So what are the four expenses that we all must be aware of? They are eBay fees, PayPal fees, Shipping expense, and the cost of the product being sold. If the total of these four expenses is less than the total you earned from your auction, you have made a profit. It does not take an accountant to understand this, nor is this anything that should come as a surprise. However it is this fundamental concept that should be in your mind at all times while managing your online business.

So as an example lets say that you sold an item weighing 6 ounces for $13 with $5 shipping that you purchased for $5.60. You listed the item at a fixed price of $13 and in a category with a final value fee of 12.00%. In this ituation your expenses are as follows.

As you can see this item brought in a total profit of $7.39, which in eBay terms is usually a pretty healthy profit. It is this kind of analysis that is required to sell effectively and profitably on eBay. This type of analysis can be used to determine if a product will be profitable to sell on eBay. However it is more important to keep track of these figures to see how healthy and profitable your current business and products are.