Even though the basics of selling on eBay are fairly simple, many people find the seller fees hard to understand and as a consequence feel that eBay is too hard for them to get started. The eBay seller fees can be confusing because there appear to be so many, each fee having it own way of being calculated. However, the seller fees are not as hard as they may seem at first, and for newcomers there are really just two fees that are essential to understand. The good news is that those fees are really easy. The two fees are the Insertion Fee and Final Value Fee, and it is comforting to know that once you master those, the other fees are also easy to understand.
Whenever you list an auction, eBay charges certain fees based on fee schedules that apply depending on the type of auction you are running. Now, I know that may sound a little complicated, but don’t worry. Basically, eBay charges an Insertion fee, and when your item sells, eBay also charges a Final Value fee. No matter what auction category you list in, you will always have Insertion and Final Value fees, but the only auction category we are concerned with is the basic Auction Style format. Yes, the fees are different for each category. EBay has a category for Fixed Price Auction format, eBay Motors, Business and Industrial Equipment, Classified Ads, Real Estate, and eBay Stores. But the only category that most beginners need to be concerned with is the basic Auction Style format. It isn’t necessary or even beneficial to cram all of this information at once. The important thing is to master the basic Auction format first.
In eBay, there are a number of different kinds of auctions that you can set up. The different kinds of auctions have their own requirements, but everything begins with the basic Auction Format Style. This is the kind of auction that we all think of when we think of an auction. There is a starting bid followed by bidding of all interested buyers, and the person with the highest bid wins. That is the essence of the basic Auction Style format. For this kind of auction, your Insertion fee is $0.00 for the first one hundred auctions you run in a month if your starting bid is between .$0.01 and $0.99. If you run more than 100 auctions in 30 days, then the insertion fee advances to $0.10 for every auction above 100. When your starting bid is between $1.00 and $9.99, the fee is $.25 and so on until you reach the maximum Insertion fee of $2.00 when the starting bid is $200 or more. Although you have to pay an Insertion fee whether your item sells or not, if you item does not sell and your immediately relist your item, then eBay credits back the Insertion fee for the first auction. In other words, if your item does not sell, you pay no Insertion fee on the first auction if you relist the item.
The other essential fee to understand is the Final Value Fee. This can also be confusing, but we can get around it. Keep in mind that if your item does not sell, the FV is zero. FV fees are a percentage of the dollar amount of the winning bid. Thus, if there are no bids, the FV is $0.00. Otherwise, you pay 9 percent of the final cost up to a maximum of $50. To put this in the form of an equation, FV = .09 x final cost or $50, whichever is the least amount. You sell an item for $20, then your FV will .09 x 20.00 or $1.80. If your item sell for $100, then your FV is .09 x $100 = $9. If your item sells for $2000, then your FV is $50, because the maximum FV is $50, and 9% of $2000 is $180, so we take the smaller amount of $50. Although Final Value fees are different for each auction category, once you master the fees for the basic Auction Style format, figuring out the fees for the other categories will make much more sense.
There are two other kinds of fees that I think are important to understand. The first is Buy It Now (BIN). This is the fee eBay charges if you want to give the buyer an option to purchase immediately at a flat, set price before any bids have been placed. This encourages your auction viewers to buy immediately rather than take the chance that bids will drive the price up. For example, let’s say you want to auction off a radio. You set the starting bid at $25 and set a Buy It Now price of $35. This gives a buyer the opportunity of buying your radio for $35 before any bids have placed. As soon as the first bid is offered, the BIN is deactivated. For auctions with starting bids between 99 cents and $9.99, the BIN is 5 cents. The maximum BIN is .25 for bids starting at $50 or more.
The last fee I want to mention is the Listing Upgrade fee. You can see the full schedule of Listing Upgrade fees at the eBay page, pages.ebay.com/help/sell/fees.html#upgrade. In my opinion, the essential fees to be aware of are for Subtitle and Bold. The Subtitle fee allows you to add an additional subtitle to your auction listing to give additional information; the Bold fee allows you to list your auction in Bold face type. I feel that these two are most important to mention because veteran sellers report that they make the difference between a successful auction and an unsuccessful auction. Again, these fees are optional but important even for a newbie to pay attention to.
Even though all of the eBay seller fee information is given on eBay itself, it is not always clear how to find it, and with so much information about so many fees and calculations anyone can find their head spinning. Just remember that we need to begin with the Auction Format and that everything begins with understanding the Insertion and Final Value fees discussed above. Even if you want to sell automobiles or Real Estate, your understanding of those formats will hinge on your clear understanding of the basic fees for the basic Auction Format. Once you get the basics, the more advanced features will be easy to grasp.
Resources
www.proproductsourcing.com
eBay.com
