What's your wage?

Many people start selling and see some quick money and start dreaming about how much they can make.  They go from selling items around their house to buying and selling items.  They see where they made maybe a couple hundred dollars and try to equate that to their real job income.  But many do not realize they may be working for less than minimum wage.  So, how can you tell?

To really understand what kind of income you are making, you really have to track your time.  How much time did you spend sourcing?  Did you have to clean anything?  How much time taking pictures, writing the description and doing research?  These are all factors that need to be considered in addition to all  of the fees you are being charged.  So, let's do an example.

Let's say you are spending your Saturday going to yard sales.  You spend 4 hours going around buying items.  You buy 12 items.  Now, let's say one item you bought for $1.00.  You clean it by simply wiping it down.  Maybe a minute there.  You find the time it takes to take and edit pictures, create the listing, put in the description and research pricing takes 1/2 hour.  The item sells for $20.00.  So let's break down everything from a time and cost perspective.

You bought 12 items in 4 hours, so your time spent per item is 20 minutes.  You spent 30 minutes getting the item listed, so that's a total of 50 minutes.  You bought the item for $1.00 so your gross profit was $19.00.  Now you have ebay fees (vary depending on category).  We'll use the high end since a lot of people sell in the clothing category.  Your fee is 10%, so deduct another $2.00.  Now your gross profit is $17.00.  Your paypal fees will be 2.75% plus 30 cents.  So that equates to 85 cents.  So now your net profit would be $16.15.  So now we would divide $16.15 by the 50 minutes, which gives you 32 cents per minute, or $19.38 per hour.  Not a bad hourly wage.

Now if you offered free shipping, your hourly rate is going to go substantially.  Too many times I see people sell something for $9.99 and think they did well.  Even if that item was something they already owned, and did not purchase, they would be making about $8 or $9 an hour.  Again not bad but very close to minimum wage.  So they key here is to minimize the time spent per item and to sell for a higher price.  The higher the price, the higher the hourly wage.  You should account for any time spent on ebay, whether it was spent listing, shipping or doing research.  These are all labor areas and should be accounted for.  You should also account for any shipping materials purchased.  You need to factor in as much as you can so you know for certain you are making a profit that is a sustainable one.

Knowing your numbers allows you to see areas where you may need improvement.  The longer you sell, the more efficient you will become, and thus the better hourly wage you will make.