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How do Ebay sellers do it ?

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  • How do Ebay sellers do it ?

    Hi,

    I have been selling a few small handmade wooden items on Ebay,& was going to buy some wooden items wholesale to sell along my items.Trouble is that some sellers are selling same item with free postage & I can't understand how they can possibly make a profit.

    As an example someone is selling a 2" wooden ball for £2.90 with free postage - royal mail would charge them £2.80 (as a small parcel )then they have cost of packaging.So how can they do it ? is there some secret way of reducing postage that I'm missing out on ?

    Thanks

    Keith

  • #2
    If a business sends out a lot of post they can get a business account with Royal Mail and get cheaper rates. I wouldn't have thought it was that cheap though!

    Would people normally buy these items singly or in quantity?

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    • #3
      For items where they expect to sell more than one item at a time they usually make a loss by offering 'free' postage. The greater number of items that are purchased by a single buyer, the greater their profit margin. I wouldn't expect a seller offering 'free' postage to refund money for over payment of postage.

      Also once you are a powerseller and have top rated seller status then you receive a discount of 15% of your final value ebay fees. The discount only applies if your listings meet certain criteria, for example items need to be despatched within 1 day, they must offer free postage and also a next day delivery service (e.g. special delivery). So for some sellers, combining the item cost with the postage can work out reasonably lucrative even though it doesn't appear to be from the outset.
      Carol
      Pop Up Zoo Greetings cards - Raising money for Sands in memory of my precious son Ben Folksy Shop, Facebook Page, You Tube
      Carol's Yummy Bakes - My new business Website, Facebook Page


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      • #4
        Yes if you have a RM business account or a franking machine you can get cheaper rates but it's not cost effective unless you're posting out lots (and some ebay sellers do post out hundreds a day). Haven't looked into the prices recently but do know our solicitors sent us a franked larger letter, it should have cost £1.24 but was only £1.06 if I recall correctly so I imagine the savings would be more for parcel size.

        I bought a wing mirror on ebay the other day, it cost me £2.20 with free postage - I know from the postage label it cost them £2.80 to post, they were a relatively new seller and I don't think they'll be around for long somehow. They actually sent me the wrong one but I didn't have the heart to complain....so if anyone wants a left wing mirror for a ford focus I've got one going begging

        Originally posted by the card shark View Post
        For items where they expect to sell more than one item at a time they usually make a loss by offering 'free' postage. The greater number of items that are purchased by a single buyer, the greater their profit margin.
        Thinking about it I remember my brother telling me he did this, he said the overseas multiple purchases were the ones where he really cashed in.
        Visit Natty Netty for a huge selection of Iris Folding supplies

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        • #5
          Originally posted by nattynetty View Post



          Thinking about it I remember my brother telling me he did this, he said the overseas multiple purchases were the ones where he really cashed in.
          This reminds me of a post on the ebay Powersellers discussion board.

          How someone ordered something that was 'free postage' from an ebay seller in China and it duly arrived with 0.00 franked postage. It made them wonder if certain countries like China actually do have a free postage initiative for some businesses over there.

          Generally, a lot of ebay sellers, myself included, hate the phrase 'free postage' because we all know it isn't free and is actually a misleading statement that could well be breaking the law.

          Apologies for being a bit off topic, just wanted to share.
          Carol
          Pop Up Zoo Greetings cards - Raising money for Sands in memory of my precious son Ben Folksy Shop, Facebook Page, You Tube
          Carol's Yummy Bakes - My new business Website, Facebook Page


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          • #6
            I have often wondered about this!
            Lyn
            Annie and Lyn
            www.rosiepink.typepad.co.uk

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            • #7
              Another reason that things don't look like they are making a profit is exactly that - they aren't.

              Lost count of the number of small businesses I have come across who just guess at costs or don't do their numbers before setting a price and although they might be really really busy when you break it down they are working for next to no profit.

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              • #8
                Apparently marketing is a revelation for you?
                Read any book on marketing and you will understand, I hope that all of the techniques you are the most common marketing approaches, which use very many sellers.

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