Selling on Listia.com – a losing proposition

I originally wrote this posting in April 2010.  I’ve recently taken a new look at listia, and I’ve revised this posting with the current (April 2012) credit values.   While “prices” for many items have increased as the value of credits has plummeted, the problems outlined below continue to be an issue, in particular for items that are not very popular.

As followers of my blog (and my friends in facebook) know, I have been using lista.com for a few weeks now, mostly as a buyer (they give you a bunch of free points when you sign up), and finally as a seller. Well, after some calculations I’ve decided that Listia.com is as bad a business for “sellers” as Mary Kay.
In the last week I’ve listed a bunch of small, lightweight stuff: scrapbook embellishments, beads, pendants and little bottles of perfume.  I offered free shipping in all of them, and put minimum bids so that it wouldn’t end up being a completely losing proposition. Still, I pretty much lost money on everything I “sold”.  And by losing money I mean that I will end up having to pay in shipping costs more than the number of credits I got for the item in question.
While listia.com sells credits for 2-cents each (it was 10-cents in 2010), the value of each credit is actually about 1/6th of 1-cent (1 cent in 2010). If you post a $1 Amazon.com gift card code in listia, you will get about 500 to 750 credits for it. That means if you want to buy credits all you do is buy the online gift card from amazon, then post it on listia, send the code to the winner and pocket the credits.
Meanwhile, postage starts at 44 cents for letters and $1.22 for one-ounce packages.  This means that the minimum amount you need to break even on shipping alone is 220 credits for items that fit into a regular one-stamped envelope and 610 credits, if you’re going to actually send a very lightweight package.  Anything you send in a small flat rate box better net you at least 2575 credits, and don’t do a large one unless you are sure you can get 7325 credits from it.  The actual numbers are actually higher, as you must pay for delivery confirmation or risk having the credits returned to the buyer.  Packaging materials also add up (though once you start getting stuff from listia, you can re-use the ones you get).

Given those numbers, it’s usually hard to recoup the costs of shipping items for free.  Very popular items – or very expensive ones, such as Coach purses and silver and gold jewelry – will easily net tens of thousands of credits, but a no-brand purse, a pair of shoes or even a mystery box filled with low-priced cosmetics, will likely sell at a loss.

More and more people are realizing this and they are charging shipping – but as shipping consists of real dollars, it’s easier for users to figure out when they’re getting a good deal and when they’re not – and people are on listia to get great deals.   People are willing to pay shipping for expensive or unusual items, but don’t count on getting it for an old t-shirt.

That said, many ebay sellers who can’t afford the high posting fees on ebay are moving to listia, and are trying to “sell” their items by asking for shipping costs many times over the real ones.

Listia is also starting to push their “local” listings, to be a competition to craigslist and freecycle I imagine.  If that takes on, there will be more reason to join.

If you do want to join, use this link and you’ll get an extra 100 credits.