eBay Selling Tips: 5 Ways to Calculate Your Profitability

As a reseller, your primary goal is to make money. With that in mind, it’s important to understand the variety of factors that can impact your profitability. Anything from customer demand and competitor pricing, to shipping costs or general economic ebbs and flows can have an effect on your business. 

Planning ahead and adjusting expenses is key for protecting yourself and your business from these factors. Below are five eBay selling tips to consider when calculating your profitability:

Determine Upfront Expenses and Operating Costs

Running a successful business requires both upfront and ongoing investment.

When it comes to tracking spending, organization is key. Make a list of all costs, including items such as monthly seller subscription packages, product acquisition costs, and advertising and shipping expenses. Budget what you’re willing to pay for each, and consistently review your these expenses to stay on track.

It’s also important to reevaluate your budget frequently to ensure your overall spending balances with incoming revenue. Generally, the price at which you sell an item should cover three things: the amount a customer is willing to pay for the item, a portion of your operational expenses, and your profit. Make sure your expenses and listing price operate in tandem to bring a profit at the end of the day.

Analyze Sales Trends

Keep track of your sales and analyze trends. Do certain items in your store rise in popularity during particular seasons (shovels, beach towels, etc)? Is a certain technology you sell soon to be replaced by an updated model? Use tools like CheckAFlip or Mark Sight, which give a big picture of how certain items are priced and what percentage of those items are selling. Anticipating ebbs and flows can help you determine how much revenue you’ll pull in to help balance costs accordingly.

Evaluate the Competitive Landscape

Another way to anticipate demand is by evaluating how many other sellers are offering similar products. Research other resellers by typing specific items into the eBay search bar. Take a look at their inventory to see what they have, what condition those items are compared to yours, and how quickly items are being sold. Keep track of their pricing methodology and make sure that your prices are on par, if not better. 

Pay Attention to Market Changes

Certain economic trends can also affect your profitability. Keep track of consumer spending reports that estimate how much shoppers are spending each quarter. A decline in overall spending could mean a decrease in discretionary income and signal changes in your sales estimates. You should also keep track of price increases for third party services that you rely on — like shipping costs. Market changes may be beyond your control, but staying on top of trends can help you anticipate changes and make adjustments. 

Determine How Much Your Time is Worth

Is reselling your full-time gig, or is the time you spend pricing and listing items taking away from other, more profitable income sources? Diligently record how much time you spend contributing to your reselling business and compare with total profits. 

Running a successful reselling business takes time and energy. Before you start, research eBay selling tips. Make sure you choose inventory wisely by balancing popular products with items that you’re able to source at reasonable prices. Once you’re up and running, diligently track products sold and their prices, product costs, promotions, and shipping to determine the overall ongoing health and profitability of your business.

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