eBay doesn't talk about it, but it is no secret that sell through rates (STR) have been falling on eBay. Just ask any seller (including me) and they will tell you that their STRs have fallen anywhere from 10% to 30% over the past two years.

 STR is one of the most important data points a seller should monitor. Simply put, it is the number of auctions successfully closed (i.e. sold) versus the number of auctions launched. For example, if you launched 60 auctions this month and 40 of them were successful, then your STR would be 66% (good). If 50 out of 60 auctions sold, then your STR would be 83%. Generally anything over 70% is considered excellent.

Falling STRs affect your profits probably more than any single factor. Remember, you pay a listing fee for every item you launch on eBay. If your average starting price for an item is $19.99 then your listing fee is $0.60. Now add say 30-cents for photo hosting, 10-cents for scheduling and $1.00 for the bold option. This brings your total to $2.00. So if only 50% of your auctions close successfully, this means you are paying an effective listing fee of $4.00 for each auction you launch.

If your average selling price (ASP) is $25 with a 50% STR, that means your effective listing cost (at $4.00) is 16% of your final value. Now add final value fees and PayPal fees to this and your total cost is (FV=$1.31 + PayPal $0.73 + effective listing fee $4.00) $6.04. That works out to 24% of what you sold the item for. If your product cost was $14, then you are left with $4.96 profit or 19.8% --not a lot of profit for the work expended. You have to sell a lot of widgets at a $4.96 profit to make a good weekly income.

So how do you cope with this reality? The first step is to review your auction titles, descriptions and photographs and make improvements that will increase your STR. Next is to run your auctions through a good research tool like HammerTap to determine the best ending day and time, optimum optional features and keywords for each item you are selling. Often a few adjustments in these factors can increase your STR by as much as 10% to 20%.

The next obvious factor is to increase your ASP. Unless you are selling in really high volumes or you have very high profit margins, it is very difficult to make a living on eBay today selling products with an ASP under $50 --and $100 is even better.

STR is only one of the important data points a seller needs to monitor if they want to become successful.  We talk about all of them in The Complete eBay Marketing System available in our eBay Store.