Have You Done Your Math Before You List Your Item In EBay?

Depending how you see or define eBay, it is definitely a big trading platform for buyers and sellers. It is more than a flea market as brand new goods are being sold as well. Whether you want to make it big in eBay or you just want to get rid of your old stuffs, there is always a place for you.

If your intention is just to get rid of your old stuffs and your motive is not to make a living out of it, then the various administrative fees associated with it may not be a big concern to you. However, it is good for you to know what these administration fees are so that you will not get a rude shock when you receive your final payment at the end of the transaction.

However, if you are a serious seller, the various administrative fees will be a big concern to you. This is because, even though you did not make a sale after listing, you will still need to pay the listing fees. Depending on your pricing strategy, the listing fees vary. It can really add up. If you just list a few items, the total listing fees might not be substantial, but if you list a lot of items, the listing fees many be huge. Remember, you have to pay the listing fees irregardless of whether you have made a sale.

The important administrative fees that you need to take note are the listing fees (there are various types), eBay final value fees and Paypal commission (assuming that you are using Paypal). You will have to pay all these fees as they are compulsory and you cannot get away with it. Therefore, it is important that you take these fees into consideration before you list your item. This is because, these fees will reduce your profit margin (cash at hand after shipping and handling and administration fees). Let us look at the two fees that you have to pay to eBay.

Firstly, it is the listing fees. EBay charge $0.3 for items that have bidding price start at $0.01 to $0.99 range. It charges $4.8 for items that having a bidding price starting at $500 and upwards. There are other fees you may incurred if you choose to have enhanced features such as, But It Now (BIN), highlighting texts, featured product, gallery, bolding, gift icon, and others. We shall not discuss those additional fees here.

The second component to watch out for is the percentage eBay will deduct from your final value fees. Currently, the deduction is set at 5.25% of the first $25, 2.75% of the next $975, and 1.5% of the amount over $1,000.

The third component to consider is the commission determined by Paypal assuming that your payment is via Paypal. You will need to consider Paypal as one of the payment option as this is one of the most convenience ways of payment. The payment is immediate and you can see the money coming into your account as soon as the winner pays you through Paypal.

Let say you have managed to sell a camera staring at $0.5 and sells for $500. You will need to pay the following,

Listing fee: $0.3
Final Value Fee: $25 x 5.25% + $475 x 2.75% = $14.37

Therefore, your net profit is $485.63.

As you can see, the administrative fees have taken up 2.87% of your final selling price. So, do you still make money with $485.63. I do not know. It depends on your cost price.

Whatever case may be, the administrative fees cannot be taken lightly as they play a major part in your overall pricing strategy. If bottom line is your ultimate concern, then you will have to take this seriously. Do you math first before you list your item. The administrative fees can really eat into your profit margin. If you are new to eBay and you want to sell your stuffs at eBay, you will need to study into all these administrative charges carefully and thoroughly. After all, it is not free to sell on eBay. More information on eBay can be found at eBay Summary.

(Note: Figures of Listing fees and final value fees percentage are taken from 'eBay Strategies' by Scot Wingo. Prentice Hall 2005)

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