If you’ve been following this little challenge then hopefully it has had you eagerly awaiting how it finished! Finally, in this post, the results are in and we’re going to see if we have actually been able to make money reselling the same items on eBay!
In part 1, we explained the task we’d set ourselves. It was a simple challenge: buy stuff on eBay and then sell it straight back on the same platform to see if we could make money. At that point we were like..
It doesn’t sound like it should be possible to do it, but here at The Money Mountain we laugh in the face of what’s possible. If there’s even a sniff of a chance of making money, we’re going to give it a go.
After we bought our items, we took stock of the situation in part 2. You may remember there was a bit of nervousness – dare I say some buyer’s remorse – about whether the right decisions had been made. Would we be able to make a profit?
Two of us completed the challenge, would one or both of us manage to make any money?
How much profit did we make through eBay reselling?
Chris
My strategy was to buy poorly-presented items that were selling at inconvenient times and fix these problems to make a profit.
And with a bit of effort (and by knowing how to take good photos for eBay), that’s exactly what I managed. With quite astonishing results:
I managed to increase the value of the items by a total of £16.55! One of the items I managed to sell for nearly 10 times what the original seller got for it. When I first saw this, I thought I’d found a way to print money!
But sadly, this didn’t equate to my profit. Transaction fees have taken a huge amount of that, leaving me with a much lower amount. Let me show you how it all broke down after eBay and postage fees:
eBay fees are calculated as follows:
- eBay charge a final value fee on the sale price plus the postage you charge. It’s a flat 10%.
- PayPal charge a total of 3.4% plus 20p per transaction. That’s on the total amount you receive from the seller (before the 10% eBay fees).
Very quickly, my £16.55 of increase in value reduced to a total profit of £6.82. Not quite as great as I initially thought, but a profit nevertheless.
Ben
Having been ebaying for years I thought I’d finally struck gold with a challenge I would be able to waltz through with my eyes closed. As discussed in Part 2, the key to making money in this challenge is buying right – this is easier said than done. As Chris said above, by the time you’ve paid everyone, there is precious little left over, so shaving even a few pennies off the purchase price of your item makes a huge difference in terms of profitability.
My strategy (as detailed in Part 2) was to look for items that had spelling mistakes in the listings. This was much more difficult than it sounded and even typing in “iPone” or “Raph Lauren”, while yielding lots of results, the purchase prices were simply too high to be of interest…
…this in turn brings me to the heart of the matter. You will spend quite a lot of time trawling through eBay looking for that one item you can buy and sell at a profit. I have made a reasonable amount in terms of %, but in actual £ it is barely worth it and if you divide it by the amount of time it has taken me, even less so. That said, it depends upon your motivation; are you doing it for fun, are you doing it because you like the challenge of it or are you doing it purely to make money? If it’s the latter, I’d suggest you might want to get yourself a paper-round as well to subsidise your income.
There is no doubt about it…I got VERY lucky with my first purchase: The Steiff teddy bear. Brand new, with tags and paid a tenner. I then got EVEN LUCKIER when I sold it to a chap in Japan who was happy to stump up the postage as extra whereas, had I sold it to a UK buyer, postage was included.
My second purchase was a little more of a gamble: A pair of “uniquely” sized “Tommy Hilfger” trousers in green. They were well priced and cost me £6.44 including postage. I had to be able to turn a profit on these, didn’t I?
Steiff Teddy Bear
“What were the numbers on this handsome little fellow?” I hear you ask…
Sale price inc. postage £40.00
Purchase inc. postage (£10.05)
Ebay fees (£4.00)
PayPal fees (£2.36)
Postage (£10.15)
Total (£26.56)
Profit £13.44
With a profit margin of 33.6%, this is a handsome win in % terms, but amounts to less than minimum wage for all the effort put in in terms of searching, buying, listing, packaging and sending.
Tommy Hilfiger Trousers
Sale price inc. postage £14.99
Purchase inc. postage (£6.44)
Ebay fees (£1.50)
PayPal fees (£0.71)
Postage (£2.95)
Total (£11.60)
Profit £3.39
A respectable 22.6% profit margin, but a pretty average real money figure and if my time were factored into this, I would be running deep into the red.
What lessons did you learn in this challenge?
Chris
The big lesson for me is that eBay is miles away from being a perfect market. For me it was a clear case study in how to achieve the best price possible on eBay. I felt a little bad for the people I originally bought the boots off – with better presentation of their items, and if they scheduled their listings at better times of day, they would have made a lot more money.
It brought it home that if you want to maximise the money you make on eBay then there’s no two ways about it you absolutely must:
- Take the best photos you possibly can
- Write a decent item description
- Make sure the auction ends at a decent time of day
In the case I found, not doing this can lead to you getting only 10% of what an item could be worth. And that’s going to make you really sad:
Ben
While I was very happy to add some £££ to the running total, it hasn’t been lucrative at all. Across the two items I have probably made around £8p/h which, while not to be sniffed at, isn’t the most productive use of my time.
One can argue a moral standpoint here too…profiting from others misfortune is questionable, but I have to say that in this instance, I can live with it – the free market decides the value of goods and services and had the sellers not been happy to sell at the price they did, they wouldn’t have and similarly for my buyers. They felt what I was offering was good value and were happy to part with their £ (and Yen!) for them.
There is a piece of me which quite likes all the different costs involved. From the money I and my buyers spent, we have supported the original sellers, ebay, paypal, the Royal Mail and the taxpayer in Luxemburg (where ebay has it’s EU HQ) – it is afterall, what makes the world go around.
Is this a decent way to make money? Would you do it again?
Chris
The big winners here seem to have been Royal Mail, eBay and Paypal. Between the three of them they’ve taken an enormous cut of my profits.
There’s not much you can do about the eBay fees, which are a hefty 10% of final value costs (and that final value unbelievably includes the postage). Nor can you avoid the Paypal costs either, since eBay make you offer that as a payment option. At least eBay put me in touch with lots of buyers who I wouldn’t otherwise have been able to reach, so I guess they did somewhat earn their fee.
But all in, fees have really reduced my profit. That’s been my big learning point.
Would I do it again? Yes, I’m going to dabble with this a little more to increase my sample size. When I’ve sold 20 items I’ll have a good sense of whether this is a waste of time or not. At the moment, I’m thinking this is not the most lucrative way of earning money.
Ben
I will continue to monitor ebay and see what comes up under misspelled items, but I won’t be spending a huge amount of time trawling through listings. I will however continue to sell through ebay and we’ll have a couple of new challenges in the new year.
As Chris says, it puts you in contact with a huge, global market. Having tried to sell items on Spock and Gumtree in the past, I can say that my best results have always come from ebay. So, while the fees may frustrate you, it remains for me, the best marketplace to sell unwanted items, but proves challenging when looking to buy and sell through the site.