There has been quite abit of chatter regarding ebay raising their fees...again. So let's take look at The Cost of Doing Business the eBay Way.
Lets say you have a domain name you want to sell on eBay. And you don't want to sell it too cheap but you do want to sell it. So you price it at $24.99. The starting price looks enticing enough because it's not 25 bucks...that's called "psychology".
List $24.99
-.60 eBay insertion fee.
Naturally, we all want it to sell for a couple of million bucks but someone does end up buying it for the original starting price of just $24.99. You're tickled to death that it actually sold and you've nearly tripled your money on regging it to begin with.
Sells for $24.99
eBay final value fee 5.25%
-$1.31 final value fee.
Needless to say, there is nothing to ship so the best and most cost efficient way to get the money in a hurry is via PayPal. But, you do not take credit cards as it is a personal account and, no-way, no-how, are you going to be slapped with those high fees.
$24.99 selling price
Paypal fees 2.9% (+.30)
-.75 (2.9%)
-.30
Total PayPal fees
$1.05
But you figure what the heck, so it cost you a buck to do business with PayPal...it's worth it and look how fast I got my money, YEEHAW!
You just netted $22.06 and, gee, I can actually make a living doing this and tomorrow I'm going to walk into my bosses office and stand up on his desk, undo my zipper, drop my drawers, turn around and fart in his face.
The look on his face will be...well...priceless.
Thus far, you cost of doing business is only 11.84% of your gross margin.
Now, you could have gone the cheap route and list it your self with eBay's own tools but you found this site called Vendio that has nice looking slick templates to use for your auctions. This is going to save you money because you don't have to spend a dime on software and everything is there for you to simply plug in and fire away to eBay.
You choose their el-cheapo Pay-As-You-Go-Plan where it only cost 12 cents per listing and a measly 1% of the final value and forego the imaging costs. We're doing things on the cheap and we're just going to make the domain name in a big ass type font and a different color and call that our "graphic".
-.12 listing
-.25 Vendio Final value fee
So, big whoop, we're down to $21.69 or about 13% of the cost of selling the domain on eBay. You are no math wizard but you know that 87% is still quite a hefty sum when you compare what you paid for the thing vs. what you sold it for.
You tell your best friend who happens to be an accountant about your new found road to riches by selling product and services on the internet and how you pocketed 87% off just one sale!
He says he'll be glad to handle your account, being the good chum that he is. He tells you to keep track of all your expense because they are...tax deductible.
Now you're in heaven because not only are you making money hand over fist but you're going to be able to deduct some of this money as a business expense...SWEET!
So we're gonna screw our Uncle named Sam, make money, and "be my own boss. I'm happier than a pig wallowing in shi@".
So you start raking up the deductions. I've got a GoDaddy account, they're cheap enough, only cost me $8.95 to reg the name. Still not a bad deal.
Cost to reg
-8.95 GoDaddy
-.25 ICANN fee
Damn, everything cost something and everybody has a fee of some sort. But, I still made $12.49 off of one lousy domain name which is about a 136% profit over regging the thing in the first place so I got my money back and then some.
In the meantime, your cost of doing business by selling a domain name on eBay and using the services of PayPal and Vendio for convenience's sake has unsuspectingly and unbeknowst to you risen to 50% of your gross selling price.
Your friend, the accountant follows up with a phone call and asks you how's the wife and kids, let's do lunch, and, oh-by-the-way...don't forget you are in the 33% tax bracket and have a nice day.
33% taxes
-4.12 per domain sold
Total net gain
$8.37 cents (29.85%)
The price of doing business on ebay? 70%
The price of the look on your former employer's face when you ask for your job back? Priceless
Lets say you have a domain name you want to sell on eBay. And you don't want to sell it too cheap but you do want to sell it. So you price it at $24.99. The starting price looks enticing enough because it's not 25 bucks...that's called "psychology".
List $24.99
-.60 eBay insertion fee.
Naturally, we all want it to sell for a couple of million bucks but someone does end up buying it for the original starting price of just $24.99. You're tickled to death that it actually sold and you've nearly tripled your money on regging it to begin with.
Sells for $24.99
eBay final value fee 5.25%
-$1.31 final value fee.
Needless to say, there is nothing to ship so the best and most cost efficient way to get the money in a hurry is via PayPal. But, you do not take credit cards as it is a personal account and, no-way, no-how, are you going to be slapped with those high fees.
$24.99 selling price
Paypal fees 2.9% (+.30)
-.75 (2.9%)
-.30
Total PayPal fees
$1.05
But you figure what the heck, so it cost you a buck to do business with PayPal...it's worth it and look how fast I got my money, YEEHAW!
You just netted $22.06 and, gee, I can actually make a living doing this and tomorrow I'm going to walk into my bosses office and stand up on his desk, undo my zipper, drop my drawers, turn around and fart in his face.
The look on his face will be...well...priceless.
Thus far, you cost of doing business is only 11.84% of your gross margin.
Now, you could have gone the cheap route and list it your self with eBay's own tools but you found this site called Vendio that has nice looking slick templates to use for your auctions. This is going to save you money because you don't have to spend a dime on software and everything is there for you to simply plug in and fire away to eBay.
You choose their el-cheapo Pay-As-You-Go-Plan where it only cost 12 cents per listing and a measly 1% of the final value and forego the imaging costs. We're doing things on the cheap and we're just going to make the domain name in a big ass type font and a different color and call that our "graphic".
-.12 listing
-.25 Vendio Final value fee
So, big whoop, we're down to $21.69 or about 13% of the cost of selling the domain on eBay. You are no math wizard but you know that 87% is still quite a hefty sum when you compare what you paid for the thing vs. what you sold it for.
You tell your best friend who happens to be an accountant about your new found road to riches by selling product and services on the internet and how you pocketed 87% off just one sale!
He says he'll be glad to handle your account, being the good chum that he is. He tells you to keep track of all your expense because they are...tax deductible.
Now you're in heaven because not only are you making money hand over fist but you're going to be able to deduct some of this money as a business expense...SWEET!
So we're gonna screw our Uncle named Sam, make money, and "be my own boss. I'm happier than a pig wallowing in shi@".
So you start raking up the deductions. I've got a GoDaddy account, they're cheap enough, only cost me $8.95 to reg the name. Still not a bad deal.
Cost to reg
-8.95 GoDaddy
-.25 ICANN fee
Damn, everything cost something and everybody has a fee of some sort. But, I still made $12.49 off of one lousy domain name which is about a 136% profit over regging the thing in the first place so I got my money back and then some.
In the meantime, your cost of doing business by selling a domain name on eBay and using the services of PayPal and Vendio for convenience's sake has unsuspectingly and unbeknowst to you risen to 50% of your gross selling price.
Your friend, the accountant follows up with a phone call and asks you how's the wife and kids, let's do lunch, and, oh-by-the-way...don't forget you are in the 33% tax bracket and have a nice day.
33% taxes
-4.12 per domain sold
Total net gain
$8.37 cents (29.85%)
The price of doing business on ebay? 70%
The price of the look on your former employer's face when you ask for your job back? Priceless
