If you're going to run a successful eBay business, you better get used to paying eBay. That's because eBay gets its cut every time you list or sell an item on the eBay site. Every time. It may be a few pennies here and a few pennies there, but eBay's fees add up quite rapidlyand become a significant expense if you're selling a lot of items each month.
For that reason, you need to understand the costs involved before you put any items up for auction. eBay charges two main types of fees to sellers:
Insertion fees (I prefer to call them listing fees). These fees are what you pay every time you list an item for sale on eBay. They are based on the minimum bid or reserve price of the item listed. These fees are nonrefundable.
Final value fees (I prefer to call them selling fees or commissions). These fees are what you pay when an item is actually sold to a buyer. They are based on the item's final selling price (the highest bid). If your item doesn't sell, you aren't charged a final value fee.
Table 1.1 lists eBay's current insertion fees (as of fall 2006); Table 1.2 lists the current final value fees.
Table 1.1. eBay Insertion Fees
Starting Bid Price
$500.00 or more
Table 1.2. eBay Final Value Fees
Final Selling Price
Final Value Fee
Item not sold
5.25% of the final price
5.25% of the initial $25.00 ($1.31), plus 3% of the remaining closing value balance
$1,000.01 or more
5.25% of the initial $25.00 ($1.31), plus 3% of the amount from $25.00$1,000.00 ($29.25), plus 1.5% of the remaining balance
eBay also charges a variety of fees for different types of listing enhancements, such as bold and highlight. And, as you might expect, all manner of fine print is associated with these fees. The most important things to keep in mind are that insertions are nonrefundable; you won't be charged a final value fee if the item doesn't sell; and it doesn't matter whether the buyer actually pays youyou still owe eBay the full final value fee, even if you get stiffed.
Invoicing on your account occurs once a month, for the previous month's activity. You'll get an invoice via email detailing your charges for the month. If you've set up your account for automatic credit card billing or checking account withdrawal, your account will be charged at that time. (If you prefer to pay via check or regular credit card, now's the time to do it.)
Know, however, that these aren't the only costs you'll incur in running an eBay auction. Most sellers opt to accept credit cards via eBay's PayPal service, which charges its own fees. For the average small to mid-sized seller, PayPal charges 2.9% of the total payment price, plus a flat $0.30 per transaction. That's right in line with what a traditional retailer would pay to a bank to handle its credit card payments.
As you can see, these fees start to add up. For most eBay businesses, you can estimate paying 12%15% in fees for every successful sale you make. This doesn't take into account the actual cost of the item you sell, nor any other costs you incursuch as the costs of packing materials, labels, Internet access, and the like. You'll need to factor all these costs into your business model, just as you would factor in rent, credit card fees, and other operating expenses if you were running a bricks-and-mortar business.