How to Beat eBay Seller Fees for Maximum Profit
Paying fees is an unavoidable part of doing business on eBay, and there are plenty of fees that can stack up each month. In addition to the basic insertion fees—applied if you exceed a preset number of listings each month—and final value fees on sales and shipping that all sellers are subjected to, there are fees for optional listing upgrades, promoted listings, and fees for failing to meet standards as a seller. There are things specific steps sellers can take to help lower their fees, including setting up an eBay store.
Store Subscription Options
For higher volume sellers—those actively buying and reselling items as a business, as opposed to occasional sellers offering pre-owned personal items—can instantly save themselves some money by signing up for a store subscription. Sellers without a subscription receive just 50 zero-insertion fee listings per month for fixed-price and auction items. When that number is exceeded, the seller is charged $.35 for each additional item listed.
Sellers who have a Starter store subscription, meanwhile, get 100 zero-insertion fee listings and pay $.30 for additional items once that allotment is met and get even lower fees with Basic, Premium, Anchor, or Enterprise subscriptions. It’s also important to note that when the monthly allotment is exceeded, the seller is charged for additional items listed, and that includes Good ‘Til Canceled listings, which automatically renew every 30 days and count toward the monthly allotment. If you’re already at your limit and do not actively end your listings, you’ll be charged that additional fee automatically.
Standard final value fees, the amount that is due when an item sells, are also lower for sellers with a store subscription (4%-9.15% compared to 10% for non-store subscribers). You can also save money if you commit to an annual subscription as opposed to paying month-to-month. For instance, if you opt for an annual subscription for a starter store ($4.95/$59.40) rather than monthly ($7.95/$95.40), you’ll save $36 just on the subscription fee alone. Store subscription fees are charged one month in advance. So when a seller signs up for a store, they will pay two months’ worth of subscription charges, which are detailed below.
- Starter Store: $4.95 (annually) $7.95 (per month), 100 free listings, 30 cents for each listing thereafter
- Basic Store: $21.95 (annually) $27.95 (per month), 250 free listings, 25 cents for each fixed-price listing thereafter
- Premium Store: $59.95 (annually) $74.95 (per month), 1,000 free listings, 10 cents for each fixed-price listing thereafter
- Anchor Store: $299.95 (annually) $349.95 (per month), 10,000 free listings, 5 cents for each fixed-price listing thereafter
- Enterprise Store: $2,999.95 annually, 100,000 free listings, 5 cents for each fixed-price listing thereafter
Saving Even More on Fees By Being a Top-Rated Seller
Sellers can also shave off additional fees by becoming a top-rated seller. Becoming a top-rated seller requires being a member or eBay for at least 90 days, meeting seller standards, which includes not having any return issues for items that aren’t as described or unresolved return issues, and completing at least 100 transactions and generating more than $1,000 in sales. Sellers who meet that criteria are eligible to receive a 10% discount on the final value fees.
Keeping An Eye on Listing Upgrades
Another way to fees add up is with optional upgrades, listing enhancements like making headlines bold, adding a subtitle, or highlighting the listings, individual upgrades that eBay claims will help make items sell better. You can also pay to promote your listing, so it comes up higher in buyer searches.
In many instances, the listing upgrades simply aren't worth the money. They can cost up to $4 per listing, so test them out on a few listings first, then make your own decision. Also, be aware that sometimes eBay slips in an "enlarge gallery photo" option for $1 on listings.
To avoid these fees, always check the bottom of the page for your total fees before submitting a listing. Make sure it says zero, 20 cents, or whatever is correct for your store subscription level. If you hit submit and eBay has snuck in an upgrade, you still have to pay it.
Start With the Profit Calculator
Before you buy an item for resale, or list something lying around the house, make sure it is going to be profitable and worth your time. The best strategy is to shoot for a specific dollar amount of profit per item. It takes the same amount of time to list a $5 item as it does a $50 item, so concentrate on selling higher dollar items to earn the maximum amount of money per hour possible.
Some sellers adhere to the "three times rule," which means items should sell for 3 times what you paid for them. This rule isn't practical if you paid only 50 cents for an item. This rule also comes from the regular retail world where margins, market conditions, and everything else is different from eBay.
A great free tool to use for figuring out profit is the New Life Auctions eBay and Paypal Calculator. Simply fill out the price you paid for the item, your desired selling price, the listing format (auction, fixed price, or store), shipping fees charged to the customer, and the calculator will show your profit per item. There also are apps for eBay profit calculating you can use on your phone, and most are free.
To grow your eBay business, set a minimum profit goal for each item. For example, if your desired profit is $10 per item, and you sell 50 items a month, your total profit would be $500. Increase that minimum profit to $20 per item, and your total profit grows to $1,000 a month. Be sure you are selling profitable items and not just keeping yourself busy with listing and shipping. If you aren't sure your business is profitable, a spreadsheet can help.