The truth of the matter is that it is still possible for any individual to build up a profitable business as an eBay seller. What many guides and manuals fail to emphasize is that just as in any other business you need to have a professional approach and get your costing right.

One of the major areas overlooked by newcomers is accurate costing. For example,
if you buy an item for $10 (or £10 in this example the currency does not matter) do you know how much you have to sell it for on eBay to make 50% profit. Obviously it is more than $15 because you have to also allow for all the eBay and Paypal or bank fees, plus the cost of packaging and postage.

Having decided the type of products or niche that you wish to specialise in then you need to find a reliable source of supply. Whether you are going to buy from a manufacturer, wholesaler or drop shipper you need to find out not only the basic unit price but what additional expenses such as tax or shipping have to be added.

Having established the cost of the item you then need to work out what the listing, final value and Paypal fees will apply. It is worth remembering that your listings may not always result in a sale and so you should also include an allowance in your figures for the cost of these unsuccessful listings.

Packaging takes time and money and this should also be included in your calculations. eBay are very keen to encourage sellers to keep shipping costs to a minimum and if you charge too much this can have an adverse effect on sales. Having said this, packing and shipping are not cheap and have to be included in your calculations.

Having calculated your costs you must decide on the profit per item that you require to make the sale worthwhile. This is not necessarily the price you should set, Always price your item at the price that you think your market will stand. You can always lower your price when competition or lack of demand forces it down. But never go below the price that gives you your minimum profit requirement, when that happens its time to get a new product to sell.

There is an old saying, “look after the pennies and the pounds will take care of themselves.” and that is true with eBay selling. Unless you know exactly what your costs are you will find it difficult to make a fair and consistent profit.

By Dave Bromley

Dave Bromley has been a registered member of eBay since 1999 and has written

both on and off line on subjects related to online auctions. You can read his blog at http://www.ukonlineauctionnews.com