Why We Never Made Money Online

May 19

Why We Never Made Money Online

This post was originally published on January 23, 2014

I’ve shared a bit about how we’ve tried to earn money online in the past. I started selling on Ebay off and on years ago, then started selling on Amazon when the third party seller opportunity opened up. But after consistently losing money on items we sold, I would look at Scott and say, “What happened?” We were always in the red and the expected money never really came in. These are a few examples of why I believe selling online didn’t work for us before.

1. Price – We priced our items too low. I would research to see how much something was selling for and would price it at a low amount. After all, doesn’t someone go on Ebay or Amazon to find a deal? If I want to compete, don’t I need to price low? This was a major mistake because it kept us from really earning any money, especially when compared to mistake number two.

2. Not charging enough for shipping. By the time we sold something on Ebay or used Amazon’s merchant fulfillment program, we were usually in the red. I know a lot of people on Ebay have artificially increased the cost of shipping, starting something out at .99 + $15 shipping. I didn’t do that. If anything, I priced the shipping way too low. I didn’t take everything into account. The cost of shipping something – the box or envelope to put it into, the bubble wrap, the address label, then the postage itself – ate up everything. We’d sell something for $10 and the shipping ended up being $15! This ties into mistake number three…

3. Poor communication between me and my husband. Usually, I would handle the sale and the PayPal account and my husband would box the item and take it to the post office. I never told him anything about adding tracking or insurance or any other extras, or even how to ship something. I just assumed (and you know what they say about assuming) that he would know to ship a book media mail or a small toy first class. Well, he didn’t. So by the time we bought the envelopes / boxes to mail something in and he got it to the post office the book that I’d charged $10 + $4 shipping for ended up costing $17 in charges. Why? Because it ended up being shipped priority mail instead of media mail, plus the envelope to mail it in, plus insurance in case it got lost, plus tracking to make sure we could find the package if it got lost.

So what’s different this time? Why are we dipping our toes once again into the selling online / make money online niches out there?

1. Pricing – I’m not “racing to the bottom” anymore. I research a product and I price what I believe is a fair price. For items that I retail arbitrage, that’s usually three to five times my purchase price. For items we already own, I price competitively with similar items or I just price it for what we need. Pricing is a mindset, and I’ve had to train my brain in a different way. Just because I would only pay $X for something doesn’t mean the next person in line will only pay $X. I need to remember that sometimes people will pay $Y.

2. Shipping costs. I am taking into consideration every aspect of shipping something when I sell on Ebay or if I merchant fulfill at Amazon. I add in the cost of the box or envelope to ship it in, packing material, the packing slip and the cost of the postage. I automatically add in the cost for tracking the package. Then I list it for a price plus shipping that I’d be willing to accept after looking at all the costs and fees. I’ll also price something with free shipping after making sure the cost of the shipping is added into the price. I’m not going to list something for $10 with free shipping and have half the money go to the shipping. No, I’ll list it for $15 or $20 with free shipping and have the cost of shipping built in.

3. Communication is better. I can’t assume that my spouse – or anyone else – knows what I know. I know books can be sent media mail, but he doesn’t know. So I make sure that if he’s taking the book or item to the post office to mail it, Scott knows an estimate of the postage and what to add to it, if anything. This way, no surprises. He’s going to let the postman know that a book needs to go media mail, not priority, and he’ll be able to stick to that.

Update May 2015 – We’ve started printing our shipping from eBay now. We get a small discount, the right postage is charged, and all we have to do is drop it off. We’re also weighing items in the box it will potentially be shipped in and making sure the weight of the packed box is accurate at the time that we list. This has helped out a lot! We also starting shipping most everything priority mail. Priority mail gets there quickly and has free tracking so we don’t have to add tracking to a media mail or first class package. 

Selling things online doesn’t have to be difficult or hard. We just needed a system that allows us to communicate, price our items fairly and be able to ship them for a fair fee. I think we’ve gotten to that point and I’m ready to move forward.

I believe these are positive changes and a new mindset that we’ve learned about. I’m reading books on pricing and psychology of selling. They’re fascinating to me and I can’t wait to learn more. I know we’ll make mistakes along the way, but this time around I’m a lot more optimistic about the chances of earning an income this way.

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