How to Increase Your Profit Margin on eBay

eBay sellers are constantly seeking new ways to reduce expenses, especially since our costs are always rising. We pay eBay fees, Paypal fees, home office expenses, packaging expenses, and the list goes on. Learn how to reduce your eBay expenses and increase your profit margin on eBay by paying attention to a few important details.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• eBay Account
• Internet Connection
• Calculator
• Time

1. Pay attention to eBay Insertion Fees and the tiered pricing. For example, pricing an item between $1 and $9.99 will cost 35 cents. Pricing an item between $10 and $24.99 will cost 55 cents. Analyze your costs here and determine if it is more cost effective to set your starting price in the lower tier to save money on your insertion fees. Assuming your item sells, pricing the item at $9.99 will cost less in fees than pricing it at $10.

2. Open an eBay Store so you can add items to store inventory. Running all auctions gets expensive. You can add items to store inventory for 5 cents per item for a 30 day listing. Basic store subscriptions start at $9.99. Although there is a fee for an eBay store, you may see substantial savings in your overall costs by using store inventory listings rather than all auction style listings.

3. Use caution with listing upgrades, or avoid them completely. eBay charges hefty fees for bold, highlight, enlarged photos, and other upgrades. These upgrades can get expensive. Do your own research and run listings with upgrades and without and determine if the upgrades have any effect on your sales. (I have found that they do not increase sales whatsoever.)

4. Relist unsold items to receive relisting credits. You can relist unsold items by selecting the "relist your item" button on the item page for the ended listing. If the relisted item sells, eBay will credit the Insertion Fees back to your account.

5. Always file Unpaid Item Disputes. You will see these on your eBay Selling Manager if a buyer has not paid for an item within 7 days. After filing the Unpaid Item Dispute, the buyer might pay. If buyers don’t pay within another 7 days, eBay will refund your Final Value Fees.

6. File Mutual Withdrawals for customers who contact you and don’t want to pay for their items. (This is explained in another of my eHow articles.) If a customer decides he does not want to complete the transaction, and contacts you, filing a Mutual Withdrawal will allow you to have your eBay Final Value Fees refunded.

7. Use a free or inexpensive auction photo hosting service. Your first photo of an item on a listing is free on eBay. Each additional photo per listing is 15 cents. Using a free or inexpensive auction photo hosting service is often much cheaper than adding individual photos to each listing.

8. Trim your packaging. Make sure you aren’t over-packaging your items. The more packaging you add, the more your item will weigh, and the more you will pay in postage. In some cases, reducing your packaging by just one ounce can mean the difference in a few dollars per package. I’ve seen it happen myself, especially on first class and international shipping. By trimming the packaging just a bit so that the weight stays below a certain threshold, I can save $2 on one package sometimes.

9. Similar to the previous item, if you are shipping items USPS Priority Mail, try to use the paper Tyvek envelopes instead of a box. The boxes weigh more than the envelopes, and you will be paying more for the shipping if you use a box. Sometimes a box is unavoidable if you are shipping a fragile or breakable item, but keep this in mind as a general rule.

10. Use First Class shipping when an item weighs less than 14 ounces. You can purchase your own poly mailers and use First Class for these lighter items. Poly-mailing bags can be purchased for a few cents each when ordered in quantity. You won’t have to spend the minimum $4.80 shipping an 8 oz item just to get the free Priority Mail supplies. Therefore, if you have charged the customer $4 shipping and the actual cost is $2, plus the 10-cent investment for the poly-mailing bag, you have still made a profit and you can keep your shipping fee reasonable. You will sell more items if you keep your shipping fair and reasonable.

11. Pay your eBay fees using a credit card with a cash back program. Check your credit cards to see which ones offer a cash back program. Using these types of programs can result in between 2% and 5% credits back to your card. This is like found money!

12. Use coupons to purchase your inventory. Many drugstore and grocery store items sell well on eBay, and you can increase your profit margin by using coupons to purchase items to sell. See the resources section for links to websites where you can print free internet coupons.

13. See the resources links below for more tips and tricks to improve your eBay selling.

Tips & Warnings

• Take some time to analyze your expenses.
• A small leak can sink a large ship. Pay attention to the small details. Small fees add up over a period of time.
• Experiment and see where else you can find savings.

Resources

• My Free eBay Guide for Moms
• Print Free Grocery Coupons
• Discover Hot Items to Sell on eBay

[vincexu]

on 8/1/2009 BAD buyers at eBay will eat up your profit by running away after winning, disputing and leaving Negative for not good reason... An important step to increase your profit margin is to block them. At www.trustedblacklist.com lots of sellers share their blocked bidders/buyers list. Using latest list at your eBay account will save you lots of time and profit.

[ByDezin]

on 12/13/2008 Great info Suzanne, thank you! All these tips are just increasing my excitement for my own eBay ventures so that I can avoid pitfalls I may otherise have fallen into. It's great to have someone with your wealth of knowledge to turn to!

[atlantagolfshop]

on 11/2/2008 MTERRONEZ: What you have described about using the Tyvek envelopes is illegal. Not a good idea! This is definitely not a way to cut corners for these reasons:

1) if you choose to use the Tyveks for first class, don’t be surprised if you get an email from a customer saying he was charged extra in shipping. The USPS upgrades the shipping rate to Priority/Express if they catch you using the materials inside out. Not a very good way to impress a customer.

2) The package may be returned to you and the customer won’t receive it at all. You’ll have to pay to ship it all over again.

3) It is written right in the USPS Domestic Mail Manual that materials provided by the USPS with markings for Priority Mail may ONLY be used for shipping at the Priority Mail rate of postage. “Priority Mail Packaging Provided by the USPS - Priority Mail packaging provided by the USPS must be used only for Pr

[mterronez]

on 11/2/2008 Thanks for the ideas Suzanne. One thing I'd like to add, I use the free priority mail Tyvek envelopes and turn them inside out when shipping first class!

[mizzdavis]

on 7/24/2008 Thank you Suzanne. As usual you are always such a help and these are very clever tips. All those nickels and dimes end up at the end of the year!