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Cost-Cutting Strategies for 2012

Make a New Year's resolution to run your eBay business lean and mean.
eBay cost-cutting tips

2012 has arrived! This year, you should strive to run your business lean and mean. Saving money is not difficult if you focus on a few key areas.

Wrap it up

First of all, identify the businesses in your town that can provide you with a steady stream of free packaging material. Recently, I was introduced to the owner of a local furniture store who was looking for a way to recycle his extra packing peanuts and boxes. He now calls us at least once a week to let us know he has packaging material ready for us to pick up.

Last year we spent quite a bit of money purchasing bubble wrap and other supplies. This year, our costs will be much lower.

Do you need a gas-guzzling SUV, just because you sell on eBay? How about adding a cargo box to your compact car, instead?

Get more for your money

Another way to save money is to sign up for the PayPal debit card. This will allow you to spend the money in your PayPal account with ease. Plus, if you swipe the card as credit, you get 1 percent cash back. I get around $35 back each month by taking advantage of this program.

In addition, think about the car you’re driving. Do you need a gas-guzzling SUV, just because you sell on eBay? How about adding a cargo box to your compact car, instead?

I drive a Ford Focus, and I’m glad I do! I put a lot of miles on my car driving around town for business. I try not to sell large items since they take up a great deal of space and are hard to ship, so owning a compact car is not a problem for me. I also own an older SUV that’s in great shape—just in case I need more cargo space—but it tends to stay parked in the driveway.

Thrifty habits

If you source products at thrift shops, another way to save money is to let your fingers do the walking! Set up your phone so that all of the thrift shops in your area are in your contacts. Call every store, every day, and focus on visiting the stores having sales. All of my thrift store contacts start with the word “thrift” so that they’re organized under the letter T, for ease of use.

You might also want to make thrift shopping a family affair. If the stores in your area have a senior discount day and you’re not a senior, bring mom or dad along for the ride! I did this recently and saved 15 percent on my entire purchase. That’s a lot when you’re buying $200 worth of shoes!

I can no longer afford not to be a Top-rated seller, and neither can you.

Earn the badge

If you’re a PowerSeller, strive to maintain Top-rated seller status. Like it or not, there are huge advantages to being a TRS:

  • Top-rated sellers are able to take advantage of the substantial shipping discount eBay is currently offering people in this program. Sellers who maintain TRS status and use eBay shipping labels receive a discount of up to 32 percent. That’s huge!
  • Top-rated sellers also get a boost in Best Match. I’ve had a hard time maintaining my TRS status, but when I do qualify for the program I always see an increase in sales.
  • Finally, people look for the TRS badge. Last year my mom wanted to purchase a leather jacket for my dad. As she scanned the listings, she clicked on those with the “good seller” badge. Yup, it matters.

I can no longer afford not to be a Top-rated seller, and neither can you.

Jump on the ‘free’ train

In order to reach Top-rated seller status, I recommend you offer free shipping. Here’s why: I’ve had a difficult time maintaining my TRS status due to low DSRs in shipping. I’m on the West Coast and I sell shoes. People don’t understand how much it costs to send a package.

In 2012, all of my new listings will come with free shipping. But that doesn’t mean I’m absorbing the shipping cost. “Free shipping” means that I’ve rolled the cost of shipping into the price of the product.

The positive feedback comments have already started rolling in and my sales are still strong.

I’m very excited about the new year and I think you should be, too! Taking these cost-cutting measures will keep your business lean and mean in 2012.

About the author

Miriam Otto
Miriam Otto is an eBay educator, based in Northern California. She sells more than 500 items per month on eBay, and finds most of what she sells at yard sales and thrift shops. When Otto isn't teaching eBay classes or running her business, she enjoys writing about her latest "scores" on The eBay Life blog. In addition to living "The eBay Life," Otto works as an independent study teacher helping adults earn high school diplomas. Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • We went to free shipping on all our eBay items last fall and lost a boatload of money. The problem is, many eBay shoppers do not check the shipping cost until they get ready to checkout. That may be only on the low price shoppers, I don’t know. I do know that after adding in the shipping and listing as free shipping items, my number of sales went down, forcing me to lower the price in order to sell items. I did a check on Terapeak for other sellers selling the same type items as mine, of the top sellers I was the only one who had top rated seller status. Their average price of an item was $20, plus a $10 shipping charge for a total ticket of $30. My average selling price was $25 with free shipping, so my take was $5 an item less and my volume was also less than theirs. Many items I was actually taking a loss on, but better that and generate cash flow than listing at a price where I can turn a profit and not selling anything. I’m now going to try a shipping cost less than actual and build the remainder into the item price so I can compete with the sellers who charge full shipping without taking a bath on the sale. Hopefully, I can still maintain top rated seller that way because it is a big advantage in fees, search results, customer faith, and other bonuses.

  • I really enjoy the article post. Awesome.

  • I have tried my hardest to maintain Top-Rated Seller status without offering free shipping (I sell mainly shoes with a few other products mixed in) and it just hasn’t worked. I become a TRS and then I lose it again a month or so later. The only category I get low scores in is shipping. People just don’t understand how much it costs to ship something.

    I’ve already received several comments from customers who told me that the “free shipping” was an incentive for them to buy from me. I don’t understand it, but this is what I’m experiencing. I’m losing quite a bit of money each month because I don’t get the final value fee discount or the shipping discount. I hope to get my TRS back in a few months.

    We’ll see how it goes in 2012!

  • Anonymous

    We tried free shipping but of course its not really free cause all sellers have to add the shipping costs onto their listing price. Our sales actually dropped. We put a info paper in all orders explaining we don’t profit on shipping and to consider ebay takes 11% off the top, padded envelopes cost .50 to $1.29 each, printing, paper, ink, bubble wrap, boxes, tape, labor, etc. Our DSRs have gotten better. We also noticed customers who want deals or free shipping, or try to scam us for every little penny give us bad dsrs whether we deserve it or not. Its easy to notice which feedbacks correspond to recent low dsrs. 

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