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Markup
I’m starting to sell online on sites like eBay and Amazon just tires, what percentage markup would you recommend to do free shipping and to compete with the other guys because eBay gets a 10 percent final value fee and PayPal gets 3 percent fee so besides already adding 13 percent what would be a good percentage to include free shipping to anywhere in the usa
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2 Replies
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To me this would not be much different than selling tires at the shop.
Tire margins – just for the tire, the labor is separate – typically need to be 20% to 35% to be reasonably profitable. That means the markup would be 1.25 – 1.54. Some shops run lower but if you look closely you will usually see that they are just trading dollars around leaving no profit or leaving a loss when all is said and done.In your case the cost of shipping, PayPal and Ebay would have to first be added to the tire, then apply the same formula.To be fair, the online margins probably should be higher since you don’t have the possible related service sales that you do at the shop. I’d be cautious about “competing with the other guys”. Some are very heavy hitters and others are on their way to going broke. -
I really appreciate your feedback it helps me get a stance at where to stand, thanks buddy
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