eBay is a great platform to make money. But, as the old saying goes, you have to spend money to make money. There are some fees and costs associated with selling on eBay which will affect your profitability. Calculating how much it costs to sell on eBay is crucial to your success as a seller. Unexpected fees can derail your profits and end your eBay business before you even get started.
The buyer does not shoulder the burden for eBay fees, which means as the seller, these costs rest on your shoulders. There are plenty of costs to consider when selling on eBay, including listing fees, payment processing fees, and shipping costs. Keep reading for a breakdown of the costs associated with selling on eBay to maximize your profits.
How much does eBay charge?
Like any other platform, eBay makes money when items are sold on their site. It stands to reason that they charge a fee for listing items and selling them. Unfortunately, these fees are the responsibility of the seller alone. The buyer is only responsible for the purchase price and shipping cost for the item.
eBay charges a fee for listing items and a fee based on the final value of the item once it is sold. There are also additional fees if you choose to upgrade your listings or select a store subscription.
Listing fees, also known as insertion fees, are the costs associated with listing your products on eBay. These fees are charged per item and per category. They also depend on the type of eBay store you have because you receive a certain number of listings for free.
- If you do not have an eBay store, you have 50 fixed price or auction-style listings for free each month.
- If you have a Basic store, you have 250 fixed price listings and 250 auction-style listings for free each month.
- If you have a Premium store, you have 1,000 fixed price listings and 500 auction-style listings for free each month.
- If you have an Anchor store, you have 10,000 fixed price listings and 1,000 auction-style listings for free each month.
Insertion fees differ by product category. Once you reach your limit of free listings, you will incur a small fee, usually $0.35 per listing. When calculating your cost of selling on eBay, be sure you consider how many items you will be listing each month to accurately determine your costs.
eBay charges listing fees based on the number of listings and category.
Final Value Fee
The final value of your listing is calculated by adding the listing cost and the shipping and handling fees. Sales tax is not part of the final value, but shipping does factor into the total. eBay takes a cut of your final value, which serves as a commission for brokering the deal between buyers and sellers.
The final value fee is based on a few factors, including:
- Auction vs. fixed-price listings
- Final selling price
- Store subscription
- Your seller rating
Obviously, the fees are higher for higher-priced listings. It may seem like you are making a great profit off a listing, but you can receive an unwelcomed surprise if you fail to calculate the final value fee ahead of time. See the chart below to determine the percentage eBay will charge for your fixed-price final value fee.
Original chart source: Dummies.com
For auctions, eBay takes 9% of the selling price, up to $50. Final value fees for auctioned items are much easier to calculate. If you are an eBay store subscriber, your fees will be significantly less. We will cover these differences in a moment.
It is extremely important to maintain your seller rating because it can directly impact the final value fee. For US sellers with a seller rating below standard, eBay charges an additional 4% on the final value fee of each transaction. Follow best practices for selling on eBay to keep your seller rating high.
Store Subscription Fees
Fees for selling on eBay will differ if you are an eBay store owner with a subscription. There are five plans for eBay store subscriptions, starting at $4.95 per month. Store owners receive a variety of benefits to offset the monthly or annual cost of the subscription, including free listings and reduced final value fees.
For example, if you pay $21.95 per month with a 1-year Basic store subscription, you have an increased number of fixed-price and auction listings. You also have a lower cost for additional fixed-price listings and a cap of $350 on maximum final listing fees. You can view all of the benefits and discounts of store subscriptions on the chart below.
View more information on store subscriptions here
Advanced Listing Fees
You can upgrade your listings to help them stand out on eBay, but you will have to pay some additional fees. These charges are on a per-listing basis, and you have to pay the fee whether your item sells or not. Your listing’s price, format, and duration all affect the cost of advanced listing fees.
Prices of advanced listing upgrades for 30-day durations. View the price breakdown here
While some of these features may be worth the additional fee, you can skip many of them by optimizing your listings. For example, listing your items in two categories is not always an advantage. Categories should be chosen strategically to ensure customers can find your listings easily. Also, subtitles do not actually appear in basic searches, making them largely irrelevant.
However, adding the Gallery Plus feature may be worth the investment. This feature allows buyers to click a small magnifying glass icon to view your product images within eBay search results. They can view your products without clicking into the listing and get a sense for your product more quickly. On the other hand, the icon is quite small and may go unnoticed. Test this feature for yourself to determine if it is worth the cost.
Example of the Gallery Plus feature in eBay search results.
It can be difficult to factor in all of the costs associated with selling on eBay. The fees vary by product, category, price, and several other factors. Thankfully, there are a few third-party options for eBay fee calculators available online.
Calculate your costs
In addition to eBay’s fees, you have to consider the costs you incur while selling items. All businesses have operational costs that impact your overall profitability. If you are spending too much money upfront, you may not be able to make enough of a profit to cover your costs. Before you dive into selling on eBay, be sure to calculate your costs.
Some costs to consider include the following:
- Your costs of living or your salary
- Cost of purchasing your items
- Cost of shipping (packaging materials, tape, boxes, etc.)
- Inventory cost (how much it costs to hold on to unsold items)
- Office space costs
- Technology costs (computers, smartphones, etc.)
- Phone and internet costs
The operational costs will differ for every business. Essentially, you are factoring in all of the fees and costs for getting your items on eBay and then shipping them to your customers. Plan ahead to incorporate these costs into your listing price so you can offset any additional fees.
Watch this video for more information on setting goals and developing a bookkeeping plan for eBay:
The final set of fees you need to consider when selling on eBay is the cost associated with promoting your listings. There are a variety of ways to promote your eBay listings through eBay or social media platforms. While paying to promote your listings can provide a return on investment, you should plan ahead in order to optimize your costs.
Promoted Listings on eBay
According to eBay, paying for promoted listings can boost visibility by up to 36%. With more shoppers seeing your listings, you have a better chance of making a sale. Promoted listings are also a great option because you do not pay until someone clicks on your listing and purchases the promoted item. You also have access to considerable analytics to monitor the success of your promoted listing.
Watch this quick video to learn more about optimizing your promoted listings on eBay:
Social Media Ads
As I discussed last week in my post about using social media to make money on eBay, Facebook and Instagram are two other platforms for paid promotions. You can purchase social media ads to boost visibility of your listings and drive traffic to your eBay store. These social media channels also offer analytics and reporting to track your advertisements and optimize your ads through testing.
Ads on Facebook and Instagram enable you to show off your product from all angles. You can upload high-quality product photos and videos to show up in the news feed of your target audience. Set your daily budget and then monitor how many views and clicks your ads get each day.
Learn more about Facebook ads here: https://www.facebook.com/business/ads
Selling on eBay can be very profitable for sellers who plan ahead. Factoring in the costs associated with eBay fees, operations, and paid promotions can help you maximize your profits and make the most out of your listings. The more you practice calculating the costs of selling on eBay, the better you will get at it. Soon, handling these calculations will become second nature for successful sellers!