Earning on Ebay #2: How Fees Affect Your Sales

As I continue my "How to Sell on Ebay" set of hubs, it would be good to give you a breakdown of the various fees for selling on Ebay. I want you to know your real profit potential, and see how much you can actually make on Ebay. Now remember, not all of these fees are an upfront cost, some of them are a potential add on in exchange for potentially increased item exposure.

1. Listing fees: Just like the name says, these fees occur as a cost for listing an item on Ebay. This money is gone whether an item sells or not, so it can end up being a significant risk/reward if you decide to go all out for an auction. As of right now, your first 50 listings per month are free at least for the basic format. If you are not a high volume seller, then you will come nowhere near this number. However, if you find yourself clearing out multiple corners or even multiple rooms each month, then you will go way over this cap. After that, you pay a set amount based on your starting amount. This can be as little as 10 cents, but it can add up over multiple listings. Additional listing fees can include changing your item location. You may want to list an auction for a sports jersey in sports memorabilia and in general clothing, and that costs extra. If you want to gain maximum exposure on Ebay, you can even be featured on the homepage. Some extra listing fees include adding highlighting or bold print to your listing title. These will help you stand out, and bring attention to your item right out of the gate.

2. Pricing fees: When I say Ebay pricing fees, I am talking more about extra services like Buy it Now or reserve pricing options. Both of these can have their benefits. A BIN (Buy it Now) can allow you to move items fast and even get a high price on occasion from impatient buyers. A reserve ensures that you do not end up selling your authentic, concert-worn Elvis apparel for a penny. While these do give you much more control over the final bid, they also cause you to incur some extra fees. Buy it now gives you a higher initial listing fee for the fixed price, and both of these options result in much higher final costs since you pay a higher percentage of the item's ending cost in most cases.

3. Final value fees: These fees are only charged if your item sells. They commonly run about 9% for auctions, but they can be higher or lower depending on which listing options you choose or if you are a top-rated Ebay seller who gets to enjoy a fee discount. These costs can seem minimal if you only sell low priced items, but the percentage is the same for auction style listings. One thing to take notice of, some fixed price final value fees (BIN) actually have a scaled final value system, meaning that you pay a smaller percentage on larger amounts. This is something important to remember if you sell many high priced items.

4. Shipping: Although this isn't an "Ebay fee" this is a cost that you will have with pretty much any transaction. This cost can be multi-faceted, so do not immediately think that the ending price is the money that will be in your pocket. You will have to pay for packaging materials, and the shipping cost itself. This can get very expensive very fast, so make sure of two things: Know the difference between shipping rates (First class is not the same as media mail!), and if you do your own packing, make sure all of your information is accurate. You need to make sure you use an accurate scale to avoid having to pay extra postage, and be sure that all of the information is correct so your item goes to the right place. Nothing is worse than having to pay shipping twice, or losing an item completely. Some small fees can also include tracking and signature confirmation, and some other not so mall fees include international shipping and shipping insurance. Finally, this is just my two cents, but the post office can prove to be extremely unreliable at times. Make sure that you package well and know that shipping around the holidays can become very perilous.

5. Paypal fees: Paypal is the little cherry on top of the fee sundae, and it can end up being a real pain when it comes to your bottom line. They are essentially 3% of your selling price (Actually 2.9%, and they can decrease down to 2.2%, but only if the transaction is over 10K). One thing to pay attention to is how Paypal displays your account values. They show the gross amount on your main page, but that is NOT what you actually receive, that is the amount before fees, so make sure you know how much you actually are getting after fees. To do this, you must click into a specific transaction, and see your net transaction amount.

While these charges can end up being one giant headache, there are some perks to paying some of these selling fees. For example, I like having the option of deciding exactly how much I want to sell an item for with BIN. Additionally, I greatly prefer getting my money online through Paypal instead of having to wait for a money order, check, or sweaty dollar bills from a buyer's wallet. Selling online can be fun, but make sure that you know your real profit potential before you dive into creating some listings on Ebay.