eBay Fees

Once you have an account with eBay, selling items through the website is very straightforward. However, some careful planning is required to help ensure you get the right price and keep any fees as low as possible. This post outlines the different approaches to selling through eBay and, roughly, how much it will cost. I met someone recently who sells between approx. £4,000 ($6200) every month on eBay, with total costs of less than 30%. Now that's a decent living!

Auction, Buy Now, Make Offer 

There are a number of ways of selling an item through eBay, all of which can help to sell it for a reasonable price. These include the following:

1. Auction: This is one of the most popular methods of selling an item. It allows interested buyers to bid for a limited period of time. The highest bidder wins the auction when it ends and buys the item. 
2. Auction with reserve: A reserve price can be set. This incurs a small additional fee, (generally between 10 pence and £1.30 (20 cents and $1.75) but prevents your item from being sold too cheaply. In some countries, there is a minimum reserve price, whereas others have no such rules. 
3. Auction with ‘Buy it now’: A ‘Buy it now’ button can be displayed alongside your item, which often tempts people who really want to secure the item and would rather not take the gamble of losing out in an auction.
4. Classified ad: Items can be sold on eBay with a fixed price. This is popular for high-value items such as a car or property. A fixed fee is payable, depending on what is being sold. 
5. Make offer: This is often available with items that are listed for sale in a classified ad. It allows interested buyers to suggest a price to pay and wait for the seller to accept or decline the offer.  

Calculate Your Fees

It’s important to be aware of the costs incurred when selling an item through eBay. In some cases these can easily escalate and the final costs can be more than the profit you had hoped to gain from the sale. The fees depend on what you are selling and how you want to sell it. Here are the fees that may be incurred:

1. Insertion fee: General items (not cars, holidays or property) incur an insertion fee ranging from free to around £1.30 or $2 (or whatever the equivalent currency of your country), depending on the starting price. Large items such as a car or property have a higher fee (in the UK, a car currently costs £10–14.99 and property costs £35).
2. Buy it now: Can be included in an item for auction and usually costs 20–40 pence or, in some cases, is free. Exceptions include large items such as a car where a ‘Buy it now’ price costs roughly the same as an insertion fee.
3. Reserve price: eBay charges 1–3% of the reserve price, although in some countries this is free up to a specific amount. If a reserve price is included, the insertion fee is based upon this value, not the starting price. In some countries, a maximum fee for the reserve price is applied.
4. Sale price (final value): eBay charges 9–10% of the final value up to a specific maximum, depending on the country. High value items such as cars are charged at a particular amount. 
5. PayPal: If your buyer pays via PayPal, then PayPal will charge a fee for handling the transaction. It charges roughly 20p or $0.30 per transaction, then between 1.4% and 3.4% of the sale price (final value), depending on the amount. In some countries, a fixed percentage is charged for each transaction. 

The Cost of Selling on eBay in the UK
Selling a collectible book through eBay with a starting price of £15 will incur an insertion fee of 50p. If the auction ends at £35, then eBay will charge 10%, which comes to £3.50. If the buyer pays via PayPal, then PayPal will charge 20p plus 3.4% of £35, which is £1.19. So although the book sold for £35, you will be paid £29.61 because the fees amount to £5.39. There are also further additional (optional) fees if you include more than one photograph when selling an item and use other selling tools. These are covered later in a forthcoming post.

Watch Those Fees 
Sometimes it’s easy to get carried away with all the bells and whistles of selling on eBay, which can help to tempt buyers into purchasing. However, it can become expensive, especially for low-value goods. Add together the cost of an insertion fee, reserve price, extra photographs, a colourful theme, the commission fee for postage and the 9–10% charged on the final price, and you can easily see the total fees exceeding 20% of the value of the sale.

Hot Tips

• Carefully calculate the total fees for a number of different ways of selling an item on eBay before deciding which one is best.
• eBay occasionally holds promotional offers where insertion fees are free or other fees are reduced.

There are So Many Ways to Sell Online!

Text is from How to Make Money on the Internet by Rob Hawkins (Flame Tree Publishing 2012). Available at all good bookshops, Amazon, and direct from the Publisher.

Coming Next:  eBay Planning