I recently discovered I hadn't been determining my ebay auction prices correctly. It had been some time since I reviewed Ebay's selling costs. when I did review my costs, I found out why I was watching my income go down.   When I finally reviewed the actual selling costs, I discovered my beginning auction price wasn't high enough to recover the cost of the product plus selling costs. I needed to find a formula for success.

In my research I discovered a general formual to help me determine the starting price which will allow me to earn a decent profit if an item is sold.

It is (material cost + plus listing fees) x 2.5/.80

EG ($3.00 (MC) plus $.50 (LF)) x 2.5 = $8.75.  Next divide $8.75  by .80.  Beginning auction price is $10.90. 

I explain the numbers below. 

Not knowing what my closing costs are exactly, I use the percentages Ebay charges when an item sells.  Ebay charges an estimated 15% of the final price, paypal another 5%. This means our closing costs are estimated to be 20% of the total final price. I then subtract this from 100 % to give me another number which is 80%. This means our final estimated beginning auction price is 80% of the total price we need. We need to add the 20% to this total. We do this by dividing by our 80%. An example: If the cost of my item is $3.00, listing fee $.50 our estimated material cost is $3.50 x 2.5 our profit, we come up with $8.75 as our beginning auction amount. when you divide this by .80 we get a new number or $10.90 or our beginning auction price. This allows me to make a reasonable price if the item sells. As the price goes up, you costs are covered in the new price adding to the profit margin set with the original auction price.

Some people won't use a multiplier. The multiplier can be any number you want determined by your profit.   I chose 2.5 as mine knowing I need to start low in order to sell somethings.  This helps you determine if an item is worthy of putting up for auction of use a buy it now price. What is very important to ebay success is pricing your products correctly. Good luck.