If you’re not yet an eBay trader, the eBay business model can seem confusing. If the trade on eBay is between buyers and sellers, how does eBay itself make money? There must be a catch somewhere!
It’s a common misconception that trading on eBay involves complicated surcharges or membership fees that make eBay trading a worse deal than its members think they’re getting. That's not the case at all. Let's break it down.
eBay Costs for Prospective Shoppers/Buyers
If you want to shop and buy things on eBay, eBay charges you nothing.
There are no hidden charges, though you should make sure to take note of the shipping and handling charges stated in a listing when you’re deciding whether to buy. There is no monthly fee to be a buyer on eBay. There are no subscription costs, costs to join or any other hidden costs. eBay will not charge your credit card unbeknownst to you.
So how does eBay make money? The answer is simple: eBay charges members when they sell on eBay. The specifics of how this happens are also simpler and less costly than many imagine.
eBay Costs for Prospective Sellers
If you’re thinking about selling on eBay, there are no up-front fees to start selling. Anyone can do it, and the fees are clearly published. Here’s how sellers pay eBay.
Every time you post an item for sale, eBay will charge you what is called an insertion fee. The fee involved depends on the price (or minimum starting bid) that you set for the item you’re selling. The higher your asking price, the higher the insertion fee, which is taken from eBay’s fees table. When you post an item for sale, you’ll be charged the insertion fee whether or not your item is sold, similar to when you pay for a classified listing in a newspaper.
As you place an item for sale, you can tell eBay to enhance your listing by adding various marketing features, things like more and bigger photos, a highlighted or bolded listing that makes yours stand out from the crowd, and so on. These enhancements will also cost extra.
And if your item sells, eBay will charge you a small cut of its sale price, called a final value fee, calculated as a percentage of what the buyer paid you for it.
How eBay Gets Paid
So if you’re just a shopper on eBay, you’ll never pay anything directly to eBay. If you’re a seller, you’ll be responsible for the fees mentioned above for any listings you post. You won’t, however, be “billed” in the mail or have to log in and “make payments” on a schedule. Instead, eBay simply keeps a running total of the fees you’ve incurred during the month, and will automatically debit this total from the credit or debit card you placed on file when you joined.
If you don’t post anything for sale during a given month, eBay won’t charge you anything for that month. You are only billed/charged when you post an item(s) for sale and incur the fees described above. You can maintain an eBay membership for weeks, months, even years without paying eBay any money whatsoever, as you will only pay eBay each time you post an item for sale.