718 729 6400
nyc@virama.com
21-09 Borden Avenue
Long Island City, NY 11101
United States
0228 5488 9971
ber@virama.com
Kaiserin-Augusta-Allee 101
10553 Berlin
Deutschland
020 3239 6539
lon@virama.com
43 Moorefield Road
London N17 6PU
United Kingdom
  • We buy Books, CDs, DVDs, Legos & Toys
  • We do not cherry pick
  • We do not need a title list
  • Instant payment by check or paypal
  • FREE shipping of all CDs, DVDs and Legos from you to us with insurance and tracking number
How it works:
  1. Box up your CDs, DVDs and Legos
  2. Complete order form to get FREE labels
  3. Or stop by at our warehouse
    (address, directions and opening hours)
  4. We will quote you one price for everything
  5. Upon acceptance we will pay you by check or paypal
Why you shouldn't sell on eBay? Most online merchants don’t do the numbers. Let’s take a look at the commission schedules for eBay. These commission schedules are difficult to understand because they are designed to be difficult to understand. At first, we look at the eBay commissions for eBay auctions.
eBay Auction commisions as percentage of item price

On the X-axis you have the item price, i.e. the price of the item for the buyer. The bright blue bar gives you the eBay Auction commissions expressed as a percentage of the item price. For example, for an item sold for $1 the seller would pay eBay over 20% commission if the item sold at an auction. But eBay wants you to collect the payment by paypal and eBay wants the seller to offer free shipping. Unless a seller offers free shipping to the buyer the specific item for sale will be disadvantaged in the eBay search process. After adding paypal fees and free shipping the commissions for all items sold for $2 and below equal more than the item price, i.e. the seller is losing money for himself while making money for eBay and paypal. For all items sold at $7 and below the combined eBay- and paypal commissions plus shipping costs will still equal 50% or more of the revenues. Even for an item sold at $49.99 the combined commissions would amount to almost 20% of the item price.

The chart above also illustrates that eBay has structured the commission schedule in a way that items sold at popular price points such as $9.99 and $24.99 and $49.99 generate more commissions on a percentage basis than items at other price points.
Online merchants pay eBay commissions no brick-and-mortar retailer could live with No retail store could operate if the store would pay between 158% and 30% for the combination of rent and credit card processing costs. Larger online sellers rent storage or warehouse space (instead of operating out of a “free” garage, basement, or attic), their cost calculation puts them at an even greater disadvantage cost- and margin wise because they pay rent both to Amazon or eBay and their landlord.

As a rule of  thumb, retail stores can only make money and survive profitably if they pay less than 10% in rent. Credit card transaction fees average between 2% and 4%. Assuming that half of all customers buy books, movies, and music with a credit card in a typical retail establishment, one can assume that a profitable retail book or record store can pay up to 11% or 12% for rent and credit card transaction fees combined. In comparison, the average online seller will pay between 25% and 40% for an online store front with credit card processing capabilities to Amazon or eBay.

It is therefore no surprise that most online sellers are amateurs and dilettantes. They don’t do their numbers and they don’t account for costs and investments such as their PC, printer, car, garage/attic/basement. Almost none of the online sellers interviewed by us, were tracking the hours they work for their business or their hourly wages.
The revolving door of online micro merchants For years, Amazon and eBay have relied on charging an ever changing number of dilettante micro sellers fees only professional businesses can afford to pay. These amateur sellers recruit themselves from the pool of the unemployed or under-employed, or people who can not participate in the regular labor market because they would lose their social security- or disability payments. Most of these micro sellers enter the online market place through a revolving door that sucks them in through the lure of the first fast earned money and kicks them out a few months later because of performance failures, policy violations, or an inability to make their “business” work financially.

Given the commission tables above it becomes clear that the shipping reimbursement is the only chance to become profitable as an online seller. The feasibility of an online business depends on the effectiveness with which it has organized the shipping process, for example the cost of shipping supplies, the cost of labors, and the ability to negotiate discounts with carriers other than the USPS. Most micro sellers can’t enjoy these benefits since they don’t have economies of scale. The usual micro seller buys shipping supplies at Staples, Officemax, Office Depot or catalog companies like ULine. The normal micro seller doesn’t account for the hours spent stuffing envelopes and standing in line at the post office where regular rates apply. Online sellers with more than 100,000 orders per year can negotiate discounts with office supply stores and catalog companies or even directly with the manufacturer of the supplies. These larger sellers are also able to use carriers other than USPS and save between 10%-30% over regular USPS rates for nearly comparable services and delivery speed.

Bottom line: the commission structure of Amazon and eBay prevents the overwhelming majority of micro sellers to run a profitable business. The only chance for profitability for an online business is to make some money of the shipping reimbursements received from Amazon or the shipping costs charged to eBay customers. In order to profit from shipping, economies of scale are required which none of the micro sellers have.
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