan 7, 2015
    #10
  11. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,931 2,486
    I must admit being highly pi##ed off about buying electronic items from China and just getting a single folded A5 piece of paper with very basic instructions. and often its the same with stuff brought from UK sellers of china goods

    As a minimum the Uk sellers should make up their own simple instructions for the most obvious options and include printed on A4 with the goods

    Recent purchases include
    Laser engraver fist class simple instructions
    Smart tv box Crap instructions
    Small keyboard for Smart tv box appalling instructions
     
    Posted: Sep 22, 2020 By: Chris Ashdown Member since: Dec 7, 2003
    #11
  12. ineedadollar

    ineedadollar UKBF Regular Free Member

    301 15
    I used to sell alot on ebay about 2008-2009 and make 2-£4 per item which sold for £12
    been trying to get back into it but cant seem to find the margins on anything. products which cost me £5 are being sold on there £7.99 with p+p. and things costing me £20 are being sold on there £25 with p+p. weirdly its cheaper for places in china to make the product and send it over then it would cost me in P+P on some items. so i have given up on ebay
     
    Posted: Sep 22, 2020 By: ineedadollar Member since: Sep 8, 2011
    #12
  13. MarkOnline

    MarkOnline UKBF Newcomer Free Member

    18 13
    Price points and margins are getting squeezed, the percentages (selling fees etc etc) are about the same as they were when we started 8 years ago. (14%). Too many sellers, I wouldnt like to start again on there.
     
    Posted: Sep 22, 2020 By: MarkOnline Member since: Apr 25, 2020
    #13
  14. Mr D

    Mr D UKBF Legend Free Member

    24,928 3,039
    We sell on ebay.
    Stuff that cost £4.25 we are selling at £11.99 with free delivery.
    Got an item sold today, 22p cost and selling at £4.25.

    Even got an item at £6.99 selling at £19.99. Sure there are cheaper sellers - one guy is selling same item at £13.50 and there are well over a dozen other sellers. I've one left out of a carton of 8 I purchased middle of May.

    Price is the one thing you set. If you want to set cheap then can do so.
    Its not ebay trying to make prices cheap. Its sellers.
     
    Posted: Sep 22, 2020 By: Mr D Member since: Feb 12, 2017
    #14
  15. SillyBill

    SillyBill UKBF Regular Free Member

    263 142
    It is what it is, the flea market of the internet. Has been for years. And I don't mean that disparagingly as I often buy it from it, nothing wrong with trying to grab a bargain. I see it as no different to an online car boot, the 21st century version of it. It will have the wily traders who do well but like a car boot sale the vast majority of others are that part of the population that can't compute basic %s or account for P&L.

    I've only seen our manufactured products on Ebay with a couple of customers and both did it for a while before moving onto their own platforms and websites, presumably due to the costs. I did very occasionally check their listings out and the prices they were selling at and wondered wtf they were playing at sometimes. Flogging yourself into the ground for pennies doesn't seem that fulfilling to me.
     
    Posted: Sep 22, 2020 By: SillyBill Member since: Dec 11, 2019
    #15
  16. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

    5,233 1,805
    Ha ha come on the @The Byre

    Some of us don't get out of bed for 8 per cent
    WTF are you supposed to do with 8 per cent
     
    Posted: Sep 23, 2020 By: JEREMY HAWKE Member since: Mar 4, 2008
    #16
  17. The Byre

    The Byre UKBF Legend Full Member

    10,367 4,344
    I can think of many large and extremely profitable companies that work on a great deal less than 8%. It always depends on the structure of the company and the market you are in.
     
    Posted: Sep 23, 2020 By: The Byre Member since: Aug 13, 2013
    #17
  18. Mr D

    Mr D UKBF Legend Free Member

    24,928 3,039
    Extremely profitable - and a great deal less than 8%?
    Interesting mix.

    I can think of a few much smaller companies that work on much greater amount than 8% - perhaps they are overwhelmingly profitable? Or would be if they had the same costs as these large companies.... :)
     
    Posted: Sep 23, 2020 By: Mr D Member since: Feb 12, 2017
    #18
  19. thetiger2015

    thetiger2015 UKBF Regular Free Member

    364 104
    I think China still benefits from free postal services in the UK. You can ship direct from China to the UK and postage is free - initially dropshippers made money from this, despite the long lead times. Now Chinese sellers have realised they can just do it themselves, cut out the dropshippers and ship direct to the UK.

    It's a question of whether you make any profit after dealing with all of the issues. Low margins are fine, if you're selling huge volumes and gradually getting your cost price down but if you're just spending all day sorting out customer refunds and your margin remains low, there's not much point.
     
    Posted: Sep 23, 2020 By: thetiger2015 Member since: Aug 29, 2015
    #19
  20. Alison Moore

    Alison Moore UKBF Enthusiast Full Member

    662 128
    Thanks, I never knew that. I always wondered they they managed to factor in their postage costs on such low margins.
     
    Posted: Sep 23, 2020 By: Alison Moore Member since: Aug 4, 2016
    #20