When to upgrade subscription?

[KyleH]

Guessing many of you thought through this before … appealing to your experience.
At what point did you switch from “basic” to “premium”

I have basic now – $21.95 a month – 250 fixed listings – additional @ 25cents each
Premium – $59.95 a month – 1000 fixed listings

I have been between 300-350 listings. I have used some promo listings and also ran some things as auctions to keep fees down. $38 difference in the fees. At 25 c per additional listing that would put the breakpoint at 402 fixed listings right? 250 plus 152 @ 25 cents each. Thinking when I get to 400 I should make the jump.

Seems simple enough – am I missing anything? Other factors that I should consider?

Thanks! – Kyle

[Sharyn]

Not sure if the prices are the same when this subject came up before, but here is the topic:

When to take the next step up in size of eBay store

[KyleH]

Thanks Sharyn – searched didnt see that. : )

[bcfol440]

The very wise T-Statt did a breakdown, and I think it was at about 400 listings to upgrade. but, yes, check the link.!

[sonia]

Yup – I jumped at 410.
Another thing to keep in mind – your ebay shipping supplies coupon (every quarter) doubles from $25 to $50.

[MDC Galleries & Fine Art]

OK.. I know you are not expecting this, but I had to run some clean up utilities on both our computers, sort of my year end house cleaning and it was going to take hours, so I went way past the simple, we jumped to a premium store at about 400 ++ items. Can’t remember the sales volume.

But I have tried to show a different way of not only thinking about what level store, but what level do I need to be at, period, in this game of “Online Selling” on Ebay.

So, here goes..

I understand you are asking for opinions of the SL members on the threshold of when to jump from a $25 store level to a $75 store level, but also you may be interested in using this Ebay calculator to take a broader look. Overall, personally, the difference is small when compared to everything else, in perspective. Though, granted $600 is no small amount, when you run our example through the calculator link below, I think you will see my point.

One you can use to find profit, either by putting in one item OR drop in your whole quarter or annual numbers and do a what if using it. May help shed some light on what to expect to live from after fees.

🇺🇸 US eBay Fee Calculator

This calculator is fun if you have your total annual sales, know about what your avg. selling price is, what your avg. price you have paid over the year, then fill in the other couple of fields. You may be surprised at what you are left with. Comes much closer to the figures T-Satt and I throw out at Jay at times.

From the stated bottom line subtract what you pay out [expenses] to run your business such as First your annual store fee at $75 per month premium or use $60 per month for yearly pre-paid. [which saves money and we are going to start doing that this year]. You can change that expense, but that is all your store fee is an expense, we put it into the “Rent” category in our accounting program. But when you finish this example you will see the difference between Basic and Premium is very little in the overall scheme of things. Either $25×12 mo= $300 per year or $75×12 mo. = $900 per. = $600 difference.

Then subtract estimated car expenses, home office expenses such as increased utilities, and then office supplies and you will see that the remaining amount can start to fall into the under 25% of the gross sales figure. We mention this occasionally of SL but it usually starts a string of I can’t believe that replies.

So, here is an example:
* Let’s say you are planning on or hoping to sell $40,000 gross per year,
* now divide that number by what your average sales price is per item, [which u can get from your Ebay stats]. We will use $35 per item = 1,143 items sold in a year
* Now multiply those 1,143 by a guestimated avg. price you charged the cust. for shipping. We will use $9.50 per item or $10,858 charged [now put your number or ours into the second field]
* Next, put a guestimate of what those 1,143 items may have cost you. Our overall avg. purchase price [which we track in our accounting software as well as WonderLister {{soon to be converted to SixBit }}] is approx. $9.00 per item, so insert $10,287
* Next since we are a Top-Rated Seller plus, we get some large shipping discounts, as high as almost 40% at times, but I am going to use 20% overall average, so the $8,686 “charged” shipping only costs us [less 20%] at $8,686
* Ok, now this is where you can play “what if”. Input your store level, click on premium or basic, or toggle back and forth, do the Same for Top Rated Seller status, and then just leave International sales as a no for this experiment.
* The final light at the end of the tunnel. With my example numbers above, $40,000 in sales, [avg. sales price per item at $35 ea. gives you 1,143 items sold], avg. cost to purchase an item at $9 ea., next the avg. shipping cost charged to the cust. at $9.50 ea., avg., avg. cost to ship we paid [less 20%] is $7.60

Then toggle and “play what if” with which store level you want and or top-rated seller and you will see what I think is an interesting final number.

My example plugged in shows that out of $40,000 in annual sales, the profit is showing at $25,259 or approx. 63% left over for a seller meaning Ebay, PayPal, shipping, fees, everything is close to 37% of what you sell.

NOW, subtract all the soft costs many of us have mentioned over the years here on SL as well as any taxes you will have to pay on it, and you may find 50% or more of what you have sold {GROSS} has been eroded by all the factors [that some us do actually track] as a cost of doing business online. The bantered about 16% to 17% figures of what Ebay costs are fine except they do not encompass the whole story.

So, now you will see that $40k in sales may yield, after all is said and done maybe $20,000 to $25,000. But sticking with what is showing, the $25,259.00 dollars, clicking between the Basic, Premium, even Anchor stores doesn’t move the number, what does move the number is by being a top-Rated Seller, it moves the final amount by $366

NOW… go back and play the “what If” game. Input higher or lower annual sales, higher or lower avg. selling unit costs, any number you want, the bottom line numbers will still show what I think to be a much higher “COST OF DOING BUSINESS” than most people think or consider. And never over estimate the amount of “soft” [hidden costs]. They are there, believe me, electricity, water, heat, A/C, square, office supplies, magic markers, paper towels, silver polish, shoe polish, storage bags for shirts, dry cleaning costs, lint roller brushes, paper clips, rubber bands, staples for your stapler, ball point pens, windex, ink, toner, printer paper, tape, footage portion of your mortgage, paying yourself, and of course the Non-liquid-direct out of pocket cost of having 1k to 8k of hard goods sitting in bins on your selfves [using even a $5 per item avg COG] that is $5,000 to $40,000 tied up in inventory.

Think about where that money came from??? And to find even $5,000 of SPARE CASH using a real accounting program and the calculator numbers that means I have to sell $15k to $20 to generate that “reserve capital” to plow back into inventory in the first place. Jay says, to slowly grow your business, well that is a forced given nless you take out a $5k business loan to invest into inventory or use OPM [other peoples money]. If not think about this, Jay and Ryane have taken over 15 years to build up an 8,000 plus item inventory. That came out of “reserve profits”. Sales over and above what the cost was to replace what they sold, and live off of some of it also. Let’s say and average cost of $3 per item, then they are sitting on $24 in inventory that took a decade and a half to build. That is only $1,600 per year hard cash pulled out of reserves. Not much when looked at annually. That’s only approx.. $133 per month, but steadily invested [plowed back] into inventory that was over and above what was sold. No small feat indeed.

So, For those planning on quitting your job, look hard at being able to sell $40,000 of merchandise a year and then living from only $15k to $25k that will be left over and having $5k to $10k sitting in plastic bins. All of the YouTube vides do not paint the whole story by a long shot. But they will be willing to sell you a .Pdf file of how they do it. I even wonder if most of those YouTubers even know what their real bottom line, actually is??? HHhhmmm.

Again, just think it all over deeply. It is not as rosey of a picture as some make it seem, and that it doesn’t even have to be an extremely detailed look at it either.

No arguments wanting to start here, just saying, this is how some of us here that participate on SL look at the overall picture, barring all the little spread sheet nuances we all use and differ in how we use those numbers.

There is a cost to selling online, there is a cost to Ebay and the difference between a basic store, premium store or anchor store only means something in the smaller, month to month scheme of things not so much on the grand scheme level.

There used to be a calculator used to answer your question directly, without providing an opinion, just a dollars, cents and fee look at when the calculator says to “jump to the next level” store, but I haven’t seen that in a long while and think that this new calculator is its replacement.

And as Sonia mentions above, you will get another few dollars per month in supplies from Ebay, then divide that by 3 months to get a monthly value in dollars to aide your contemplation.

So, that’s my monthly wall of text and not a Dennis Miller rant. Just an opportunity to play “What If” with friends. [Joshua says to Dr. Falcon], “A strange game. The only winning move is not to play. How about a nice game of Chess” 

Have fun playing what if and contemplating if full time selling and at what level store is needed and if this way of life is the way to make a living.

Ok. I expect the coming bombardment but be forewarned I have very little time for rebuttal since we are now involved with building 4 spec houses and permits being pulled by Friday.

Have a great Holiday everybody and may the coming year be one of great sales, growth, progress and always remember to always be applying KAIZEN as you go forward.

Kindest Regards and Happy Holidays to All from
The management team, Michael, Susan, Lisa and Christie at
MDC Concepts, Inc.
MDC Galleries and Fine Art
SmartParts Small Equipment Parts divs.

[T-Satt]

Mike, as always, love the perspective!

I always say that if the listing fee is an issue, your margins are too thin…

[KyleH]

Thanks for your responses guys! MDC – Thanks for putting this in perspective. I won’t spend much time worrying about getting this choice just right. In the grand scheme of things, it’s not going to make a huge difference : ) Enjoyed reading your “wall of text”

Merry Christmas to all : )

[aperture]

I recently upgraded my subscription to premium. I have been bouncing around 400 listings for a few months and finally was forced to examine the math when I realized I was hesitating to list items that may not have a ready buyer because they were going to cost me $0.25 per month. Of course, the math showed that I should have converted as soon as I got to 400 listings and now I am kicking myself for not switching sooner.

I have been wrestling for a while with the $0.25/month listing fee. Like Elaine on Seinfeld, I have been wondering which of my listings is “sponge-worthy” when I should have made the switch to premium and gone on to log 500+ listings. Anyway, my $0.02.

[T-Satt]

“I have been wondering which of my listings is “sponge-worthy” “

That just made my morning…

[T-Satt]

PS – FWIW…

Disregarding the benefits of the free shipping supplies, the math breaks down like this:

Upgrade from Basic to Premium at 450 Listings, and from Premium to Anchor at 3,400 listings. This is for total listing fees (new and relisted items).

If you move a little earlier for the perks, so be it, especially if you are committed to staying in the game. I’m thinking we will move to Anchor sometime in Q1 of 2019…

[ebaymom]

Here’s the link to compare stores: https://www.ebay.com/sub/subscriptions
Don’t forget the $25 promoted listing credit for Anchor and above! 🙂 Every little bit helps!

[Author]

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