Step Right Up and Get Your Instant Patch Business Right Here

Probably a year ago I did a post on this site regarding eBay fee changes that I thought would make it near impossible for sellers to continue to run very large stores on eBay. In that post I mentioned eBay seller Kindanic (John Wallace) because for some time he has had the largest eBay store in the Boy Scout category in terms of quantity of items listed. By my math he is paying more than $500 a month now in fees for just having these 10k items listed, regardless of whether he sells one or not. So imagine my surprise (not really) that Kindanic wants to get out of the business all together. While I’m sure there could be other issues weighing on his mind that have prompted this decision its still not too far fetched to imagine that the crushing eBay fees are part of this decision.

 

Here is what I can tell you. According to my research his eBay account has sold $11,232 in all categories over the last three months. He sold 1,037 items at an average price of $10.83.

 

So how does that math work out for ya? His asking price now for everything (at least the advertised price) is somewhere between $79,000-$94,200. Click on the listing to see for yourself what I’m talking about. I invite any comments that you might have. Pretty juicy stuff to see a dealer sell out in such a grand fashion!

 

SCOUT PATCH EBAY BUSINESS $400,000++++ Retail Value

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Comments

Do you think it’s the fees or the new 1099 reporting policy that is the main driver in pushing people out?

By ISCA87L on December 10th, 2010 at 7:03 am

Let’s look at the numbers here.

At the current bid, 31,400 items are on offer for $79,500 or an average of $2.53 per item.
The declared retail value is $450,000+ or an average of $14.33 per item. This is a healthy retail margin if you can get it.

Your calculation for sales in the last 3 months (which at this point includes some of the post-Jamboree frenzy) indicates a unit sale average of $10.83. Relative to the unit cost, the margin here is still good ($10.53-$2.53), but the problem is volume. 1,037 pieces sold in 3 months is 11-12 pieces a day. If one assumes that the buyer of the store is able to hold sales constant, the gross margin per day is $88-94. Deduct the overhead and shipping costs and you may be making a bit more than McDonald’s is paying.

As an exit strategy, a 3 day auction of the “business” (actually, the inventory) seems unusual. It would take almost 3 days to scan the inventory of 31,400 items. Moreover, to create a reasonable assessment of the inventory value would take the kind of expertise that resides with the 14 stores mentioned in your earlier posting that have more than 1,000 items up. Those 14 plus a few others that run internet but not ebay stores are the buyers for the inventory.

If kindanic gets lucky, someone makes a bid. More likely, the inventory is split up and sold off at a rather lower price to the 14-20 others who are in the business now in a significant way.

By smaire on December 10th, 2010 at 7:40 pm

You make a good point about the new tax policy. I had a phone call from another eBay seller in the last couple of weeks inquiring about what he needs to do because of the impending change. Basically its PayPal that’s driving this. Starting in 2011 (that’s weeks from now) people who accept payments on PayPal of either $20,000 or 200 transactions per year will have to report this income to the IRS on a form. So for those of you who sell on eBay as a “hobby” need to see your accountant and check to make sure you are ready for this. So perhaps that’s another piece that motivated John Wallace to get out of the patch biz. BTW, he has relisted the auction with the same terms for full 7-day auction. [B][B]SCOUT PATCH EBAY BUSINESS $400,000+ Retail Bargin

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By jason on December 12th, 2010 at 8:52 pm

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