There is little doubt that given the potential audience advertising on eBay can be very cost effective. Compared to other forms of advertising it is relatively inexpensive. However, many eBay users rarely bother to work out exactly what it is costing them to make a sale.

There are the obvious costs such as the listing, enhancements and final value fees. Also you have to add the charges made by Paypal if that is the option of payment chosen by the buyer. But then you should really also consider what I call the invisible costs. Let me explain, if for instance you buy many of the items that you sell from Flea markets and garage sales what value do you place on your time going to such events and don’t forget any travel expenses to get there.

Once you have got your items home you will need more time to research, photograph and list your purchases. Now add the time you spend packaging the items after sale and standing in line to post them. You could easily find that each sale you make on eBay could take an hour or more of your time.

If you really want to know how much time you spend on your eBay business you need to keep a detailed diary for a few weeks. Record the time when you leave your home on “eBay business” and when you return. Add any expenses other than the cost of any items you buy to sell on eBay. Once you are home log any time you spend listing, photographing and packing items.

Do this for a few weeks and this will give you a good idea of the non costed time you spend on your ebay business in an average week. Next decide what you think your time is worth $10, $20 or $50 an hour, this figure is entirely up to you and represents what you would expect to be paid for an hours work by someone else.

You can then work out how many items you sell a week on average. So your figures might look something like this. Average hours per week 6 at $20 an hour, average number of items sold per week 30. This would mean your time is worth $120 a week to you and if you sell 30 items it has cost you $4 of time per item.

So to work out your true profit on any item you need to add not only the cost of the item but also the other costs. eBay, the Paypal and shipping fees and your time costs. You will now be able to calculate what profit or lose you made on the sale. You should also include something to cover those “mistakes” that we all buy that disprove the theory that you can sell anything on eBay. After that you will be able to calculate the true profit that you are making from your ebay business.

I am not knocking eBay, quite the contrary; I think it is one of the best methods for anyone to build a successful online business. The point is that if you are to make real profits on eBay it is important to make sure that you use your time to best advantage. This can mean getting software to speed up some tasks and possibly reviewing how and where you buy the items you sell through eBay.

About the Author: Dave Bromley is a writer and internet marketer who specialises in subjects related to ebay and online auctions. You can subscribe tio his newsleter and 6 part mini e course by visiting his information packed web site at http:http://www.ukauctionline.co.uk