Business owners often make the mistake of focusing on overall revenue instead of profits. While this is dangerous in any business, it is especially so in an eBay business. The problem is that this type of thinking is promoted by eBay where you need to reach a certain level of sales volume to qualify for their Powerseller programs.
Selling products online, even if they’re not making money on them, just so you can build up your positive feedback, is not good business. If your primary focus isn’t on the amount of profit your eBay, or other online, business is making, then you won’t have that business for very long. Thinking that if you have enough gross revenue that there will be some net revenue simply doesn’t work. It’s very possible to have high overall sales volume without making any money.
There was a time when I was more active with selling on eBay that I sold tens of thousands of dollars worth of merchandise every month, but when I actually sat down and crunched the numbers, I had actually LOST money for the month. There were other times where I had far lower sales volume, but over half the revenue was profit. Guess which method I ultimately stayed with!
Early in my eBay business, I thought that as long as I got my sales volume up, I would make a nice profit. After all, I was selling for more than I paid for the items. What I found was that the more I sold, the more time it took to fulfill the orders, the more packing materials I had to keep on hand and the more fees I had to pay eBay. Unfortunately, I wasn’t keeping proper track of the added cost of all these items.
The problem was that I was looking only at how much the item would cost me and then making sure I sold at a profit. If the selling price was higher than my cost, even just a little bit, I would buy it. I quickly wised up (probably because I had to in order to stay in business) and started to focusing on items I could purchase and sell for a nice profit AFTER factoring in my real acquisition costs. While my overall sales volume dipped, I actually made more money, and had more time to pursue other profitable business interests.
If you are expecting your eBay, or other online, business to be open a year from now, be sure to focus on the right numbers; the ones on your bottom line, not just the top.
Looking for more about eBay selling. Please visit Jack Mayer’s site where you can download a FREEcourse on becoming a successful eBay marketer.
