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Hi Everyone,
Books has been the hot topic tonight but generally it is important for all seller sto consider their profit margins before deciding whether to sell a product.
Net profit is the amount remaining after all of your expenses have been subtracted. Here are some of the business costs you need to consider, all of which eat away your gross profit to deliver your net profit.
• Cost of purchasing each item
• Cost of having the item delivered to you by the supplier, unless it’s free
• Phone calls, letters and travel to your actual and potential suppliers
• eBay fees
• PayPal fees
• Bank and credit card fees
• Postage and packaging costs not paid for by your buyers
• Cost of printing flyers, invoices, thank you notes etc, and the cost of the paper they’re printed on
• Other marketing costs (such as Google ads, letter box drops, print advertising etc)
• Electricity costs of running a computer and printer, and the light over your head
• Cost of petrol it takes to deliver your products to the post office, and the cost of maintaining your car to do so
• Cost of your computer and printer and any other equipment you use to make your business professional – the telephone, fax, filing cabinets, software etc
• The hourly rate you pay anyone to help you (you may have friends or family help out for free but the bigger your business gets, the less you can rely on free labour)
• Cost of storage / warehousing (this includes space in your house – if you can’t use it to do anything other than run your business, it becomes an additional cost)
• Cost of items that are lost, stolen or damaged (though some may be covered by insurance)
• Accounting, legal, and other professional fees
• … and this isn’t by any stretch of the imagination an exhaustive list of overheads.
When you think about profit, slow moving stock (five months or two years to make a sale) really needs to be carefully considered.
Todd
The eBay Team
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