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Thread: eBay & PayPal fees + My Profit %

  1. #1

    eBay & PayPal fees + My Profit %

    Hi Guys/Gals,

    I've done a little search but can't find an answer to my problem, so I'm hoping you good folk can enlighten me.

    I'm expanding an eBay shop from just a few items to over 1000,
    I would like to make 10% profit on each item I purchase from the wholesaler. If I buy something for £16.99 +VAT@20% = £20.39 my 10% profit will be £2.04.

    When I sell through eBay I will incur several fees,
    the first is the paypal transaction charge @ 3.4% plus a £0.20 service charge.
    The second are eBay fees which are 8% of the final value plus £0.35 insertion fee.

    If I sell something on ebay for £20, my total PayPal fee will come to £0.88, and my eBay fees will total £1.95, so both fees combined is £2.83. Leaving me with £17.17 in the bank.

    Here's my problem, if I purchase from my wholesaler @ £20.39 inc VAT and I want a 10% return in profit what price do I need to list it at?

    I hope all that makes sense to someone.

    Thanks All
    Martin

  2. #2
    Elite Member
    Join Date
    Jun 2007
    Posts
    17,065
    Quote Originally Posted by M.Hayes View Post
    Hi Guys/Gals,

    I've done a little search but can't find an answer to my problem, so I'm hoping you good folk can enlighten me.

    I'm expanding an eBay shop from just a few items to over 1000,
    I would like to make 10% profit on each item I purchase from the wholesaler. If I buy something for £16.99 +VAT@20% = £20.39 my 10% profit will be £2.04.

    When I sell through eBay I will incur several fees,
    the first is the paypal transaction charge @ 3.4% plus a £0.20 service charge.
    The second are eBay fees which are 8% of the final value plus £0.35 insertion fee.

    If I sell something on ebay for £20, my total PayPal fee will come to £0.88, and my eBay fees will total £1.95, so both fees combined is £2.83. Leaving me with £17.17 in the bank.

    Here's my problem, if I purchase from my wholesaler @ £20.39 inc VAT and I want a 10% return in profit what price do I need to list it at?

    I hope all that makes sense to someone.

    Thanks All
    Martin
    As I understand your problem:

    Your purchase price = P (including VAT)

    Your list price = L

    Your cost = C = P + 0.2 + 0.034 * L + 0.35 + 0.08 * L = P + 0.55 + 0.114 * L

    Your List Price = L = 1.1 * C = 1.1 *(P + 0.55 + 0.114 * L) = 1.1 * P + 0.605 + 1.254 *L

    so

    L = 1.1 * P + 0.605 + 0.1254 *L
    Now solve for L from the equation above.

    In the example given by you P = 20.39

    Then your list price should be L = 26.34 (for 10% net profit)
    “... mathematics is only the art of saying the same thing in different words” - B. Russell

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