Starting an eBay store is an affordable way to start a business. But it’s not completely free. There are several fees you may need to pay upon signing up or making sales. The exact amount you’ll pay depends on your business model. But here’s a guide to some common expenses as you learn how to make money on eBay.
What are eBay Seller Fees?
EBay seller fees are any expenses that a shop owner pays to set up their shop or complete sales. The amount of each depends on what type of account you choose, how many items you sell, and how much they cost.
Main eBay Selling Fees
EBay charges a variety of fees for different types of shops and accounts. Here are some of the most common types.
Account Fees
When you first sign up for an eBay store subscription, you have several plans to choose from, each with its own fee structure. Individual eBay accounts are free. However, the following offer more powerful selling features for businesses. Here are the options.
Starter: This is the most fundamental store subscription option. It is priced at $7.95 per month, or you can pay just $4.95 monthly if you opt for an annual subscription.
Basic: Basic accounts are akin to starter accounts, but they incur fewer insertion fees. The monthly fee for this account is $27.95, or $21.95 per month if you opt for an annual subscription.
Premium: Premium accounts offer these features, along with extra capabilities like Selling Manager Pro. This option costs $74.95 monthly, or $59.95 on an annual subscription.
Anchor: Anchor accounts offer extra product listings and fewer insertion fees. This option costs $349.95 monthly or $299.95 each month for annual accounts.
Enterprise: Enterprise accounts come with thousands of listings for shops with tons of products. This option is only available as an annual plan, which costs $2,999.95.
Listing Insertion Fees
An insertion fee is the initial charge a seller incurs when listing a product. eBay sellers can list up to 250 products for free each month, with the possibility of more listings available through an eBay store subscription. This listing fee applies only after you exceed your monthly limit. Currently, the eBay insertion fee is $0.35 for each listing within a category, regardless of the final or reserve price. Therefore, if you wish to list your item in multiple categories, you will incur this fee for each category. Additionally, this fee is non-refundable if your item does not sell.
Good ‘Til Cancelled Listings
Good ‘Til Cancelled listings are fixed-price fees that automatically renew every month. It includes the insertion fee, and may include listing upgrades if you choose. Whatever price you pay when originally listing the item is what it will cost each time it renews. This is ideal for products you want to sell on a consistent basis.
Optional Listing Upgrade Fees
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Optional listing upgrades offer extra features that may help a listing stand out. There are a variety of options available. The exact cost varies depending on the price of the item and the type of listing. Here are some common options.
Type of upgrade – Cost for items up to $150 or real estate listings – Cost for items over $150
Bold – $2 – $3
Gallery Plus – $0.35 – $0.70
Subtitles – $1.50 – $3
Reserve Price – $5 – $5
Final Value Fees
Sellers are also required to pay a final value fee when an item is sold. This fee is calculated as a percentage of the total sale amount for either a fixed-price listing or an auction item, plus an additional $0.30 per order. It is important to note that this fee also includes third-party payment processing fees, meaning you won’t have to pay separate PayPal fees or any additional charges on top of this.
How is the Final Value Fee Calculated on eBay?
Final value fees are calculated as a percentage of the final sales price plus $0.30. The percentage used varies by category. It is 12.9 percent for most categories. But some items vary. For example, books and magazines have a 14.6 percent fee. And clothing is charged a 15 percent fee. The percentage generally goes down for sales of more than $7,500.
Payment Processing Fee
EBay now rolls payment processing fees into its commission fees. So there is not a separate processing fee. The final value fees often include between 12 and 15 percent of the selling price. However, that includes more than just payment processing, which often falls between 2.5 and 3 percent for other online processors like PayPal.
Additional eBay Selling Fees to Consider
In addition to the standard fees that come with many listings and accounts, sellers can opt for certain upgrade fees to increase visibility or access extra features. Here are some optional upgrades you may pay more for.
Promoted Listings Fee
Promoted Listings Standard helps enhance the visibility of your products by placing them higher in search results. This feature is accessible to Top Rated and Above Standard shops. To qualify, you need to list items consistently and maintain positive ratings. The fees are calculated as a percentage of sales generated from promoted listings. Additionally, you have the flexibility to select an ad rate that suits your shop and budget.
Classified Listings Fee
EBay offers classified ads in addition to its ecommerce and auction style listings. Fees are typically $9.95 for a 30-day ad. There are no final value fees for this type of listing.
Shipping Costs
EBay sellers are responsible for arranging their own shipping method. And the shipping rate you charge on purchases is factored into the final value fees paid when an item sells.
International Fees
EBay international sales sometimes come with extra fees to cover currency conversion and exchange rates. If the buyer or seller has a shipping or registered address in another country, eBay may take a small percentage. These vary by country and are usually between 1 and 3 percent.
Currency Conversion
EBay may charge sellers additional fees for converting funds to create listings in different countries. For U.S. sellers, seller currency conversion rate is currently 3 percent.
Dispute Fees
Dispute fees are associated with costs incurred from disputes regarding purchases. If you are deemed responsible, a $20 dispute fee will be charged to you. However, this fee will be waived if you are not found responsible.
How to Reduce Your eBay Selling Fees
Fees are a normal part of running an eBay site. But you may reduce some expenses with careful planning. Here are some ideas.
Calculate Fees Before Listing
For certain items, it can be beneficial to pay a higher upfront cost for listing. In contrast, for other items, the final value fees may result in lower overall costs. Sellers with high volume may find that opting for a monthly account with reduced listing fees is more advantageous. Before signing up or creating listings, it’s important to calculate the total costs for each option. Alternatively, you can use a fee calculator to help inform your choices.
Use All Your Zero Insertion Fee Listings
Sellers usually get 250 listings with no insertion fees each month. Take advantage of all those opportunities by spreading out your listings instead of going above that number during certain months. If you regularly go above that number, consider a store subscription that offers more.
Become a Top Rated Seller
Top-rated sellers get discounts on certain fees. Maintain a steady presence and provide quality customer service to facilitate positive reviews.
Reduce Listing Upgrade Fees
Some upgrade fees, like promoted listings or subtitles, may be worthwhile. However, calculate their impact and only upgrade when you feel it will increase profits.
Apply for Credits
You automatically pay final value fees when an item sells. But if the buyer never actually sends payment or if they dispute the purchase, you end up without that money. EBay lets you apply for credits to repay those fees.
How to Calculate Your eBay Selling Fees
If you’re considering starting an eBay store, it’s beneficial to first estimate your potential profits by accounting for all associated costs, including eBay fees and PayPal fees. The specifics of these calculations will vary for each eBay store. There are several options for eBay fee calculators, such as those provided by Final Fee Calculator and Wise. Below are some steps to help you calculate the basic fees associated with selling on eBay.
Set item prices: eBay’s final value fees are charged as a percentage of the purchase price. So, set a price (or starting price for auction-style listings) and calculate the percentage charged in your item category.
Consider the number of items you’re listing: eBay sellers receive 250 free insertion fee listings each month. However, if you exceed that limit, it may be beneficial to invest in a monthly subscription.
Calculate Shipping: Shipping is included in item prices when calculating fees. So either build it into your prices or add shipping separately before determining final value fees.
Add sales tax: eBay sellers must collect sales tax in states where they have a physical presence. So, add your state’s sales tax rate when considering items sold within your state.
eBay Selling Fees Example
For an individual seller listing vinyl records on eBay, the final value fee for a $30 listing would come to $4.17 since that is 12.9 percent of the sale, plus $0.30. If the seller doesn’t charge extra shipping or list more than 250 products per month, this is the only fee they need to worry about.
What portion of the sale does eBay take?
EBay seller fees vary by category and type of listing. However, the percentage taken for most items is around 12.9 percent.
Does eBay automatically take fees?
Yes, most eBay seller fees are automatically deducted when you make a sale. So you do not need to calculate and make separate payments.
Is it cheaper to have a business account on eBay?
EBay business accounts typically reduce the total fees you’ll need to pay; however, they require a monthly subscription fee. This option is usually beneficial for stores that sell hundreds or thousands of products each month, but it may not be essential for casual sellers.
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This article, “Understanding eBay Fees” was first published on Small Business Trends