When I just started selling on eBay, all I knew about making a profit from eBay sales was that I had to pay eBay PayPal fees for every sale, which were approximately 10% of the total item sale price. I certainly wasn’t using any eBay profit calculator. I’ve already mentioned this briefly when writing about the 3 deadliest mistakes we did that nearly killed our business, but I feel that there is not enough practical information about this and it’s too important to ignore.
Sure, there was an insertion fee, but it was so negligible that I didn’t take it into consideration when calculating my profit.
I was working from home so I didn’t have any expenses on office rent and I was drop shipping, so I didn’t have to physically store any items in my own space as my supplier was handling all the logistics, including the storage of goods, packaging and dispatching.
In the first weeks, when I didn’t know if I was going to do this as a real business, I didn’t even register any sort of business entity, so there were no expenses on registering a business entity and hiring an accountant for bookkeeping and annual reports.
All I knew was that if I sell an item for $50, my expenses would be:
- A final value eBay fee = $4
- PayPal fee = $1.5
- Item cost with shipping = $40
So after paying my supplier and deducting the eBay and PayPal fees, my profit would be: