Understanding eBay Seller Fees

Before we get into the discussion of selling old vintage antiques on ebay or all your spare electronics items, let's look at how eBay makes its money. When you sell on eBay, it's imperative to understand the various seller fees you'll incur from them, as well as Paypal's fees for receiving money online. Listing your item too fast may result in really piling up the charges, and taking away from your final profit on a sale. Here's a quick rundown of what fees you should expect and plan for as an eBay seller.

Insertion Fee:
This is the basic fee you're charged just for listing an item auction on eBay. They can range anywhere from 5 cents to $4.00. They depend on the starting price for auction. For examples:

$0.01 to $0.99 has an Insertion fee of $.15 for most items*
$1.00 to $9.99 has an Insertion fee of $0.35 for most items*
$10.00 to $24.99 has an Insertion fee of $0.55 for most items*
$25.00 to $49.99 has an Insertion fee of $1.00 for ALL items
$50.00 to $199.99 has an Insertion fee of $2.00 for ALL items
$200.00 to $499.99 has an Insertion fee of $3.00 for ALL items
$499.99 and up has an Insertion fee of $4.00 for ALL items

* The insertion fee for Books, Music, Movies, Video Games and DVD's is slightly less for items in the first 3 ranges listed above.

* Business and Industrial Capital Equipment has an Insertion fee of $20.00 (includes Tractors, farm machinery, heavy equipment, trailers, fork lifts, concession trailers, etc.)

So with the eBay insertion fee you really need to set your starting price wisely. Obviously in a lot of situations, a 10 cent difference isn't a huge deal, but it all cuts into the final profit. Many people believe in starting hot items at 99 cents, but be careful with this method. If you misspell a word on your auction title, or your item doesn't get the attention you expected, you may end up selling something great, really cheap!

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Buy it Now Fee:
Buy it Now allows you to set a price at which anyone can come along and purchase your item at that moment. To set a Buy it Now, you incur a fee, usually $0.05 to $0.25 cents depending on the price you set.

Reserve Price Fee:
A reserve price is a minimum price you want your item to sell for. Example, you have an old baseball card worth $200 and decide you need at least $100 for it. Setting your auction with this "Reserve price" will cost you. If you set a reserve price for your auction between $0.01 and $199.99 it will run you $2.00. Imagine paying $2.00 and setting your reserve price incorrectly at $1? If your reserve price is $200 or more, the fee is 1% of the reserve price, up to $50 charged. You can see how these fees can cost you...

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Extra Auction Fees:
eBay allows you to add all sorts of nice bells and whistles to your auction listings..for a fee of course. These are the eBay image upload fees and the Auction upgrade fees. Examples are o the "Auction upgrade" are selecting borders, layout graphics to spice up the listing, bold headings, sub-headings, listing in 2 categories, etc. Use these all sparingly and wisely, because they do add up and take away from your profits on a sale. A great way to save on eBay's Picture upload fees, just join a free photo site such as Photobucket.com, and host your extra item images there. Photobucket provides you with direct HTML code you can stick into the HTML editor for your listings on eBay. You can even stick a slideshow into your auction to really jazz it up! (Note: consider the page load on eBay auctions, in the minor case of dialup users)

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Final Value Fee:
This is the fee eBay takes from you based on the final sale of your item. Final Value fees use a calculated amount to determine eBay's commission on your sale. These depend on the final selling price. If your item sells for $25 or under, you incur a fee of 8.75% of the fianl price. If your item sells for $25.01 to $1000.00, it's of the initial $25.00 ($2.19), plus 3.50% of the remaining closing value balance ($25.01 to $1,000.00). And if the item sells for over $1,000 it's another interesting calculation of percentages which gives eBay a nice tidy commission of your sale.

Keep in mind, if a Buyer DOES NOT pay you after a set period of time, you can dispute them as a non-paying Buyer on eBay. The dispute will allow you to inform eBay that the Buyer was a non-payer, and it allows you to refund your Final Value Fee on the sale. Read more about that here.

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Paypal Fee:
When you sell your item, if you use Paypal to receive the Buyer's money, Paypal takes a cut. It ranges based on how much money you've made plus $0.30 cents. An example is a recent Bose radio that sold for close to $300, and Paypal took about $10 for their "share" of the action. It's how they stay in business, so don't forget this fee will be taken out once you're payed for an item. Unlike eBay, Paypal automatically detects this fee, so don't worry about having to go in and pay it. But consider the fact that if you sell a free coupon for just $0.99 cents with no shipping, you're not making much profit on that "Freebie".

Read more about Paypal fees at Paypal.com

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That covers the fees you should expect from eBay for listing auctions, improving the auctions, setting Buy it Now or Reserve price, finalizing a sale of an item, and receiving the money through Paypal. The eBay fees will acrrue in your Sellers Account at eBay. If you leave the fees unpaid, often eBay can threaten to, and will, suspend your account until they are resolved.

All of the above fees can add up, so you'll really need to price your items appropriately and do your homework on them. In Part 1 of the Monetizer's "Selling on eBay" series, I'll discuss the aspects of successful selling campaigns!

Stay tuned for more posts on how to make money selling on eBay!

Read more about eBay fees from the online auction site itself! - The Monetizer recommends printing out a copy to keep as a handy reference!

Also check out this eBay auction for a Jay Leno cornflake..people sell anything don't they??

Also you may want to check out this cool image The Monetizer uncovered on Flickr, called Blogopoly. It's a great take on the board game Monopoly, only for Bloggers!