Friday, January 16, 2004

How Can They Stay In Business?

Just got a postcard from a new local business telling me about their service. Kinda like spam, only sent via snail mail.

It's from a company called iSoldit, that promises to sell your stuff on eBay for you. For a fee.

Let's review. Supposing I wanna sell something worth about $100, and I won't let it go for less than $80. Let's pretend I post it on eBay, with a reserve of $80, and it ultimately sells for $125.

eBay charges me $2.20 to post the item, plus a fee (based on the selling price) of $4.06. I can even take PayPal for free (what 'cause I'm a person, and not a business).

All things considered, I get $118.74 of my $125 selling price. Not bad.

Now, iSold tells me -- via postcard -- that their commission is a whopping 35%. I'd get $81.25 from the $125 sale. That's, y'know, less.

The plot thickens. I go to their website -- I am fascinated, truly, to see how this works. The postcard is very clear that the commission is 35% (or, at least, 35% on the first $100). But the website says the commission is a flat 25% of the first $1000. Plus all eBay and PayPal fees. (The PayPal fees are particularly galling -- a private seller wouldn't have to pay PayPal fees, but iSold is a business so it does -- and passes the fees on to the individual seller.)

Meaning that, on the $125 item, one pays iSold:

$31.25 commission + $6.26 eBay fees + $3.05 PayPal fees

for a net sales price of $84.44.

And if the postcard is right and they actually charge 35% commission on the first $100, the take-home drops to $74.44 -- a net of just under 60% of the selling price.

Their "About Us" explains that the idea came about when they were thinking about a school fundraiser and how everyone probably had sellable crap in their homes they'd be willing to donate -- but that nobody wants to go to the effort of selling it. And, I guess, if you're looking to donate the item/whatever-you-can-get-for-it to charity you wouldn't be all too concerned about giving someone a chunk of the money in order to handle the entire transaction and save you the trouble. But, really, if you actually care about getting the most money for your junk ... why would anyone actually use this service?

2 comments:

grodygeek said...

You may not be a math major NZ, but you done it for me. So are you taking the action on how long they actually stay in business? I mean, we americans are rather dang lazy, but even you who has admited to shameless lazyness (which I believe NOT) won't bite a wee bit. So, who is their stupid potential clients? Gordy

andreakingme said...

Laziness and fear of technology. Idgits.