How do sellers make profits out of £0.60+free delivery items?

[e_mercat0]

If eBay takes 12.8%+ £0.30, then we need to take into account delivery as well, how is profit made?

[papso22]

They most probably make a loss and use those items to lure people in.

[double_o_heaven]

If it is coming from China, they probably aren't paying anything for shipping.

[e_mercat0]

it's 3 days delivery.

[selective_distribution]

They don`t make profits....they lose money! Ebay is awash with sellers who are unable to work out the costs, try to undercut the big boys (WOB/Music Magpie) who are selling excess stock at a loss, and don`t realize that it is actually costing them money to sell an item. In doing so they push the market down for everyone else. The whole excersise it totally pointless, might as well take it to the charity shop! Can anyone explain the logic to me of selling a vinyl single I saw recently for BIN at 20p +7p Postage! I have not worked out the numbers but it will cost this idiot at least £1.50 in costs. Look out for all the 99p items with free postage!

[e_mercat0]

But they're items that are sold by accounts with hundreds of thousands of reviews and sells, they can't be that stupid, does eBay charge less for business accounts compared to personal accounts, or is there some kind of  monthly plan that decreases the expences?

[geosacha007]

The big sellers have special deals with RM and couriers.  It may cost them next to nothing to post the items. 

[lovelacelinenlife]

I'm pretty sure I've not made a loss on a sale on a 99p sale, don't forget all the ex's are recoverable, plus if I did post a few bargain sales it would be with the purpose of building feedback, these days it's rare to get 100% feedback, but the sales with cheap goods do seem to gernerate a large return. . . .? 

[cantisque]

I'd imagine they pay a flat recurring fee to their courier rather than paying for each individual item to post, so essentially it costs them nothing to post things. Packing materials bought in bulk work out to pennies per item as well. It's all done at such scale, you see.

Also likely the items that ridiculously cheap are things that that don't sell fast enough and they need to free up warehouse space.

[btr.style]

"try to undercut the big boys"

Isn't that what you are doing? Surely the only motive for over 1000 listings, selling for profit on a private account instead of being correctly registered with a business account is to pay less in fees (namely listing fees, and using the fee promo), to either sell items for less and get more sales, or get more money from the sales you make than if you were legally trading on a business account? 

[simplyessential_uk]

Have you looked at these sellers DSR? Also if they have a high % late delivery these "loss leads" may be to bring down their % so they dont lose TRS discounts, maybe a temporary thing just to get their accounts back into healthy position

[e_mercat0]

What do you mean by " ex's "?

[e_mercat0]

What? I thought fees for business accounts would be lower.

[cantisque]

Because as a business you'd be paying 20% VAT on what you sell?

[direct.gifts]

Because the price is so low it maybe that many customers are buying multiple items which is where the profit is.

There are also certain type of products such as sim cards which are sold cheap because the seller then gets money from the network when they are activated. The money is not in the Sim Card itself .

There could be various other reasons why a seller does this. 

Just because it looks unprofitable doesn't mean it is. There is though the possibility that the seller may have no idea what they are doing!

[btr.style]

Nope. 

Every listing costs money on a business account (unless you pay for a basic shop for around £32 PCM with 250 "free" listings included). +20% VAT added to fees (it's included in the price for private sellers).

The only reason for anyone to be on a business account is comply with the law. It's why you have the business divide on eBay of those who accept this in order to trade legally and have a business account to sell items they've purchased to profit from, and the other ones who couldn't care less about trading legally in favour of making extra money/having an advantage over correctly registered businesses and are on a private account.

[e_mercat0]

So is it always 12.8%+£0.30 regardless  of what you do or are there methods to have a lower fee to pay to eBay?

[btr.style]

Just like with private accounts the fee is dependent on catagory. So, as I can look at figures let's take clothing...

11.9% fee + 30p. So on a recent sale fee's were £3.87 + 30p = £4.17. Then 20% VAT added on (83p) = £5 total fees. 

From what I recall, private fees (with no eBay promo, just the base fee) would be the same but VAT would be included in the fee price (so no 83p extra to add on, it would just be £4.17 fees). 

No ways to pay lower fees on business accounts. eBay don't give business sellers fee promos anymore (the last was around September 2022.... 25% off fees).