Tuesday, September 27, 2016

Another trick to keeping track of eBay overhead

Since I've been selling so much on eBay, I've decided to start paying my eBay fees as I go, rather than waiting until I'm billed each month. Obviously the downside of this is that I'm giving eBay money that I could rightfully have available to me for a few weeks, but the upside is that this way the debt gets taken care of and the money doesn't accidentally get spent. It's essentially the same dilemma as whether to have enough income taxes withheld to get a refund versus having the money available to you and then owing taxes.

Specifically what I've been doing is this:

  1. Someone makes a purchase for $50 and pays for the item plus $4 shipping, and $54 goes into my PayPal account
  2. PayPal takes a fee of $1.87 (2.9% plus 30 cents per transaction) immediately, leaving $52.13 in my PayPal account
  3. I ship the item, paying $4 for shipping out of the same PayPal account, leaving $48.13
  4. I go into my account settings on eBay, where they add the fees to your account in real time even though they only require payment monthly, and see that they've charged me $5.40 for the sale (10% of the total of the item price and the shipping price)
  5. I make a one-time payment of $5.40, using the same PayPal account, leaving $42.73 in my PayPal account
  6. Now that all the fees are taken out, the transaction is completely over, and I withdraw the $42.73 to my bank account
This is proving to be a lot easier than setting aside money for the fees, or even leaving it in my PayPal account. I don't have to keep a spreadsheet with fees or anything if I just make a one-time payment every time I sell something. If I sell more than one thing before I get to the computer to ship my purchases, I can still make a one-time payment of the total fees I've accrued, and it works out the same way.

This calculator is useful for figuring out in advance how much you'll profit from a particular sale price, though it isn't necessary to use it if you're selling things that cost you nothing to acquire and you're charging actual shipping price. Any item priced at 99 cents or above with actual shipping price charged will net you a profit. The profit is 5 cents though, so you probably want to go with a few cents more to cover your envelopes and labels if you paid something for them. The calculator is quite useful though if you're selling something that did cost you something to acquire, or if there's a minimum profit you're willing to accept for your time. Just pay your fees as you go, and you won't have to worry about keeping data on your overhead, unless you really want to.

No comments:

Post a Comment