First Example
We give the following example of our costs in selling a single krugerrand on ebay.
For the purpose of this example, we have made a number of assumptions, including a gold bullion price of £220, purchase premium to us of just over 1%, standard listing with gallery image, no reserve, starting price of under £1. All costings are approximate:-

Reasonable Profit?
The example above assumes that we are happy to make a minimum of £5 for our troubles. In practice, we would probably cancel the auction if it failed to reach £235, but we would hope to make as much out of the deal as ebay does, which changes the costing to the following:-

Second Example

Third Example
As above but with "high" starting price:-

Fourth Example
As above but with "high" starting price, and realistic profit target:-

Cancellation Costs
If we cancel an auction before the end, we still have to pay the listing fees, but not the commission, so for an auction with a sub £1 starting price, this costs us 30 pence. While this won't break the bank, compared with the £5 we hope to make when a sale is successful, we can't afford to, and wouldn't want to, cancel too many sales.
If we start an auction at a "realistic" or "high"figure, around the £235 to £245 mark, and the item fails to sell, we have to pay the £2 listing fee, and we hope you will agree this is a substantial amount compared with the profit we stand to make if the auction is successful.
In all of the above examples, we have ignored our administrative costs in creating, monitoring, and cancelling or processing the sale. Our wage bill is £2,000 per week.

Credit Cards / PayPal
In the above calculations, we have also ignored credit card costs. You will see elsewhere, and we also explain why, that we prefer to avoid credit cards, although we do reluctantly accept them at a 3% surcharge. If we were to stand this cost ourselves, and some unreasonable buyers expect us to do so, the calculations would change again as shown.
PayPal charges are generally even higher than credit card charges, up to 5%.

Example 1A
We give the following example of our costs in selling a single krugerrand on ebay.
For the purpose of this example, we have made a number of assumptions, including a gold bullion price of £220, purchase premium to us of just over 1%, standard listing with gallery image, no reserve, starting price of under £1. All costings are approximate:-

Example 2A

Example 3A
As above but with realistic starting price, desired profit £5:-

Example 4A
As above but with realistic starting price, and realistic profit target:-

Lining the Banks Pockets?
As you will be able to see from the above, we would make a loss in two out of four examples, and the banks or credit card companies would always make more than our profit on the deal. Despite this, every week we get somebody complaining about our credit card surcharge. In fact we feel rather frustrated that both ebay and the banks often make more money from a transaction that we do, yet we do most of the work.
If we were to insist on equality with the banks and ebay, then we would have to have to look for a yet higher starting price of £258.42, and at this figure, we would probably never sell any!
If a credit card transaction turns out to be fraudulent, the credit card company has the right to automatically charge the amount back to us, in this case our loss is 100%.

Why Do We Bother?
We sometimes ask ourselves the same question, especially when buyers complain about the credit card surcharge.
We even had one American buyer demand a tax ( VAT = Value Added Tax) refund on his purchase, we will record our thoughts about this person when we get time.
Another (American) buyer insisted on informing us that our agreement with our credit card company stipulates that we may not charge a surcharge to credit card. How he managed to see a copy of our agreement we don't know, presumably he doesn't realise that the United Kingdom is not part is the USA or subject to California law. He is wrong of course.
Some buyers complain, demand an explanation, or threaten to "report us to ebay" when we cancel an auction. We are of course perfectly entitled to do so, both by law and ebay's own rules. Perhaps these complainers think we can run a business by making a loss!
Others accuse us of "getting round ebay's reserve price charges" by cancelling unprofitable auctions. As you can see from the above examples, we would need to charge a higher starting price if we wished to use a realistic starting price. Ebay's reserve price charges are even higher than their starting price fees.
Another irritant we encounter frequently contacts us to tell us he has overpaid on an item. Now this isn't our fault, and we do provide links on every single ebay auction to help buyers decide, before they bid, what is a reasonable price. Many of these ask, sometimes demand that we cancel the auction, and allow them to buy the same item direct from us at the lower price. This is strictly against ebay's rules, we probably should report them for trying to circumvent ebay's commission, and they also expect us to be an accomplice in this underhand practice. We do not wish to break our agreement with ebay, and we also feel that these buyers should honour their contract with us.

Back to our Main Information about Chard for Ebay Buyers page.