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by Lloyd A. de Vries

Vol. 32 - The Only Game In Town

EBay has a service for its sellers called a Sales Summary. I signed up for it, and it kind of confirms what I already knew.

I'm spending too much on eBay and PayPal fees.

Now, in order to sign up for the free basic service (and, presumably, the $4.99-per-month premium service), I had to agree not to tell anyone anything that's in my eBay Sales Summary, not even my mother. I also can't say anything disparaging about eBay. In fact, I'm probably violating something or other just by writing that there is an eBay Sales Summary.

But what the first reports showed was that about one in four of my listings (am I allowed to tell you they're almost all, almost always, Fixed Price?) was successful, and three in four were not. I paid eBay and PayPal, combined, about half as much in fees as I grossed in sales.

Which is kind of gross, when you realize that the rule of thumb in (professional) retailing is your Cost Of Goods Sold should be about 50 percent. I don't know if that holds true for my FDCs — I'd rather not look — but if so, that means I spend half my eBay income on the covers I'm selling, and half on eBay fees, leaving nothing for postage, packaging, and profit.

I haven't checked to see if all the PayPal fees summed up in the report are from eBay sales; I also sell first day covers and philatelic books using PayPal's shopping cart system on my Web sites (including here at The Virtual Stamp Club) and Stamps2Go. If the Sales Summary just added together all my PayPal fees for the month, instead of just the PayPal fees incurred for eBay sales, that would make the figures look worse than they really are.

I stopped looking at the Sales Summaries for awhile. When I signed up again, the percentage had improved. On a good month, it's only about a fourth of my gross sales.

I knew I was spending a high percentage of my sales on eBay on eBay fees, though the last time I did the calculations, it was about one-third of my gross eBay income.

I still plan to continue to list on eBay, however, and at fixed prices. The other venues I mentioned don't generate enough revenue, plus there's always the chance that I'll sell an eBay customer something off my Web sites. In fact, in my post-sale e-mail to eBay customers, I offer to include items off my site for no additional shipping charge. I wouldn't meet as many new customers without eBay.

Making fewer first day covers would increase my unit cost, so even breaking even on the items sold on eBay allows me to make more money on the items sold elsewhere.

As for fixed-price sales versus floating-price auctions, eBay charges the same fee for one fixed-price item or four, as long as the total of the potential sales falls within the same bracket. So I can list 4 fixed-price items, each at $2.49, for the same fee (35¢) as listing one $2.49 auction item. A seller has to weigh the potential of two bidders slugging it out and raising the price to unlikely heights, versus the potential of selling multiple copies for a lower fee.

Recently, I offered the last copy of what I thought was a pretty good topical first day cover, featuring dogs, as an auction item instead of a fixed-price item. I started it at fixed-price price, and ...
... it sold for exactly that starting amount.

It confirmed my inclination take the money and run with fixed-price lots.

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