Understanding eBay Fees
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.
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. But the following offer more powerful selling features for businesses. Here are the options.
Starter: This is the most basic store subscription. It costs $7.95 monthly, or $4.95 per month if you sign up for an annual subscription.
Basic: Basic accounts are similar to starters, but they come with fewer insertion fees. This account costs $27.95 per month, or $21.95 each month on 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 product. This option is only available as an annual plan, which costs $2,999.95.
Listing Insertion Fees
An insertion fee is the initial amount a seller pays when listing a product. EBay sellers get up to 250 free product listings per month, or more if you have an eBay store subscription. So this listing fee only comes into play once you’ve surpassed your allotted amount. The current eBay insertion fee is $0.35 per listing, per category, regardless of the final or reserve price. So you will pay it twice if you want your item to show up in multiple categories. It is also 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. And the exact cost varies depending on the price of the item and 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 also pay one final value fee when an item sells. It is a percentage of the total sale of a fixed price listing or auction item, plus $0.30 per order. This also takes into account third-party payment processing fees. So you don’t have to pay PayPal fees or additional fees in addition to 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. But that includes more than just the 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 gets your products featured higher in search results. It’s available to Top Rated and Above Standard shops. So you must list items regularly and have positive ratings to access this feature. It’s taken as a percentage of sales that come from promoted listings. And you can choose the ad rate that works for 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.
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.
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.
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 cover costs related to disputes over purchases. If you’re found responsible, you’ll be charged a $20 dispute fee. This fee is waived if you’re 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 some items, it makes sense to pay more upfront to list them. For others, final value fees end up costing less. Those who sell a lot may even benefit from paying more for a monthly account with fewer listing fees. Calculate how much you’d pay for each route before signing up or listing. Or use a fee calculator to make decisions.
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. But calculate their impact and only upgrade when you feel it will lead to increased 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 plan to start an eBay store, it helps to first calculate how much profit you can earn based on what all the fees may cost. Include all eBay and PayPal fees in your calculations. This will look different to every eBay store. But there are eBay fee calculator options, including those from Final Fee Calculator and Wise. Here are some steps to help you calculate the basic fees of selling on eBay.
Set item prices: eBay 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.
Look at number of items: eBay sellers get 250 free insertion fee listings per month. But if you list more than that, it may be worth paying for 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 you 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 generally lower the amount of fees you’re responsible for, but you do pay a monthly price instead. This is generally worthwhile for stores that sell hundreds or thousands of products monthly, but may not be necessary for casual sellers.
This article, “Understanding eBay Fees” was first published on Small Business Trends