How do you determine your eBay revenue?
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How do you determine your profit?
This question has been rumbling around in my head for rather a long time. There seem two various computations that can be utilized to identify revenue. Mind you, I'm not a Business School graduate - I'm excellent with math, numbers, and patterns, but some business ideas seem complicated. This is one of those ... Method 1:
I buy a widget for $10 cost (the total price I pay to have it in my hands). I note it and offer it for $20. Shipping expense & materials were $5, eBay/PayPal costs $3. Overall expense to offer $8. Net revenue $12 ($ 20 - $8).
Technique 2:
I purchase a widget for $10 expense (the total rate I pay to have it in my hands). I note it and sell it for $20. Shipping expense & materials were $5, eBay/PayPal charges $3. Total costs are $18. Net profit $2 ($ 20 - $18).
The very first approach does not account for the cost of the product sold, therefore pumps up the earnings figure, and thus inflates the profit percentage. You see people claiming these huge profit portions all the time-- "I made twice what I spent for it!" truly means he paid $10 and sold for $20. If you're closing your service, never to purchase for resale again, this might be real.
The 2nd technique appears more reasonable - it includes the cost of the item offered with all other expenses and shows a more pedestrian but possibly more honest revenue figure. This is the method I use when identifying whether a thing has a good margin ... what will it cost to obtain it, what will it cost to sell/deliver it, and just how much will I have actually left in the end.
With some products, due to their lower asking price and slimmer profits, I utilize a spreadsheet which even accounts for such mundane things as printer paper, toner, labels ... everything I might consider to save my time. The modern spreadsheet makes such things much easier: one cell is the expense of something - state a ream of paper (500 sheets). Next cell over - the variety of functional systems in the expense (500 in this case). The next cell is the cost per unit (cost/ usable units). Next, the number of systems required to offer this item, followed by the prolonged cost (systems required * cost per unit). Repeat on as many lines as required to account for costs. Overall them up and you have your Cost To Sell.
Whatever has an expense - even boxes and other shipping supplies/tools ... unless they are provided to your door for free whenever required. If you go get them, there's mileage cost (lorry cost, maintenance, fuel). Anything you purchase to aid you in the conclusion of the sale & delivery belongs of your expenses ... and gnaws at your earnings. Disregard these 'gnats' and they could cost you in the end.
So what say you all - how do you figure your earnings? Do you consist of the cost of the stock sold, based upon the assumption you will change it to sell once again? Or do you 'take the money and run', till the closet runs dry and you have nothing left to sell?
Or perhaps, as I am in some cases wish to do, I'm just overthinking all of this? Thinking about that expenses can many times be deductible, consequently decreasing your net income and your earnings tax due, maybe we should all provide a bit more time to ensuring we're representing all those little expenses that can add up in the end.
In all the time I have actually invested evaluating earnings, the single most time consuming procedure has been discovering good items with high earnings margins to offer. This is why I came up with ProductBot.com. With ProductBot.com, you instantly save 90% of the time invested examining items and find the most rewarding items to offer within minutes, not hours. There is nothing like it!
Spun Version:
How do you determine your earnings?
This issue has really been rumbling around in my head for rather a very long time. There appear two various calculations that can be utilized to identify earnings. Mind you, I'm not a Business School graduate - I'm excellent with math, numbers, and patterns, but some organization ideas appear made complex. This is among those ...
Method 1:
I acquire a widget for $10 expense (the total rate I pay to have it in my hands). I list it and offer it for $20. Delivering cost & materials were $5, eBay/PayPal expenses $3. General cost to provide $8. Net profit $12 ($ 20 - $8).
Method 2:
I purchase a widget for $10 expense (the general expense I pay to have it in my hands). I note it and offer it for $20. Providing expenditure & materials were $5, eBay/PayPal charges $3. General costs are $18. Net profits $2 ($20 - $18).
The really first technique does not account for the expense of the product offered, for that reason pumps up the earnings figure, and therefore inflates the earnings part. You see individuals stating these substantial profits portions all the time-- "I made two times what I spent for it!" really suggests he paid $10 and cost $20. If you're closing your service, never to purchase for resale once again, this might be real.
The second approach appears more reasonable - it consists of the expense of the item offered with all other costs and shows a more pedestrian nevertheless potentially more truthful profits figure. This is the technique I use when figuring out whether a thing has an excellent margin ... what will it cost to get it, what will it cost to sell/deliver it, and just how much will I have left in the end.
With some items, due to their lower asking rate and slimmer earnings, I use a spreadsheet which even represents such ordinary things as printer paper, toner, labels ... whatever I might think of save my time. The modern spreadsheet makes such things much easier: one cell is the expenditure of something - say a ream of paper (500 sheets). Next cell over - the range of usable systems in the expense (500 in this case). The next cell is the expense per unit (expense/ usable systems). Next, the variety of units required to offer this item, followed by the prolonged cost (systems required * expenditure per unit). Repeat on as great deals of lines as needed to account for expenses. Total them up and you have your Cost To Sell.
Whatever has a cost - even boxes and other shipping supplies/tools ... unless they are provided to your door for free whenever needed. If you go get them, there's mileage expense (vehicle cost, upkeep, fuel). Anything you purchase to assist you in the conclusion of the sale & delivery is a part of your expenses ... and gnaws at your profits. Ignore these 'gnats' and they might cost you in the end.
So what say you all - how do you figure your earnings? Do you include the cost of the stock offered, based on the presumption you will change it to provide once again? Or do you 'take the cash and run', till the closet runs dry and you have definitely nothing left to offer?
Or perhaps, as I am often wish to do, I'm just overthinking all of this? Considering that costs can often be deductible, for that reason decreasing your net income and your earnings tax due, maybe we need to all provide a bit more time to making certain we're accounting for all those little expenses that can build up in the end.
In all the time I have actually spent taking a look at earnings, the single most time consuming procedure has been discovering excellent products with high profit margins to provide. This is why I developed ProductBot.com. With ProductBot.com, you immediately save 90% of the time spent examining products and find the most rewarding products to offer within minutes, not hours. There is absolutely nothing like it!
