Friday, January 23, 2009

eBay Coach Experiment: Selling Coupons

I am intrigued by coupon sellers and how they make a profit, so I am doing an experiment. I've been buying coupons on eBay for years but haven't ever sold any. We get a free Atlanta Journal Constitution newspaper on Thursdays, filled with the same coupon inserts that will be in the following Sunday's paper. I've managed to secure 20 of these free copies a week to do this experiment. So, my inventory costs nothing.

I have always wondered how coupon sellers make money doing this. It is a very labor intensive process, and I can only see a profit if you can get the coupon inserts free. For the purposes of this experiment, I am offering a batch of 20 coupons for $1.50 with free shipping. Coupons worth $2 and more I am putting on auction with a starting price of .99 and free shipping.

Here is how the math works out:

I wonder how these coupon sellers do it after paying for the newspapers. (You can get them free - read my article on "How to Get Unlimited Grocery Coupons FREE.") Some sell thousands of coupons a month. At 50 cents profit an item, you're going to have to sell an awful lot of coupons to make any money. Also, who is doing all the clipping? Do they hire people? Of course, some of the higher valued coupons sell for much more than $1.50. Some good ones to sell are diaper coupons, medicine coupons, pet coupons, cosmetics, hair products, and any type of refill (such as air fresheners).

I'd love to know more about this. From the looks of my experiment, for the time and effort, I think this one will be a thumbs down. I'll keep you posted!

Happy Selling,


Anonymous said...

Not suggesting that someone does this but maybe these people deliver newspapers and have unlimited access to coupons if you know what I mean. Secondly maybe this one of their kid's chores clipping the coupons. A good chore for a younger child.And maybe they get the coupons from other sources such as church or coupon clubs.

Anonymous said...

Suzanne I tried selling coupons once, but I didn't really give it a fair trial.

It was time consuming and I had limited access to free coupons. I even got in trouble with the Mars Corporation for offering their labor for cutting out their coupons. Scared the bejeebers out of

I have often wondered how people actually made money and am anxious to hear of your success.

Anonymous said...

What these sellers are doing is getting paid to advertise.

Let me explain.

As your sample shows the seller is making about 50 cents profit.

What you don't see is that this seller now has contact information for a buyer of a specific product. The seller may send an email or include a flyer in the package about something else they promote.

I could be wrong, but I have use low ticket sales to driver bigger sales down the funnel.

Nice BLOG. Take Care,


Maria said...

I would think the higher-value ones, like the ones for $25 off Lowe's purchases, etc., would do well enough to make the time worth it. I've seen the Lowe's ones go for $10 or even more for the ones that are 10 or 20% off a whole purchase.

Anonymous said...

I have tried to sell coupons and made very little and it took so much time. I learned you can make a little extra money a month and it is a niche. But I don't get it and it seemed hard to keep up with it. I have coupons right now sitting around but I don't get to them. I would love to learn more. And can you use internet coupons??? Printed out coupons? Also some sell attraction coupons, like Disney and stuff. Where do you get those in such quantities? For any attraction? So much to learn.

Angie said...

I've always been curious about this as well. Thanks for doing it. I can't wait to hear the results!

nicole said...

Im about to start this without a store to start to see if it will make sense to open a store. But my theory is that you need to have multiple sets of every coupon and a variety to make money. Personally I will find which person has most of the coupons I need and sometimes I want 40 of one coupon so I will buy from the person that has multiples and then on top of that additional shipping charges for items that end up in the same envelope is another profit. Say I sell 5 sets of 20 coupons to one person and the first item shipping is $1 but I still charge .50 for ea additional item but they all end up in the same envelope and saving me on shipping. Then also having multiple listings of the same item can be placed in one listing for just one listing fee. Sorry if that was long but I will try to find this place again to let you know how it goes in a couple months.

JessicaC said...

I just started listing coupons yesterday, and I'm extremely encouraged! I ended up with 96 free inserts (leftovers from the local newspaper). I have them listed in lots of 20 with 60c shipping for the first lot, 15c each additional lot. Within the first 12 hours, I have netted $25.24. The higher profit comes from folks buying multiple sets. As someone mentioned earlier, I only have to pay the 3c listing fee once per type of coupon, so if someone buys all my sets of a particular coupon, I've only paid the 3c listing fee once. Also, the additional shipping has helped a good bit. My $1 + 60c is lower than pretty much any other listing I found, but I've not lost money yet.

As for time to clip, I did NOT clip these before hand. As they sell, I grab the inserts, pull out 20 or 40 or however many, and cut them 10 at a time. When someone buys 1 lot of 20, it takes me literally a minute to get them cut, plus maybe a minute to print a packing slip and stick them in an envelope.

I had one large order this morning of 80 each of two different types and 60 each of a third type. Here's the math:

4 sets Coupon A x $1 = $4.00
4 sets Coupon B x $1 = $4.00
3 sets Coupon C x $1 = $3.00

Shipping I Received = 60c x 3, plus 15c x 8 = $3.00

Listing Costs:
Coupon A listing = .03
Coupon B listing = .03
Coupon C listing = .00 (I had already sold some of these, so listing was already counted)

Paypal Fee = .30 + .41 ($14 x .029) = .71

Ebay Final Value fees = .12 x 11 = $1.32

Shipping I paid = .78

$11.00 sale
+$3.00 shipping
-.06 ebay listing
-1.32 ebay final value
-.71 paypal fee
-.78 shipping paid
$11.13 net.

I timed myself, and it took me 20 minutes to get these clipped and packaged, which translated into about $33 per hour. Works for me!

mike.mazuly said...

I think it's a great idea the seller makes money and the buyer saves money on everyday products.