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Would you guys sell items with low margins?
 

I have a product that is selling at 99.00 but wholesale is 81. So profit margin is around 18.00 then you gotta consider the transaction fees etc.. So I'm looking at around 15 to 16?

Of course it's profit, but when it comes to uncle sam tax day and doing schedule c, the high comparison is bit of red flag.

Anyways, would you guys drop this product or keep selling it.

Re: Would you guys sell items with low margins?
 

It seems you are losing money. The transaction fees are around 13% with ebay and paypal fees.

$99x.13%=$12.87 split between ebay and paypal, $99-$12.87=$86.13
$86.13-$81=5.13
$5.13 profit without shipping fees and returns.

Plus you have the cost of shipping and any returns that you might have in the future.
DROP!!!!!

Re: Would you guys sell items with low margins?
 

Like a ton of hot bricks now.

:bird:

Re: Would you guys sell items with low margins?
 

If you are doing free shipping and the product is ANYTHING above a 0.1% Defect/Return rate then you MUST Drop it. otherwise you can sell it in a "Portfolio" of products.

You may also consider some minor Math lessons to keep you always asking this question every time you add a product.

Re: Would you guys sell items with low margins?
 

I've sold items with low margins, but the value of said items were low, and they sold like hot cakes.

On the other hand, with your scenario, i'd drop. It's not worthwhile selling high value items, for low margins - all it takes is one issue with the buyer and your next 10, 20, 30 sales will be recouping the losses.

Just not practical.

Re: Would you guys sell items with low margins?
 

Oh I think I messed up. I think the OP is not selling on ebay, he/she might only be taking payments with paypal. So only PP fees may apply.

Is the OP selling on his own website or in person? OP give us more info.

Re: Would you guys sell items with low margins?
 

Yeah just using authorize ebay and on own domain. Return rate is very low (not just may for this particular item). Ships very quickly as well. So only fee will be the credit card. But still low. I usually aim min 20 for each transaction, (give or take few dollars and after cc processing fee)

Re: Would you guys sell items with low margins?
 

You still have to pay for shipping from your profits, you didnt mention that or if your customers pay for the shipping.

If the customer pays for shipping, it border line keep for me. With returns, I think you are looking at a 12-14% profit margin.
How many of these items do you sell per day?

Re: Would you guys sell items with low margins?
 

You're paying about the same fee. Have you looked at the invoices you get from your processor each month? The fee for each transaction is barely less than what PP would charge. Plus the eBay fee is still there - and that's the bulk of fees you pay.

I would drop it like everyone else. You're selling at a loss after postage + fees. Since you're MOST LIKELY losing money on every sale, it would be impossible for you to ever make up the loss if you got a single return you can't resell.

Re: Would you guys sell items with low margins?
 

I'd only sell it on the website. And only if its very cheap to ship, or the customer is paying most of the shipping cost.

Re: Would you guys sell items with low margins?
 

i would do in my retail shop, but on ebay no no no! cases, returns, lost packages, scammers, negative feedback receiving risk must worth the profit absolutely.

Re: Would you guys sell items with low margins?
 

i only sell items with low margins if the cost is under $5 and i need the feedback

Re: Would you guys sell items with low margins?
 

thissssssssssssss^ OP if i were u i would maybe continue IF i could get my wholesale costs down ALOT more... if the items not a headache and low return rate...:attention:

Re: Would you guys sell items with low margins?
 

Sounds about right.

Re: Would you guys sell items with low margins?
 

I would sell anything that makes money, no matter how low the margin