Technology & Social Media Ebay surprise

It is not greed.

It is called trying to make a living - hopefully a good one.

Noone begrudges the CEO of Disneyland making $60k per day, yet a small business owner is greedy if he wants to generate a 6 figure income for all his toil and extensive financial risk?

A retail store has a huge range of costs to account for that an online business doesn't.

Many online businesses can be operated from someone's house, with no staff. The overheads are a fraction of the retail store, and there is no pilfering or theft to eat into the profits.

I'll give you one example of what goes on; let's take your leather jacket as an example.

I used to work in a boutique menswear store many years ago part time while I was playing golf tournaments.

The mark-up on every single item in that store was at least 100%., and on some things such as after-shave, ties, belts and other smaller accessory items it was 200%. This doesn't mean you will get that figure in the end.

Now, some folks might think 100% is steep. They don't have a clue.

Only other business owners here will know the truth.

With clothes - your leather jacket for eg - most of the range is bought 6 months in advance to allow for manufacturers to get the orders filled before the season arrived - buying in winter for the summer, and so on.

So, the retailer has to estimate how much of this stock they are likely to sell over that upcoming season. There are no returns of stock - once you receive it it's yours (unless it is defective).

So, at the end of the season you more often than not have a number of items that noone wants, or the style was a dud, etc.

These items get "specialled off" at cost price, or hopefully slightly above to cover holding costs. You may end up with 30% of the stock unsold, or you may run out before the season ended; noone was able to know.

The real gross profit at the end of the day on that range might only be 50%.

Take out all the running costs, my wage, and so on..there is not a whole lot left for the business owner who employed me.

My Boss in that store was a terrific bloke, a nice family and made a decent living - he was not rich by any stretch.

His store is now gone.

Thanks to folks such as yourself.

Of course; the glib answer to all this is; "Well; he can just start up his own online business!"

Indeed. We can all do that; close down our retail and set up in the living room.

 

It's blatantly obvious that you are not in retail.

Firstly, as not a lot is manufactured here, it has to come from overseas. So, exchange rates play a part. Then, you have to buy from the wholesaler in many instances, as a lot of product is tied to wholesalers, meaning even if you wanted to import the stuff directly, you can not. Add to this that in Australia, a retailer has to pay 10% GST on everything they sell, even if they are an online store selling via Ebay.

I sell some via Ebay. I import most of my stock, but do use a few local suppliers for others. After I pay import costs, plus duties, Ebay fees, Paypal fees, and postage, there isn't a lot of profit left. For instance, I sell one product for $80 with free post. It is large, so postage is very expensive if they are from, say remote WA. The postage alone could cost me $30. I HAVE to include free postage, to entice people to buy from me, and not go looking locally for the same product. THEN I pay Ebay around $8, and paypal another $1. Because I buy directly from the USA supplier, I get this item for USD$15, by the time I get it here, to my door to sell it, the total cost to me is around $39.

Of course, not every buyer is from remote WA, so I do make more on the local ones, and even if they come and collect from me, I charge the same price.

Lets add up my costs, shall we.
$39 Product
$30 Postage
$8 Ebay
$1 Paypal
$78 Total, and I haven't even done any calculations for GST.


So....please explain how I, as a seller am greedy?

 

I'm going to jump in here & correct a few things.

Online Businesses still have overheads, and sometimes large ones. My biggest expenses are Ebay fees and postage. I haven't finished this years figures yet, but, not counting June, I've paid out around $30k on postage, and around $15k on Ebay fees. I do have my own website as well, so I have hosting fees etc to go with that. I don't pay for SEO, but I've looked at what it would take to get my website churning over a decent amount (so I can chuck Ebay), and I honestly don't thing the costs (and my time) would be worth it. I do make more money from items purchased through my website, because I don't get whacked with Ebay fees, and I can often add the postage on top of the item there.

Yes, I do work from home. I could rent a warehouse, but I choose not to. Sometimes I really struggle with that decision, as storage is a huge problem. We have already lost our front lounge/dining area due to stock, plus our outside entertaining area is now my warehouse,. The shelves of boxes are now in the meals area, and a friend commented that she felt like she was in a smoko room at a factory, while sitting at our dining table. In the scheme of things, I'm only a small operator, and unless Hubby wants to push the business further, it will stay that way. I don't want a full time job, and the Business is the vehicle to mop up losses through a Trust. Nothing more, really!

The Business does not make enough to pay for staff, yet it turns over close to 200k. It is just me alone here, processing orders as they come in. My accountant says that I am doing well, with a large turn over like that, so it really scares me how little some retail businesses must make and I am thankful that I am not reliant on the income from it..

 

Because you are making too much money, and as we know; that's not fair to those who don't.

 

Oh, OK then. Well, that makes it alright, doesn't it.

 

I'm not sure my subliminal sarcasm wit was conveyed correctly, Skater?

(I can't access the emoticon and other editing tools on this site for some reason)

But yeah; how dare you make money!!

 

Hehe, I knew what you meant.......but......obviously Emoi is making much more than I am, so I don't get his attitude.