Friday, September 13, 2013

Ciphering for dummies

I was doing some ciphering (Jethro Bodine is one of my childhood heros) on my latest eBay sale, and it's not pretty. I got one bid on my sewing machine, so it sold for the starting price of $34.95. Could have been better but not bad, I thought. So then I started to break down my costs versus my percieved $34.95 profit.

Shipping to Maine was $47.72 for the 41-pound box containing the sewing machine and goodies (no fancy "express" or "priority", just plain-jane shipping). I charged a flat $13 handling fee to cover the box (I purchase heavy duty double wall boxes, especially appropriate for this cast iron beauty), packing peanuts, bubble wrap, plus the package of needles and thread I provide the buyer. Those actual costs are about $12.20 but I figure I can legitimately charge 80 cents for my labor packing the machine up and driving it to the post office. I suppose I actually lose money on my 80 cents too, with gas prices the way they are, but I digress.

The final shipping/handling fee was $60.72 ($47.72 + $13.00). The eBay/PayPal fees were $12.64, based on the $95.67 total price ($60.72 + $34.95). So, what did I make on this sewing machine?

* $95.67 came into my PayPal account from the buyer.

* $47.72 went out to pay USPS shipping from the West coast to the East coast.

* $12.64 went out to eBay/PayPal for their fees.

* $12.20 went out for the box/packing peanuts/needles/thread.

* $14.11 I paid for the machine at Goodwill.

I netted $9.00 in my pocket for a nearly-$100 transaction, not counting the hours I spent cleaning and oiling the sewing machine, and the labor and gas money expended to procure and ship the thing. I should have left well enough alone and not delved into this. I never did figure this sewing machine hobby to be a money-maker but it would be nice to break even.

Ebay and PayPal both charge a final value fee on the final sale price of an item. They also charge a fee on the shipping charge collected from the buyer. I can understand the logic behind these online auction places charging fees for the shipping costs. Prior to eBay/PayPal's change in their fee-charging structure, some folks using the auction service were gaming the system by selling items for a small amount and charging exorbitant shipping fees. Let me give an example. Someone has a cell phone case worth $25 on the open market. They might list that case for $1 but charge $29 for shipping (actual shipping might be $5). A buyer pays the $30, which is the going rate for the item shipped to the buyer's door. The seller would be charged a percentage of the $1 selling price, which might be 13 cents that eBay/PayPal makes on the transaction (they should have made $3.25). The seller would then pocket the $24 made on shipping ($29 - $5) and not be charged a fee on that $24. Thus the change by the auction company to plug this loophole.

Those people trying to game the system has only led to eBay/PayPal revising their fee structure so they don't lose money from those trying to circumvent the system. Now all users of the auction service get charged a fee for money that we basically channel from the buyer to the shipping service. Something seems wrong here but I don't know what the solution is.

Ok, I'm done ranting... Even if eBay/PayPal didn't charge a fee for shipping costs, I wouldn't have made much more money in my auction, maybe another 8 bucks. Like I said, this hobby isn't a money maker.

Now for those that didn't make the connection between Jethro and ciphering (Beverly Hillbillies), here's a little blurb I found on the net:

Uncle Jed: (to Jethro) "Boy, show Mr. Drysdale how smart you are. Do some ciphering for us."

Jethro: (enthuisatically) "Sure Uncle Jed! Do you want me to do some Times or Goesintas?"

Jed: "Oh, I dunno. Lets do some Goesintas."

Jethro: (enthuisatically) "Two goesinta six... three times. Three goesinta nine... three times. Four goesinta eight... two times!"

Jed: "Wheeeeee Doggieeee!!!"

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