Race to the bottom

[Porky]

I kid you not, a small BUSINESS on Ebay is selling a product for £1.50 with free p&p.

Now let's just park to one side, the manufacture cost of the product, packing etc, let's say they stole an entire pallet of the product and its free to them

Just putting the product in a small envelope, and printing the postage label and posting second class, not to mention their time to do it must cost more than £1.50 - how can they make this even viable? What am I missing here?

 

[JEREMY HAWKE]

I kid you not, a small BUSINESS on Ebay is selling a product for £1.50 with free p&p.

Now let's just park to one side, the manufacture cost of the product, packing etc, let's say they stole an entire pallet of the product and its free to them

Just putting the product in a small envelope, and printing the postage label and posting second class, not to mention their time to do it must cost more than £1.50 - how can they make this even viable? What am I missing here?

Its pure stupidity and desperation and a person coming from a background where they have had nothing and been programmed to believe that £1.50 is a considerable amount of money wont fair well in the UK

They will be gone in a couple of the months and the next chancer will take their place

 

[Mark T Jones]

When I was assessing loan applicants for SUL, there was one who selling football wall stickers on EBay - his proud USP was that he didn't charge postage

Apart from the fact that it's a fairly weak USP (most buyers are conditioned to accept reasonable postage charges), a quick glance at his projections showed that he hadn't put postage in as a cost - as soon as he did, it fell apart

He wasn't dodgy or even stupid, just very, very naive. Which applies to a lot of these bedroom online 'businesses'

It also goes some way to explaining my fixation with start ups doing projections

 

[tony84]

Isnt this something the govt announced in the budget?
If you post something from abroad you do not pay import taxes if it is under a certain value.

Chances are they are paying 20p postage in China or somewhere and its coming over on a plane with millions more items so postage costs might be 25-30p.

Their profit is maybe £1. If it is something they sell thousands of, then thats thousands of £1's

 

[Gecko001]

I suspect that it is a pallet of goods got for nothing, that they are selling getting £1 after postage and Ebay fees (for business seller). Packaging is usually a plastic bag and no invoice or anything else in the bag, so no other expenses worth mentioning, as it probably is a bedroom business anyway. I assume they make more on other items they sell, but perhaps they cannot always rely on them.

PS. I bet they do not get any returns at those low prices, so is hassle-free.

 

[alamest]

I kid you not, a small BUSINESS on Ebay is selling a product for £1.50 with free p&p.

Now let's just park to one side, the manufacture cost of the product, packing etc, let's say they stole an entire pallet of the product and its free to them

Just putting the product in a small envelope, and printing the postage label and posting second class, not to mention their time to do it must cost more than £1.50 - how can they make this even viable? What am I missing here?

A £1.50 item with free P&P can work if the seller ships using bulk-discounted Royal Mail Large Letter labels, which for high-volume accounts can drop into the £0.90–£1.20 range. Packaging bought in bulk might add another £0.05–£0.15, keeping their real cost below the listing price.

Many use these ultra-cheap listings as customer acquisition, then recover profit from:

other higher-margin products, or

repeat buyers (top-ups, bundles, upgrades), or

improved fee/visibility tiers from marketplace performance.

So the £1.50 item isn’t the business itself – it’s the funnel into the shop where profit is made later.

 

[fisicx]

So the £1.50 item isn’t the business itself – it’s the funnel into the shop where profit is made later.

Does that actually happen on eBay? I buy loads of stuff off eBay and don't think I've ever used the same seller more than once.

 

[alamest]

Does that actually happen on eBay? I buy loads of stuff off eBay and don't think I've ever used the same seller more than once.

Many people do it to increase their rating; more rating means more ranking and more sales on other products.

 

[DontAsk]

Does that actually happen on eBay? I buy loads of stuff off eBay and don't think I've ever used the same seller more than once.

I have, but only for the same low price items. Often, however, they are no longer available from the same seller, which may speak volumes.

 

[LPB 123]

I kid you not, a small BUSINESS on Ebay is selling a product for £1.50 with free p&p.

Now let's just park to one side, the manufacture cost of the product, packing etc, let's say they stole an entire pallet of the product and its free to them

Just putting the product in a small envelope, and printing the postage label and posting second class, not to mention their time to do it must cost more than £1.50 - how can they make this even viable? What am I missing here?

Is it an item that is usually sold individually or do customers often buy in quantities of 2 or more?

It could be they lose money when 1 is sold, break even when 2 is sold and start making a better return from there as the postage is likely the same or very similar when the quantities increase.

 

[DoolallyTap]

There are many sellers on eBay who do not understand what they are doing and for every sale they loose money. However for some it may an investment and be a way of increasing feedback to reach Top Rated seller much quicker.

 

[Lucan Unlordly]

Perhaps they need the room and it's a way of clearing stock quickly whilst building a database of potential purchasers for similar products.

I occasionally 'give away' defunct items with a retail price of £10+ for a quid if you buy a dozen pieces but only if collected. That way, instead of reaching out to customers that are miles away or taking valuable time out to knock on local doors, they come to me, see what we do and get a gentle sales pitch thrown in for free.

 

[Karimbo]

back in the day you could sell stuff for cheap. postage was cheap, ebay fees were <5%

I remember a stamp used to cost 25p and there were no size issues. I remmeber buying a lightweight haloween mask in a cube box on ebay. Probably a couple of pound and postage was 25p becasuse it all came to less than 100g.

ebay was quite good for house clearances because you could sell stuff to a national audience. Nowadays with high postage these low valuable items can't be sold and brand new items are cheap too. Got 4 staplers? you could sell 2 of them on ebay and declutter. Nowadays no chance.

Not even fb marketplace/gumtree is viable to get people to take these good working stuff and reduce carbon footprint. People rather just buy a cheap chinese one from amazon. Nobody will get off their arse to come collect a stapler from somes house - people even get their greggs through a delivery app.

 

[AlanJ1]

It can be an easy way as mentioned in here to gain / keep TRS. 10% on FVF adds up on the larger ticket items,

 

[SillyBill]

Its best to not even give these operations a second of mind bandwidth, no shortage of people who will sell for pennies online, I class them as essentially unemployed, but in denial.