The Pros and Cons of Selling on eBay

eBay used to be a site where people could put up their old junk and hope other people would bid on it. Nowadays though, it is actually a venue for money making online. If you have been looking for a new career at home, you may think about selling products on eBay. There are pros and cons that come along with this, so you need to be really careful about jumping into that kind of work. It may not be as profitable as you think it is. Here is an overview of the money you could logically make on eBay to determine if it is a good income source for you.

The Fees on eBay

There are tons of fees on eBay any time you make a post, more so than most people realize. Here are just some of the many fees that you could come across with your eBay business:

• Posting fees: you have to pay a certain amount of money for posting an item on eBay, regardless of whether or not it sells. The more you do with the posting, the more money you will have to pay. Little things like adding a purple border to it or adding a Buy It Now option will boost the cost of your posting. If you consistently struggle to make a sale, you will be forced to pay out without making any money in return.
• Selling fees: If you happen to sell an item on eBay, you will be charged with a percentage of the sale price. This is a sum of money on top of your posting fee. The value of your selling fee will depend on the cost of your item, but it will quickly eat away at your profits.
• PayPal fees: If you manage your money through PayPal, you may have to pay a fee for the money you transfer. This will depend on the type of PayPal account you have and the amount of money that you are transferring from place to place. For instance, you may have to pay a fee to send your money to your bank account if you need it sent instantly. You can look into PayPal’s terms of use for more information on that regard.
• Shipping fees: You will obviously have to pay money to ship out whatever item you sell. We will discuss this in greater detail in a section below, but just note that shipping is often more expensive than you think.
• Taxes: On top of all of the fees above, you will have to pay taxes on the amount of money you make from eBay, assuming you turn this into a career. Self-employed taxes are 15.3%, so kiss 1/6 of your money goodbye from the start.

As you can see, there are a ton of costs that come along with selling items on eBay. You have to factor in all of those fees into the equation to determine just how much money you’ll make – if any – from your ads.

The Pros and Cons of Selling on eBay (Continued)

Profit Margins

Most people try to make at least a 50% profit on everything they sell, whether it’s a cell phone, a Christmas ornament, or something else along those lines. Obviously this percentage goes down as the value of the item goes up because you can’t expect to make 50% on a car. For many eBay sellers, the profits only add up to about 15%, which really isn’t enough to justify the time spent listing and shipping out the items. This all depends on the product, the season, and the state of the market, but chances are you won’t make much more than your overhead.

Of course, there are always ways to improve your profit margins. The bet plan to follow is to buy low and sell high. If you get items for super cheap from a garage sale, you may be able to turn them for a big profit on eBay. This process takes time though, so don’t expect to be rolling in the money overnight.

Customer Conflicts

If you sell items in a store, you can deal with your customers directly. You can tell them to get lost, or you can pay to cover whatever damage you may have done. You can do the same on eBay, but you have to go through customer service to do so. This department seemingly favors the buyers because they will often take their side instead of the seller’s. If you ship out an item to a customer that does not meet his or her expectations, you could be out all of the money for the shipping on the item, plus any PayPal fees you may have come across during the transaction. You may also have to pay for the return shipping if the buyer sends back an item, depending on how the case goes.

Shipping Rates

eBay rewards sellers who offer free shipping by putting their ads above similar ones. The only problem with this is that shipping can cost a lot of money. You might be able to save money with the flat rate boxes at the post office, but you are still going to have to pay for shipping in general. If you decide to ship items internationally, you will have to deal with a whole new set of fees. Add in the cost of bubble wrap, tape, receipt paper, and everything else, and you will soon see all of your profits flying away.

So, can you make money selling on eBay?

There is money to be made in this kind of business, but it is not necessarily easy to come by. It may be in your best interest to work in a traditional college job throughout the day and then reserve eBay for some side money. If you rely on it for a full-time income, you will have to sell a lot of products to make the kind of money you need. Keep all of the information above in mind as you start exploring your opportunities online, and you will be able to come up with an option that works for you.