Pricing Used Tools

[yatg]

I just did the math this morning after selling the other Firestone set last night.
Ebay is skimming just under 14% right off the top (including on the shipping and sales tax, so it's a big hit for you and me because of the sales tax rates here - now about 10.9% here in T-town. (actually about 13.8%, but who's counting?)
Then PayPal nicks me for another (approx.) 3% (I need to crunch numbers on larger dollar numbers on that one.)
My ebay selling prices have both of those built in to the price - same as any sensible retailer would do. No reason to give away the store.
GarageJournal.com members in good standing are, of course, entitled to special promotional discounts on selected items. (Just ask.)

Here's some tips for anybody selling on ebay

You pay the 13.25% fee on the total transaction, item + shipping + tax.
Plus a $0.30 transaction fee or whatever they call it.

I figure 15% for ebay fees.

If you want $20 for the item, list it for $23.


Ship items "economy" with a flat rate cost.

I calc the cost to ship the item to the farthest US location, for me its Florida (zone 8), then add 15% to come up with my ebay shipping cost. If somebody ******* about the shipping cost, I can always adjust if they live closer.

If it calcs out at $8 to ship, I would use $9.25

Use flat rate boxes and envelopes.
If its small and weighs over a pound and will fit, it goes in a flat rate letter or legal envelope.

I pack and weigh the item then calculate the actual cost, then add 15%.

Use pirateship.com for shipping, best rates for USPS and UPS.

A lot of people F themselves using ebay shipping.
ebay gives you a "discounted" rate, but then ebay takes their cut on that.
And sometimes I think ebay shipping calculations are just wildly inflated.
If buyers think shipping is overpriced, they're not going to buy your stuff.

If you can break even on shipping after ebay fees, you're doing good.
There are still costs you have to absorb like tape, boxes, packing material, paper, ink, etc.

Where you personally live has nothing to do with ebay sales tax. ebay calculates the sales tax for the seller's locale. If you ship to Oregon its 0, if you ship to California it can be upto 10% or more.

Paypal is out of the picture when selling on ebay.
ebay does their own payment processing.

Here's a sales report for some stuff I've sold.
The 'pct' column (fee/total) is what ebay actually took.
The 'net' column is what ebay deposited in my bank account.

 

[four.cycle]

My old man used to have a statue in his office.
It was a statue of a beggar, holding his hand out.
He made a little card and hung it around the neck of the statue.
The card read "This guy sold auto parts for 50 years. He always sold cheaper than the guy down the street."

 

[four.cycle]

-

 

[Davefr]

Your transaction summary will tell you exactly what the fees are. Here's an example:

 

[four.cycle]

Well... I sent you the numbers... it's pretty clear that I am NOT being nicked only 13.25%, is it not?

Again, as I said in the P/M, it's pointless to raise the issue with them: they don't speak English, and they're stupid. The people who answer the phone just make **** up when answering questions. (I have had that happen multiple times with ebay "customer service" phone people.) They just make **** up. Hard to believe, to be honest. If I had a sales person do that, they'd be fired on the spot and told to not enter the building again - we'll mail the final paycheck.
I just don't communicate with them - all it does it cause me aggravation.

 

[four.cycle]

Attempted to address this to ebay on the phone. 866 540 3229 and all three times was connected to an individual whose pronunciation and elocution was so poor I was unable to understand what they were saying. Will try again Monday.

 

[bmwrd0]

Since I am now retired, I sell a lot of stuff on eBay, a mix of tools I don't use anymore, and stuff I go out and find. I have two rules. If I am selling something I used, I simply put it up for sale at the price that seems right, sell it, take my money and move on. If it is something I found in the wild, I use the Rule of Three: I have to plan to be able to sell it for approximately three times what I paid for it. This covers my cost, the rent on it, and profit. The one thing that needs to be explained is rent. This is my cost to rent a table at a flea market, pay eBay fees, whatever. In other words, this is the cost of doing business. Does it work every time? Of course not, but with the law of averages, it keeps me in the black. And that is the whole point.

 

[pelletman]

It pisses me off that they add shipping and tax to that 13%. I tend to sell and ship larger items, I think the last thing I shipped was $600 to ship plus the item cost. I used to sell a bunch of stuff on ebay, these days, not so much

 

[cgrutt]

I

It pisses me off that they add shipping and tax to that 13%. I tend to sell and ship larger items, I think the last thing I shipped was $600 to ship plus the item cost. I used to sell a bunch of stuff on ebay, these days, not so much

Yeah in fairness I'm sure they started doing that because users caught on to their pricing model and started charging $10 for item and $100 shipping to avoid fees. They do give a discount on shipping not sure how that works with freight but they usually charge consumer say $11.50 for shipping but only charge seller $10.00, so consumer winds up paying most, if not all, of the fee on the shipping portion. The sales tax is a complete pass through however, and seller pays that without ever seeing any $$$ that should be illegal as far as I'm concerned. I'm not pissed at ebay for the fees they're in business like anyone else and are looking to make a profit I just wish from a Consumer Protection standpoint they disclosed the true cost to seller. It seems a bit sleazy to me almost like the old shell game...

 

[four.cycle]

^ they take their cut right off the top of the total dollar amount, which includes shipping and sales tax.

As bmwrd0 points out just above, that is something that you have to work into your selling price.

If you were operating a retail business - aka "brick and mortar" - you are paying for:

- rent or property taxes (and/or mortgage payments)
- employee salary
- employee insurance
- liability insurance
- fire insurance
- flood insurance
- B & O taxes
- income tax (at the federal level only here in Washington State)
- heat
- lights
- water
- sewer
- garbage
- equipment maintenance (running a fleet of delivery trucks gets damn expensive)
- legal fees (inevitable if you're going to hang out a shingle)

I retired in '97 I'm sure I've probably left out a few. Those I listed I can assure you amount to a bit more than 13.5%

 

[cgrutt]

^ they take their cut right off the top of the total dollar amount, which includes shipping and sales tax.

As bmwrd0 points out just above, that is something that you have to work into your selling price.

If you were operating a retail business - aka "brick and mortar" - you are paying for:

- rent or property taxes (and/or mortgage payments)
- employee salary
- employee insurance
- liability insurance
- fire insurance
- flood insurance
- B & O taxes
- income tax (at the federal level only here in Washington State)
- heat
- lights
- water
- sewer
- garbage
- equipment maintenance (running a fleet of delivery trucks gets damn expensive)
- legal fees (inevitable if you're going to hang out a shingle)

I retired in '97 I'm sure I've probably left out a few. Those I listed I can assure you amount to a bit more than 13.5%

Well as long as we're calling it a business, businesses generally don't buy merchandise at $100, use it for many years and then sell it for $10 like most of the pre-owned merchandise sold on eBay, so Yeah, total cost of selling is much higher than their fees, usually at at resounding loss... at least for me anyways.

Tip for those buying "new" items on ebay... retail sellers know the pricing you can usually find the same item sold for considerably less than ebay if you track down seller's info and call them directly or purchase through their own website.

 

[neophyte]

I

Yeah in fairness I'm sure they started doing that because users caught on to their pricing model and started charging $10 for item and $100 shipping to avoid fees. They do give a discount on shipping not sure how that works with freight but they usually charge consumer say $11.50 for shipping but only charge seller $10.00, so consumer winds up paying most, if not all, of the fee on the shipping portion. The sales tax is a complete pass through however, and seller pays that without ever seeing any $$$ that should be illegal as far as I'm concerned. I'm not pissed at ebay for the fees they're in business like anyone else and are looking to make a profit I just wish from a Consumer Protection standpoint they disclosed the true cost to seller. It seems a bit sleazy to me almost like the old shell game...

Sales tax is now legally required to be paid for inline sales, and any major website like eBay (or Amazon etc.) is going to be under major scrutiny as far as collecting the required sales tax.
(Legally, a lot of states required residents to personally pay the required sales tax on items purchased or ordered from out of state and brought or shipped in, but most consumers just ignored paying).
As for sales tax on shipping fees, this can vary by state.
PA requires it.
It otherwise varies by state and by other factors such as whether the item/s purchased are “taxable”.
Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Washington D.C. are usually taxable, although in some cases it depends on whether the goods are subject to tax or not.
Other states not mentioned may not charge sales tax on shipping charges if the charges are listed separately.
Here’s a list. No clue how accurate or up to date it is.

Sales tax on shipping: A state-by-state guide - Avalara

Discover which states charge sales tax on shipping. Stay informed about tax regulations to optimize your business and remain compliant.

www.avalara.com

 

[cgrutt]

Sales tax is now legally required to be paid for inline sales, and any major website like eBay (or Amazon etc.) is going to be under major scrutiny as far as collecting the required sales tax.
(Legally, a lot of states required residents to personally pay the required sales tax on items purchased or ordered from out of state and brought or shipped in, but most consumers just ignored paying).
As for sales tax on shipping fees, this can vary by state.
PA requires it.
It otherwise varies by state and by other factors such as whether the item/s purchased are “taxable”.
Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Washington D.C. are usually taxable, although in some cases it depends on whether the goods are subject to tax or not.
Other states not mentioned may not charge sales tax on shipping charges if the charges are listed separately.
Here’s a list. No clue how accurate or up to date it is.

Sales tax on shipping: A state-by-state guide - Avalara

Discover which states charge sales tax on shipping. Stay informed about tax regulations to optimize your business and remain compliant.

www.avalara.com

I'm talking about ebay charging sellers a fee on the sales tax.

 

[four.cycle]

^ I understood the question.

YES, Ebay is taking a cut from the SELLER out of the sales tax they're collecting from the BUYER.

I would think it would be illegal, but I'm not a tax law expert.

And shipping costs have sales tax added in Washington State. No income tax, but they make up for it with all the other taxes. (Sales tax here right now is just under 11%, if I'm not mistaken.)

 

[Boogerman]

Just checked my costs, ebay fees run 17.3% of my gross sales. Long term, it has usually been 15%. Charging fees on sales tax plus increased shipping costs that are also subject to fees have made that go up.

Note that I made a small amount on shipping, I charged $6789.37 for shipping, and ebay charged me $6233.98. However, that small profit is only 8% of the shipping and ebay charged me 13% of the shipping, so I really lost 5% on the shipping. I need to add another $.50 or so to my shipping to even break even. But, buyers already complain that sellers "gouge" on shipping, and want it for free instead. It does no good to explain there's no "free" to the seller, they just tell us Amazon can do it, we should also. I prefer to charge shipping to make it more transparent to the buyer and to help eliminate the perception that there's no cost to shipping, when it is really about 20% of the cost of the item.

As far as how to price tools? Just look up what the maximum is they sell for by sold listings, and then price them at that, below that, or above that depending on your strategy and how badly you want to sell. What you WANT to net out of them has very little bearing on it, what they will SELL for has everything to do with it.

Here's my year to date:

 

[Shocker]

This has been a great thread. Lots of good info. I put some non-tools up on eBay. Getting some bids.

 

[Davefr]

Just checked my costs, ebay fees run 17.3% of my gross sales. Long term, it has usually been 15%. Charging fees on sales tax plus increased shipping costs that are also subject to fees have made that go up.

Note that I made a small amount on shipping, I charged $6789.37 for shipping, and ebay charged me $6233.98. However, that small profit is only 8% of the shipping and ebay charged me 13% of the shipping, so I really lost 5% on the shipping. I need to add another $.50 or so to my shipping to even break even. But, buyers already complain that sellers "gouge" on shipping, and want it for free instead. It does no good to explain there's no "free" to the seller, they just tell us Amazon can do it, we should also. I prefer to charge shipping to make it more transparent to the buyer and to help eliminate the perception that there's no cost to shipping, when it is really about 20% of the cost of the item.

As far as how to price tools? Just look up what the maximum is they sell for by sold listings, and then price them at that, below that, or above that depending on your strategy and how badly you want to sell. What you WANT to net out of them has very little bearing on it, what they will SELL for has everything to do with it.

Here's my year to date:

Your "gross sales" are $38.4k and your Ebay fees are $5.1k. That's 13.2%.


Did you mean to say "net item sales"?

 

[Boogerman]

Kind of a derailing of the thread off topic, but somewhat relevant.

A truism of business is that the profit is in the last sale, the last job, the last hours billed. Any money left "on the table", i.e., not billed, not collected, items wasted or thrown out or given away instead of being sold comes directly out of the profit.

Something I learned from the owner of a company I partnered with a lot was to make sure you weren't giving away or simply not collecting a profit on tools and equipment. He had a very large excavation company. At the time, he was running over a dozen crews, with appropriate equipment to supply them. For instance, he owned 13 large CAT and John Deere excavators. Since excavation is mostly a fair weather business in the northwest, there's about 4 months of somewhat down time. Many companies lay off their crew for that time. When labor got hard to keep, one of the things he did was go to year round employment. The guys would be in the shop when there wasn't excavation work.

He began to spend that down time with some of the crew buying equipment for replacement of worn out pieces. He'd buy low hour equipment at bargain costs, and spend the time to transport from wherever it was. Then, bring it into the shop and the crew would clean it up, repair it, modify it, etc as needed for the next year.

With the year round employment and need to keep the crews busy, he came up with the idea of bringing in the old equipment, and treating it similarly to the new equipment. They would bring it in, pressure wash all the grease and dirt and crud off, straighten out bent items, replace the cosmetic items that were broken or scarred, sand out scratches and repaint, and buy all new vinyl stickers and rebadge the equipment. He then would put it up for sale at the high end of the scale as "well cared for" used equipment. His crew got quite good at this after a couple years, and it was amazing the before/after of the used equipment. Often, the worn equipment, after refurbishing/polishing, would bring more than he was paying for the new low hour equipment. So, he was effectively using the equipment for 3 or 4 years for free, other than routine maintenance and the end salvage refurbishment cost, which was mostly incidental to his keeping crew through the winter. A side effect was that he always had new, perfectly running equipment, and didn't have as many breakdowns with associated productivity losses.

A lot of excavation and logging businesses use up their equipment, and then buy new when they have to. Often, they're so busy trying to make a living, they just park the old equipment out back in a boneyard, thinking they'll repair it some day. It rots away, and their heirs clean it up by selling for scrap or paying to get rid of it, after the company closes. That is lost profit, that could have been harvested by timely sale.

I used this principle in my own business, and my numbers above for my ebay sales reflect this. I would buy tools as needed, and try to get as good a deal on them as I could. I bought quality tools that worked the best and most efficient, to maximize the profit when using them. When they got worn and were replaced, or no longer needed, I cleaned them up, put them up for sale, and harvested the profit from them. By careful buying and selling, often the capital recapture for the year would come close to equaling the capital investment in new tools. This recapture represents a substantial "profit" for the year, that could have been lost by the stuff being piled in boxes in the back shop, or by going in the trash, or by being taken by employees when it was abandoned in the back room. Sometimes, that ebay number would approach $100K, and other sales might be double that from big stuff sold locally. That is a substantial profit, that otherwise would have been lost.

To a mechanic or home shop user, the parallel is to sell the specialty tooling that starts becoming obsolete, sell the old scanner when you buy a new, sell the Tekton set when you upgrade to Snap-on, sell the expensive Snap-on when you find you like Pittsburg Pro better. It keeps the clutter in your tool box and shop down, and is direct "profit" adding to the years bottom line.

 

[Boogerman]

Your "gross sales" are $38.4k and your Ebay fees are $5.1k. That's 13.2%.


Did you mean to say "net item sales"?

No, my gross sales were $29,384.32. The rest of that $38.4K is ebay add on fees that they use to inflate your numbers to make it look like more. That was the shipping costs, the sales tax.

It's semantics, and your interpretation is what ebay would like us to believe so their fees look lower.

I sold $29K worth of items. I charged shipping at as close to actual cost as I could above that, and actually lost a bit on it. Ebay collected sales tax on the $29K. They added that all together to come up with the number that they charged the 13.2% on. In reality, I paid 17.3% of the $29K in ebay fees.

My net was $29K minus $5K of ebay fees, for about $24K. The sales tax and the shipping was a wash, except for the ebay fees charged on them, which made them a loss to me.

You can define the semantics however you want, but this is the reality of what happened.

 

[four.cycle]

all my fault. tell me again what a bad guy I am. thanks

 

[four.cycle]

-

 

[Shocker]

Just an FYI, eBay is collecting the data for the IRS when you go over $600 as of Jan 2022.

Now whether or not that means the IRS will get all up in the business I don't know.

 

[alinc100]

Just an FYI, eBay is collecting the data for the IRS when you go over $600 as of Jan 2022.

Now whether or not that means the IRS will get all up in the business I don't know.

I think you might have meant 2026, based upon this article.I does appear to still be un-decided. https://rollcall.com/2023/11/21/irs-delays-new-online-sellers-tax-reporting-threshold/

 

[Shocker]

I got a notice from eBay about it seeing as I went over the $600 in total sales.

I do know that everything is still up in the air.

It was clear that it stated as of Jan 2022. I am assuming it is because I didn't have a TIN or SSID on file.

According to the eBay TOS, it does say that it will ask for it even if they are not reporting under 20k in 2023.

 

[rust in the eye]

Here's some tips for anybody selling on ebay

You pay the 13.25% fee on the total transaction, item + shipping + tax.
Plus a $0.30 transaction fee or whatever they call it.

I figure 15% for ebay fees.

If you want $20 for the item, list it for $23.


Ship items "economy" with a flat rate cost.

I calc the cost to ship the item to the farthest US location, for me its Florida (zone 8), then add 15% to come up with my ebay shipping cost. If somebody ******* about the shipping cost, I can always adjust if they live closer.

If it calcs out at $8 to ship, I would use $9.25

Use flat rate boxes and envelopes.
If its small and weighs over a pound and will fit, it goes in a flat rate letter or legal envelope.

I pack and weigh the item then calculate the actual cost, then add 15%.

Use pirateship.com for shipping, best rates for USPS and UPS.

A lot of people F themselves using ebay shipping.
ebay gives you a "discounted" rate, but then ebay takes their cut on that.
And sometimes I think ebay shipping calculations are just wildly inflated.
If buyers think shipping is overpriced, they're not going to buy your stuff.

If you can break even on shipping after ebay fees, you're doing good.
There are still costs you have to absorb like tape, boxes, packing material, paper, ink, etc.

Where you personally live has nothing to do with ebay sales tax. ebay calculates the sales tax for the seller's locale. If you ship to Oregon its 0, if you ship to California it can be upto 10% or more.

Paypal is out of the picture when selling on ebay.
ebay does their own payment processing.

Here's a sales report for some stuff I've sold.
The 'pct' column (fee/total) is what ebay actually took.
The 'net' column is what ebay deposited in my bank account.

"A lot of people F themselves using ebay shipping.
ebay gives you a "discounted" rate, but then ebay takes their cut on that.
And sometimes I think ebay shipping calculations are just wildly inflated.
If buyers think shipping is overpriced, they're not going to buy your stuff."

That would be me. I have 5 star ratings on everything, sometimes the shipping cost rating dips, IT AIN'T ME!
Its maddening. I've had items well priced linger for months then some finally sell. When I see the shipping charges the buyer has paid I know why the item lingered, they are absurd amounts and when it happens I've refunded the difference to my surprised buyers.
I don't know how to combat it, I enter correct weight and dimensions and it is impossible for me to see what an out of town buyer sees quoted for shipping. I'd set a flat fee but just know I'll eventually take it in the pants when somebody from Timbuktu buys.
I've about had it with E-bay. Alternatives such as FB marketplace require "social media" which is a hard no for me.