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How Profitable is your eBay Business? Read to Find Out!

Starting new on eBay? Or maybe you’re an established seller?

Whoever you may be, you need to make your business profitable. And part of that is knowing how much you pay eBay in fees.

Most businesses pay around 10% per sale as a fee to the site. This of course is a rough estimate that includes a multitude of fee types.

That’s right. The website has many types of fees, and if you’re not careful, you might end up losing a ton of your profit margin.

So don’t make that mistake. Instead, opt to use an eBay Profit calculator!

Who Needs That?

Everyone. It’s the best item you can use as a dropshipping business. It works really well too when you’re struggling with business rental fees, and every dollar matters.

But even as a low-cost startup, you still need the calculator.

You might not be a registered business entity, thus not needing an annual report or an accountant.

You might still be testing the water with selling eBay products. You might deal with entities who manage all the logistics for you.

But we still recommend using that calculator. If not as a necessity, then do it as a good long-term habit.

With that, let’s get into more detail on using that calculator…

It Looks at Some “Sales Hiccups.”

By that, we mean unexpected returns.

Sometimes you’ll sell an item, then run into a customer who wants to return it. And they’ll do so for a multitude of reasons.

Most are ridiculous, to be honest. Nevertheless, you do it for the reviews, and it’ll still cost you dollars.

A profit calculator helps you pick up on that. It lets you see how much you lose per return, thus letting you adapt your profit margin.

An Example.

Let’s say you’re selling hats, and a customer returns one because it’s not comfortable for them.

As a dropshipping business, you pay costs on return shipping and restocking. You might then pay import fees, something you’d rather avoid.

In certain scenarios, suppliers won’t accept your returns – and you lose the product’s full cost.

When you keep track of all those returns, you get to know the % of your profits that gets shot down by them.

Here’s a simplified process of tracking every return and its costs:

  • Start a spreadsheet on excels. Write in every return cost for the month
  • Summarize total return costs per specific month
  • Add up the total revenue for that month
  • Check the % of return costs relative to total revenue
  • Repeat for three months, then extract an average %

Minor Expenses Adding Up Over Time

Return costs aren’t all there is to eBay fees.

There are multiple minor expenses that you might be ignoring. They include store subscriptions, insertion fees, bank charges, domain costs, and more.

If you break all those down, you’ll realize that they eat up a large amount of your profit margin.

Be sure to calculate your total expenses, then evaluate how much it takes out of your full month’s sales.

How to Do That?

Your first option is a fee calculator.

It’ll aid you in understanding the full fees you’ll pay per product sale. You can factor in stuff such as selling format, product category, listing enhancement, and shipping fees.

The second is a fee illustrator. It analyzes and finds you the store format that works for you!

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