Ask Dan: What percentage of my listings should sell?

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Whirly asked: At what level would you deem an ebay business to be failing or in need of change or successful in terms of sold and unsold items, for example:
Ended listings in last 60 days: Sold : 10; Unsold : 40
Based on your experience, is there a level you should be achieving,, 50/50 70/30 ?? or at the end of the day doesn’t it matter as long as you are making a profit.

To my mind the question has the wrong focus. Conversion (the number of items you list that sell) and take rate (the percentage of turnover paid to eBay/PayPal) are hugely variable across the eBay site. There aren’t any neat answers as to what’s good or bad. But since you ask, it’s worth suggesting some general principles:

  • You want to sell as many of the items you list as is possible.
  • You want to pay eBay/Paypal as little as possible. (And Mountie is the expert on that!)

The nub of this question is really about profitability. A seller can list a fair few high value items consistently over a few months, not sell a thing, pay a whack in fees and then make a single sale and be profitable. Equally, another seller could list thousands of items, sell them all, pay a low percentage in fees and still lose money.

The bottom line is, to state the obvious, the bottom line. Your conversion rate and take rate are personal to you and they are just numbers you’ll need to inform your decisions because they help you assess profitability. This is business. Profit is sanity. Everything else is vanity.

If you have questions for Dan, post them in our forum.

25 Responses

  1. One general guideline worth remembering is that whilst it’s not a good thing to pay *too* much in fees to eBay/PayPal, it’s almost as bad to pay too little. If you don’t pay enough in fees there’s a pretty good chance that you could be missing out on sales through not getting enough exposure on the site.

    As a general guidline for most businesses spending between 10-15% on eBay/PayPal fees is a good place to be. Any more and you could be saving fees, any less and you could be getting more sales, but as Dan says each business is different and those figures shouldn’t be taken as an unbreakable rule 🙂

  2. It also depends on what category you’re selling in. As eBay move more categories towards the Media pricing model, where fees are much more heavily weighted towards FVFs, there’s a lot less scope to save money by canny listing strategies, but higher fees are much more likely to represent more successful sales, and so should hurt sellers less.

  3. I wish gallery was free, but I wouldn’t want to be forced to have it and pay more for it. Who needs gallery for CDs/DVDs when you know exactly what you are getting anyway? (And more than half the listings use stock photos so that tells you nothing at all).

    But for jewellery on the other hand – gallery is essential.

  4. We sell primarily in the Media pricing model. List cheaper – pay higher FVF
    As a volume seller we like this model because fees reflect success. If you’re not selling – lower fees. If you’re selling successfully – higher fees. As we all know any idiot can list items for sale, but only sellers offering a complete package i.e. sufficient product information within the listing, fast response to sales, dispatch and communication with buyers will achieve success. We believe that the future lies in lower listing fees and higher FVF. We agree with Dan and think gallery should be free. If it promotes sales then surely it must be in ebays best interest especially if this model takes off.
    PS Happy New Year

    there are lots of theories, plans, schemes, and opinions, experts out there and you cant spend any of them,
    its what works for you is the answer

  6. I would bet a fairly large amount of money that Gallery will be “free” before the end of 2008: i.e. it will be included in listing fees.

  7. I wonder how that will affect the fees for very low cost i.e. under 99p items? I don’t put galleries on 99p items as it wipes out any profit ( btw I don’t start good stuff at 99p and expect it to make its money – I put clear-out stuff on at 99p that I expect to make 99p!).

    If they include a gallery fee in the main fee for under99p, will it make it unviable for a lot of people?

  8. That’s going to depend on how the rest of the pricing works though Lynne. On eBay France they did just that: iirc the fee without Gallery went up 5c, the fees if you were already paying for Gallery went down 10c. I’d argue eBay don’t really want 99p/99c items and possibly won’t worry too much about a 99p finish item becoming unviable. (But that’s just my guess so FFS people don’t start a panic yet :-D)

  9. Depends what they do with the price breaks though North – there’s a “step” at 99p->£1. At the moment it’s only 5p difference on, so you’re probably right; though on e.g. .fr, it’s 20c to list €1 or less, and 35c to list €1,01 or more, so that’s not necessarily a solution.

    In other words, if you’re going to sell cheap stuff, you have to know the fee schedule absolutely off by heart.

    … she said, trying desperately not to look quite as sad as she really is 😀

  10. I take my hat off to those, that sell cheap stuff on ebay. who survive in a market where profit margins are tight and fees really are the make and break of the transaction,

    fees dont really matter with my listings other than they can creep up on you if your stupid or careless

  11. I think as long as each seller forecasts the fees (insertion, fvf, paypal) and prices accordingly, profits can be projected and made. A simple spread sheet to keep track of said fees and profits will help each seller understand how the fee structure affects them each month in sales. Some trial and error with listing tactics in each items’ categories will also help, as well as studying past sales on eBay to see what worked and what didn’t.

    It’s odd that I can watch the same item I have for sale being sold (or not sold) by several other sellers for two weeks. I learn what worked (high start with no reserve or low start with reserve vs. plopping it in the store to sit for a month) and often my item will oversell the others. Not that it always works that way, but often my price is more than the others and it sells.

    I’ve always said eBay is a strange, wild animal, and will never be tamed. Even a good amount of Power Sellers have to take cuts in profits and hope to make it up in quantity. That, unfortunately will hurt the average seller with less quantity who needs to make a higher profit to survive. Wow, I’m throwing a tangent flag on myself, sorry…

    Great articles on your blog. Keep it up!

  12. The key things that some seem to be missing is sell-through rate, cash flow and keeping an eye on what sells and what doesn’t. I have a spreadsheet capable of working out profit margin including all fees, etc. to 0.1% if needed. 🙂

    However, having to relist over and over again eats into profit margins and can kill cash flow, esspecially if you’re listing hundreds or thousands of items. If you’re selling loads of lines you need to keep a close eye on what is actualy selling and what’s not. There’s no point in continually relisting stuff on eBay if it doesn’t sell. Hence I’m using Amazon to dump some poor sellers on as it costs nothing to keep it listed and eating up profits.

    While on the subject of slow sellers, it makes more sense for cash flow to reduce the price a bit and sell it through quicker. Much better to dump slow sellers quickly and put the money back into good sellers.

    Profit is indeed king, but cash flow and the lack of it can be and is a killer for any small business.

    My top tip for what it’s worth is to subscribe to ebay’s “File Exchange” (it’s free) and pull off a spreadsheet every month or two and see what’s really selling and what’s not. When you carry hundreds or thousands of lines it’s easy to miss what’s happening and I can promise you’ll get some surprises.

    With a little work you can increase sell-through rate qutie dramatically, I know I have. Be utterly ruthless on poor selling stock.

  13. I just spread a sheet out to hold all the money I make,
    spread sheets, data, sell thru, etc etc is for the birds,
    I sell !if I dont sell I starve! is the only info I need

  14. Struth this place gets like the powerseller board some times. Try to help and all you get is smart arse remarks. Well, I wont bother again!

  15. who made a smart arse remark? and by the way…most people on the powerseller board are smart arses (well, speaking for myself)

    That must be a big sheet North’, I gave up even counting once I couldn’t see the floor for £50 notes.


  16. Josordoni,

    Of course, Gallery represents a significant revenue stream for eBay. I think that we’ll be looking at lower insertion and greater FVFs as a general rule. BUT it might not be that eBay recoup the full loss in the fee changes.

    It could be a case of taking a slight hit but keeping an eye on the ‘buying experience’. Judging by comments from eBay execs, improving the experience of buyers is of paramount importance too.

    It is crazy that every item isn’t represented by an image in search and browse results. It’s a terrible buying experience and an anomaly from the past in an age of highly limited bandwidth.

  17. if this place gets like the powerseller board I am off too,

    On the subject of gallery,
    how on earth do ebay justify the cost difference between the UK & US with the enlarge feature, or even how on earth do they justify it at all considering Dans comment

  18. Norf,

    Tot up all those little fees and admire how many zeros the number has and you’ll work out how it has been justified all these years. ;o) I’m hopeful this will change, however.

  19. It is not only on eBay that changes in costs mean a change of emphasis of course, and we should not forget how many B&M businesses were hit when the business rate formulas changed (back in the early 90s I think) …much harder for these companies than these fee changes will ever be.

  20. At the end of the day to succeed in business you have to adapt, higher fees, higher fvf, higher rates or rent whatever the challenge you beat it or quit…last time I checked moaning about a problem never made it go away…anyone who thinks for one minute Ebay will think “you know what, why don’t we give the sellers a break this year” is on another planet…

    I assume that most posters on here are powersellers, so we’ve all managed to do very well upto know and there have been a lot of chnages over the years, we beat them all by changing the way we do business.

  21. Pete will be pleased to hear I’m trying to sort a way that comments can be edited 😉

    And (and I’d like this to be the end of the matter), if TameBay gets like the Powerseller Board, I will take it offline myself.



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