DVD $3.99 with free shipping - loosing money

[musicyouneed]

I was doing some research and I came across this seller who sells DVD's for 3.99 and $3.39 free shipping in Canada.  So if you do the math he/she is losing money on each sale.  $3.99 - .40 ebay fee, -.42 paypal fee, -$3.35 exact shipping and say  -.50 for envelope.  It is costing them $4.67 to sell a $3.99 item.   What a terrible business model.  They should just put them for free on facebook or donate them.

[esclyons]

no Not exactly, could be paypal micro payments set up, and could just be wrapping the case, in brown paper and sending for 1.94$, and using discount postage, but they would still have had to get the dvd's for almost free, But i agree a lot of work for very little pay off..

[ypdc_dennis]

Not that simple to figure out unless you know how the seller is packing and mailing. If one pays attention to the pennies there is "profit" to be made.

3.99 with free shipping.

paypal fee: 0.42 (0.25 if signed up with micro payments)

eBay FVF: 0.40 + sales tax = 0.42 to 0.46 or if TRS = 0.38 to 0.41

postage 1: 1.94 + sales tax (100g) = 2.04 to 2.23 -- with discounted postage: 1.35

postage 2: 3.19 + sales tax (200g) = 3.35 to 3.67 -- with discounted postage: 2.23

Envelope (no protection): 0.15

Size 1 bubble envelope (bulk buy): 0.25 to 0.40

100g, no protection, discounted stamps, AB seller: $2.30 leaves $1.69 in the seller's pocket.

100g, bubble envelope, full price stamps, AB seller: $3.24 leaving a 75 cent "profit".

200g, bubble envelope, discounted stamps, NS seller: $3.46 leaves a 53 cent "profit"

200g, bubble envelope, full price stamps, NS seller: $4.90 gives a $0.91 loss.

Calculation note: Discounted postage assumes stamps purchased with 30% discount and no sales tax.  With careful shopping one can do better than that.

...

The other question is why the seller is doing this?

* If they expect the majority of sales to be outside Canada, then having free shipping for Canada means there is no FVF on shipping charged for out of country.

* They could be looking for a bunch of cheap sales to keep the TRS numbers above the limit

* They could have a bunch of dvds with sunk cost value of zero cents

* It's a hobby to keep them entertained

-..-

[reallynicestamps]

If he has a Store, he can "buy" either bubble or plain poly envelopes very cheaply with his supplies coupons.

He may be buying mint postage at a discount*cough*, lowering his cost for shipping by 20% or more.

I'm assuming he is shipping without tracking using Cookie Jar Insurance to cover the very occasional loss.

[needsmorerobots]

Some people do have poor business models, many when they start out of Ebay. Have you done a thorough check of the seller's stock? If not, have you considered they are making up for the loss by tacking it on to the prices of other more valued & sought after products?

[travis7s]

DVDs are one of the easiest and quickest items to list and ship. I don't dabble with cheap DVDs but I've run time trials and I can list and ship a DVD set in less than 5 minutes. (and thats taking multiple photos and customizing the listings somewhat) Someone who is just using stock photos and prefilled info could easily process 15-20 orders an hour. at $1-1.50 profit on each sale you can make a decent wage.

[cumos55]

I am seeing some listings of books priced at $3 to $5 with free shipping..... on eBay.com...

There are also sellers  that list books starting at a low price for an auction listing...  Start low at $15.... or lower at $4.

------------------

It was about 10 years ago that eBay would recommend that auctions start at 99 cents.....  most definitely a loser  then  and even more so today.

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It is usually new sellers on eBay that are doing this

[cumos55]

There are also listings where the start price for an auction listing is $0.01 or $0.99  with a very high shipping cost.. sometimes close to $30.

The shipping cost will drop as the auction proceeds.

Another reality on eBay.

[cumos55]

When I sold on eBay, I had my rules to follow and did very well.

eBay's words of wisdom were considered but never followed.

................  and it all started with the years when everything sold at auction.....

[reallynicestamps]

@cumos55 

Our US colleagues also have the choice of cheap, tracked Media Mail.

[richardcm]

Seller could also be using recycled packaging. I sold over a thousand items on my other eBay ID over 10 years and only bought packing tape regularly. I recycled boxes, bubble envelopes, packing materials. I had access to free used shipping supplies so my shipping supplies costs were negligible.

I also bought discount postage stamps and my cost no Sales tax was averaging 60% of face value of stamps.

But there is an indirect cost to the above. Time spent getting the used supplies and making them ready for use. Also time spent finding and buying discount postage. So while my real dollar costs were lower my time put in was higher. I had more time available I could use the selling model above.

[lady.stark]

It could also be a Chinese seller listing on eBay Canada and lying about the item location. It happens a LOT.

[reallynicestamps]

There was a young man selling from North Ontario a few years back who bought pallets of DVDs and CDs.  His cost for the saleable ones would have been pennies, even if the unusable ones went to the dump.

Chinese counterfeits and bootlegs from anywhere are also cheap to produce. 

And even with the rise in postal rates from China, shipping from there is still quite cheap by Western standards.

Hey- fun news.

EBay China has told sellers not to ship to Canada. Fallout from the Meng case or overkill on caution?

And apparently, if ANY foreign seller wants to list on eBay.com they have to have a US bank account and by extension, be registered to pay US taxes, or Managed Payments will automatically be charging currency exchange to send payment to their /our national bank accounts.

[richardcm]

I remember the DVD seller. He was selling under the name BAD Entertainment which were the initials of himself, spouse and child. He asked for advice on changing his name / eBay ID to Brande Entertainment which was the first two letters of their names and most said to do it. I said it should not matter! Lol. His sales took off with the change.

He used to get pallet loads delivered by freight to his home in Northern Ontario. He claimed to make enough money to pay off his mortgage rapidly. He had a shift job and had loads of energy to sell a lot of DVDs on eBay. Lasted 4-5 years.