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Comparing Two High Volume eBay Sellers
October 30th, 2007 by estreet

eforcity announced that they are the biggest seller on eBay.com. InflatableMadness publicly declared a revenue goal of $4M per year. How are they doing?

I researched their September 2007 eBay sales using eSeller Street.

  • eforcity
    Sales: $99,423
    Quantity sold: 38,654
    Sell Through Rate: 19.52%
    Ave Sold Price: $2.57
    Listings:176,687
    Items Offered: 7,707,691
  • InflatableMadness
    Sales: $74,929
    Quantity sold: 10,531
    Sell Through Rate: 6.21%
    Ave Sold Price: $7.10
    Listings: 169,502
    Items Offered: 169,502

They are both in very competitive markets. eforecity sells consumer electronics and accessories (cell phone cases, phone cards, cables, batteries). InflatableMadness sells music CDs, DVDs and videogames. Both create approximately the same number of listings each month (e 177K, i 170K).

74% of eforcity’s listings are auction format where 82% of InflatableMadness’s listings are store format. Just on insertion fees alone, both sellers are paying approximately $25K monthly in eBay fees. The final value fees are approximately: eforcity $5.2K, inflatablemadness $4K.

My estimate for their net monthly sales minus eBay fees:
eforcity: $69K
InflatableMadness: $46K

I further venture a guess on their employees – 1 person per 100 items shipped per day @ $6 per hour:
eforcity: 13 people, $18,700 wages
InflatableMadness: 4 people, $5,760 wages

That leaves eforcity with ~$50K per month in income to pay for inventory and fixed costs (warehouse, insurance, administrative costs) and InflatableMadness with ~$40K for the same. I don’t know what these guys pay for inventory. But applying the typical rules of low cost, high volume markets, the sales price is usually pretty close to the cost of inventory. If the cost of inventory was lower than the sales price, a seller would attempt to undercut everyone else until they hit their cost point.

Conclusion:

These guys are high volume! But certainly not the biggest sellers on eBay. One very quiet seller of cameras brings in $1.5 M per month. That’s more than 10 times more than these sellers.

My recommendation is (and always has been) to upsell. Pick inventory that is scarce and sell its features. Take good photos, write good descriptions, deliver good service. Leave the low priced, high volume items to the guys with the capability of reducing their costs with economies of scale.

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4 Responses  
Anonymous writes:
April 21st, 2008 at 9:06 pm

What you don’t know is that eforcity actually has 4 different screen names on eBay. They have itrimming, eforcity, everydaysource, and accstation. The reason they have such high sales is because they list items at .01 and .02 BIN with high shipping charges which cheats ebay out of Final Value Fees probably costing them thousands of dollars a month. They also flood the market with identical items from these 4 user ID’s breaking eBay’s “15 identical item rule” which states that a seller cannot have more than 15 of the same items out there as fixed price/auction at the same time. If you want do see for yourself, search for V3 Car Charger and see how many items you see that come out between these 4 User IDs. I’m going to say you’ll see between 150-200 listings. How about a follow up story with that?

estreet writes:
April 22nd, 2008 at 7:23 am

Interesting eBay rule. I’ll follow up on it.

Michelle

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