Online auction sites have become the latest rage over the past few years. I can remember when I first laid eyes on some of the top ones, and that was a long time ago. They are growing and leaps and bounds with thousands of visitors everyday bidding on all types of things.
The problem with auction sites is that they are not always a frugal source. Many people think that listing their extra items to get rid of them and making a little extra cash in the long run seems pretty frugal. And it does at first glance. However, you need to be careful of the hidden costs involved with using an auction site.
First – the actual item. Does the item need to be cleaned? Repaired? Appraised? All those things can cost money.
Then you have to get on the auction site and list the item. This takes time. Time of course is money. The better your description of photographs of the item, the better luck you’ll have with people bidding. There is normally a listing fee involved with listing an item on an auction site. It is usually a small one, but it depends often on the price you set your item at. And that in itself can be scary, because you want to be sure you set your price close to something you would be okay with actually selling it at. In case it only gets a handful or one or two bids.
Next, when the item sells, you the auction sites always take a commission which is typically a percent of the sale price.
Here’s a breakdown of what that might look like.
Let’s say I have a really cute brand name purse I want to sell. It retails for over $100. The auction site is only .25 to list it if I start the bidding under $10.00. So I list it at $9.99. I don’t use any upgraded features like a bold title or a subtitle or a gallery picture or whatever else is offered.
A week goes by and the item gets one bid and I sell it at $9.99. The auction site will take approximately 10% of that sale, which is about $1.00. So far, I have spent $1.25 to sell an item that I only got $9.99 for.
Next you have to worry about shipping. Most sellers have the buyers pay shipping which is what you should do. Let’s say that you are going to send it priority and it costs $4.50 to ship. Now you have to find a box, tissue or other wrapping, tape and any other items you use. Some sellers print the winning auction email to include. That costs printer ink.
Overall, that auction could wind up costing about $4-$5 without the shipping costs (because you are having the buyer pay those). Was it worth it? Well, if you don’t mind winding up with $5.00 for an item that is worth lots more, than you did fine. But wouldn’t it just be easier to take it to a consignment shop for that amount?
Just keep your eyes open and research fees, commissions and other auction related items before you list anything. You can make a bundle off those auction sites, but you just have to be careful and know what you are doing.
Nicole Humphrey writes articles for the Scrapbooking Blog and for the Frugal Blog. She also guest blogs on a variety of topics. You can read more of her articles by clicking here.
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