This article/blog is being written for my friends over at Shacknews. A frequent poster today announced he walked into Target and aquired a PS3. He’s not sure if he should keep it or take it back. People are suggesting he eBay it for mad moneyhats. I’m suggesting otherwise, as I think the eBay market has crashed. Systems that were once going for $2,500 on average are now barely breaking $900. And that’s not even a guaranteed auction price. I’m going to take a quick sampling of the listing closings right now, December 5th, 2006 at 11:00 AM CST and just see what the average profit* is.
*Profit assumes seller simply walked into the store and bought a PS3. If the seller spent any significant time hunting down a PS3 for sale, this profit would actually be smaller as I’m sure most people are like me and don’t consider their free time worth $0 an hour.
Auction 1: Bids 8, Price $927
Auction 2: Bids 45, Price $1,059
Auction 3: Bids 29, Price $890
Auction 4: Bids 0, Price $900 (But didn’t sell, so $0 profit)
Auction 5: Bids 21, Price $850
All of these prices were current as of the time I visited the auction, but all were under 5 minutes remaining so the ones that were not closed I do not think changed significantly. However, if they did let me know and I can recalculate. I included the one auction that did not sell because there is the probability of the auction not selling.
Auction 1 sold at a $327 profit. Auction 2 sold at a $459 profit. Auction 3 sold at a $290 profit. Auction 4 did not sell, $0 profit. Auction 5 sold at a $250 profit. The average profit was $265. The profits listed here are PRIOR to eBay fees. I am going to assume each listing started at $600 dollars to make the calculations easier, even though we know this assumption is false as Auction 4 started at $900. I am also going to calculate the closing fees based on the average profit, so each system sold for $865 in calculating fees. I’m just looking for an average cost to insert a PS3 so this will work.
Fees are calculated based on the published rates.
$4.80 in insertion fees.
Final value fees are calculated at 5.25% of the first $25 = $1.31
Then the value up to $1,000 is calculated at 3%.
$865 – $25 = $840 x 3% = $25.20
Total closing fee = $26.51
Total fees = $31.31
This gives us a total of $833.69 after fees, so an average profit of $233.69. This is far below what the original auctions were going for, and this average is probably skewed due to the low sample size. So if you were able to walk into a store, purchase a PS3 without waiting, and eBay it this is the profit you are looking at.
However, lets say for arguments sake you had to spend 12 hours hunting down a PS3. Twelve hours of your free time, this is far less than what some people sat in line for. If you spent just 12 hours looking for a PS3 you only made $19.47 per hour. I don’t know about you, but I value my free time at a lot more than $20 an hour.
Edit: Auction 3 closed much higher, so I will include the new price of $1,100 in the calculations below:
Average profit per auction: $307
Fee recalculation @ average sell price of $907: $32.57
$907-$32.57 = $874.43 Total Sale price, or $274.43 profit.
$22.87/hr @ 12 hours time spent to find one.
Even with this adjustment it does not make a for a great increase in profit.
Well I finally 5-starred all of Medium last night. Now on to Hard and besting yakz and Jerome’s scores!