ShareArticle.info

InterServer Web Hosting and VPS

Why An Ebay Seller Needs To Keep A Close Watch On Profits Not Sales Volume

Title:

Why An Ebay Seller Needs To Keep A Close Watch On Profits, Not Sales Volume

Word Count:

448

Summary:

One mistake that business owners make is that they focus on overall revenue instead of profits. While this thinking is flawed in any business, it can be especially dangerous in an eBay business.

Part of the problem is that this type of thinking is promoted by eBay. For example, you need to reach a certain level of sales volume to qualify for eBay Powerseller programs.

Sellers will also frequently sell products even if theyíre not making money on them just so that...

Keywords:

ebay, auction, profit, money, business, sell, volume, gross

Article Body:

One mistake that business owners make is that they focus on overall revenue instead of profits. While this thinking is flawed in any business, it can be especially dangerous in an eBay business.

Part of the problem is that this type of thinking is promoted by eBay. For example, you need to reach a certain level of sales volume to qualify for eBay Powerseller programs.

Sellers will also frequently sell products even if theyíre not making money on them just so that they can build up their feedback.

Iím here to tell you that if your primary focus isnít on the amount of profit your eBay business is making then you wonít have an eBay business for very long. Itís not true that if you have enough gross revenue that there will be some net revenue around. Trust me; itís possible to have a lot of overall sales without making any money.

I remember back when I was more active with selling on eBay that I had a lot of months where I sold tens of thousands of dollars worth of merchandise every month, but when I actually sat down and crunched the numbers, Iíd actually LOST money for the month. Then there were times where I sold only a few thousand dollars worth of items, but over half the revenue was profit. Can you guess which method I ultimately stayed with?

When I first started my eBay business, Iíll admit that I had this flawed thinking that as long as I got my sales volume up, Iíd make more money. What I found was that the more stuff I sold, the more time it took up to fulfill the orders, more packing materials I had to keep on hand, and the more fees I had to pay eBay. The added cost of all these items wasnít necessarily added into my acquisition costs.

The flaw in my thinking was looking at how much the item would cost me and then looking to see how much it sold for. If the selling price was higher than cost, even just a little bit, Iíd buy it.

Eventually I got wiser (probably because I had to in order to stay in business) and started to focus on what items I could purchase and sell for a nice profit. While my sales volume definitely dipped, I made more money, and actually had more time to pursue other business interests.

So if youíd like your eBay business to still be open this time next year, then make sure youíre focusing on the right numbers Ė the bottom line, not the top.