When it comes to building a profitable business, it’s essential to choose marketplaces that leave you with most of your hard-earned profits. If you sell your products online on websites that aren’t yours, such as eBay, each transaction will contribute to the platform you’re using.
eBay is one of the most popular (and oldest) third-party selling platforms. But what does it cost to sell your product on eBay? In other words, how much loss do you have to account for to make a profit from your sales? There are a few fees to be aware of if you’re new to eBay selling, so read on to learn more about what to look for as a merchant on the platform.
What Fees am I Paying as a Merchant on eBay?
You pay two fees as a merchant on eBay: insertion fees and final value fees.
eBay writes, “For most casual sellers, it’s free to list on eBay. If you list more than 250 items per month, you’ll start paying a $0.35 insertion fee per listing. Category exclusions apply.”
Every month, you get up to 250 listings where you don’t have to pay any insertion fees. This limit is higher if you have an eBay store. After you use your insertion fee allowance, insertion fees are non-refundable if your item doesn’t sell.
Insertions fees are charged per listing and per category. If you list one item in two categories, for example, eBay will charge you twice, once for the original listing, and anytime you list it afterward. If you create duplicate auction-style listings for identical items, you’re charged per listing (insertion fees are charged every time your listing renews).
However, if you have a listing with multiple items, eBay will only charge you one time.
In short, insertion fees are charged before your sale, so even if your items don’t sell, keep track of the insertion fees your business may be subject to on eBay because they can add up quickly if you’re not paying attention!
Final Value Fees
In contrast to insertion fees, eBay charges you for final value fees after your item sells. Unlike insertion fees, this is a one-time charge.
The final value fee takes into account the item price, handling charges, the shipping service, sales tax, and other applicable fees.
eBay takes anywhere from 2% to 12% of the total sale value. The total sale value includes both the item cost and shipping.
2-12% is a pretty big range. This is because eBay factors in the following variables when determining which percentage to charge:
- Item price
- Any optional listing upgrades you add
- Merchant conduct and performance
- Format and category of the item
- What type of account you have as a merchant (personal or store)
Don’t bother trying to cheat eBay to avoid paying the final value fee. If you offer or reference your contact information, or ask a buyer for theirs, you’ll be charged a final value fee based on the amount of the sale even if your item hasn’t sold.
Merchant value fees increase if your account doesn’t meet eBay’s minimum merchant performance standards on the evaluation that takes place on the 20th of every month. You’ll be charged 5% more the following month.
In addition, if the category “item not as described” in your service metrics is rated as very high, you will be charged an additional 5% in final value fees in those categories the following month as well.
In other words, making sure everything you are selling is quality is extremely important for more reasons than just customer satisfaction.
Depending on which subscription option you have with eBay, your monthly fee varies.
Check out the monthly fees below:
Listing Upgrade Fees
When you add additional features to your listing, you face listing upgrade fees. These are completely within your control. For example, you will pay for upgrades on auction-style listings. You will also pay to update Good ’Til Cancelled listings. A few other upgrade features include:
- listing in multiple categories
- international site visibility
- “buy it now” option
The fees for listing upgrades can be anywhere from 10 cents to $6. Again, this is a pretty wide range, so you’ll want to be cognizant of how this changes from listing to listing.
What’s the best way to calculate your fees?
To put it simply, your eBay fees are dependent on many different factors. To thrive as a business and increase your profits, calculate the item’s total applicable fees.
Thankfully, eBay does try to simplify the process for their users (as much as they can, anyway). Click here to follow eBay’s advice about how to calculate your total fees. They give multiple examples based on whether you listed your listing as auction-style or fixed price.
Here’s an example of an auction-style listing:
Here’s an example of a fixed-price listing:
Maximize your Profits on eBay
Now that you’ve learned all about fees on eBay, consider checking out the complete guide to how to reduce eBay merchant fees. This will help you move forward with your eBay fees in mind and take steps to reduce costs and find success.
Take control over your company’s profits by taking actionable steps to decrease the number of fines you face. In combination with reducing fees, maximize your sales and optimize eBay listings, and you’re sure to come out on top.
If you strategically manage your eBay account, you can ensure you are making a profit and not falling victim to hidden fees.