eBay Cash! - Increase Profits by Decreasing Expenses

Profit is the money you keep; it is the money you made minus what it cost to make it. Most people think that the only way to increase profit is by increasing the price of the product they sell. Increasing the price of the product you sell would definitely increase the profit you make for every product you sell.

But while increasing the profit per sale, raising prices would likely decrease your overall profits because less people would buy your overpriced products. The best way to increase your profits is in a way that doesn't affect your customers. You can accomplish this by minimizing your business expenses.

Let's say you are already an established eBay seller that sells an average of $10,000 worth of products per month. And out of that $10,000 the money you get to take home (profit) is roughly $3,000. The $10,000 in monthly sales is made up of 100 $100 products, each product making you a clean profit of $30...

100 sales x $100 each = $10,000 (monthly sales)

100 sales x $30 profit/sale = $3,000 (monthly profit)

You are making a total of $3,000 in profit / month. With this money ($3,000) you are free to do whatever you like. But $3,000 is not enough; you barely have enough to cover your living expenses and plus you want to buy some new stuff.

What you could do is sell more products. Instead of 100 products, you decide to sell 150 products for a total of $15,000 in sales per month...

150 sales x $100 each = $15,000 (monthly sales)

Your profit grows by $1,500 to a total of $4,500 per month.

150 sales x $30 profit/sale = $4,500 (monthly profit)

You now have enough money to cover your living expenses and buy the stuff you wanted to buy. What you don't have anymore is the free time to enjoy the extra money you are making. Because the extra 50 products you have to sell every month has added a couple of hours to your workday.

But what if instead of simply making more money you decided to keep more money by increasing the profit you make for every product you sell...

Let's say you are able to bring down the wholesale price of the products you sell by $5 per item. You do this by haggling with your supplier and assuring him that you are here to stay and that you are about to expand your business which means more money for him/her.

You also realize that you are paying way too much in listing fees to eBay by using too many of their extra features (highlighted listings, extra photo charges ext). You decide to stop using some of these extra features and save $0.75 per auction you list.

You also save $2.25 on shipping supplies by buying your supplies in bulk, haggling with the supplier and adding $0.25 to the price the customer pays for shipping. In total you are able to decrease your costs by $8 / sale and by doing so, increase your profit per sale by $8.

Now instead of making a profit of $30 / sale you make a profit of $38 / sale. Lets see how all of this ads up when it comes to your monthly profits...

100 sales x $38 profit/sale = $3,800

That's great, you now make $800 more than you used to and your total monthly sales still ad up to $10,000. You were able to do this by keeping more of the money you make instead of making more money. Iknow it’s still less than what you would be making if you decided to sell an extra 50 products per month. But at least you still have free time.

And more importantly your business is much more efficient, you make more money without having to work any harder than before. What would happen if you decided to do both, keep more money and make more money? What if you decided to grow the profit you make / sale and sell and extra 50 products per month? This is how much money you would be making...

150 sales x $38 profit/sale = $5,700

Hmm, isn't that nice? If you were to simply try to make more money you would have a monthly profit of $4,500. But if you make more money as well as keep more money you would be able to make $5,700 in profit per month. That is a $1,200 in extra profits every month, without increasing the number of products you sell or the price you sell them at. This is what working on your business is all about.

It's all about increasing PROFITS by decreasing EXPENSES I am sure you already know this, but there are other ways to keep your money besides increasing the profit you make for every product you sell. There are hundreds of other ways to keep more of the money you make.

If your supplier ships your merchandise to you, you can save on shipping. You can save on image hosting for your listings by hosting the photos on your own website. And any other expenses you may have, such as phone bills, internet bills etc. Every single business expense you have can probably be decreased or in some cases eliminated.

What you should avoid doing at all cost when trying to increase your monthly profits is raise the shipping prices so you can make a couple of bucks profit on that. That is what some sellers do, but it's a dirty trick to make some extra money. The reason you should avoid raising shipping prices is because high shipping prices are the biggest reason most people refuse to buy stuff from the internet.

In case you were wondering, keeping money is the same as saving money. By saying "keeping more of the money you make" instead of "saving money" it makes it easier for me to explain what I am trying to tell you and makes it easier for you to understand. But whatever you want to call it keeping or saving, do it and you will have more money to do what you love without working any harder than you already do.