I started selling on eBay earlier in the year, and I’ve been a fan so far. I have to say that I was somewhat surprised at all the fees associated with such selling though. These fees can cut heavily into the profits I’m able to generate from my sales and really add up depending on a variety of factors.
While these fees haven’t been enough to turn me off my selling endeavors thus far, they have certainly been a wakeup call as to just how expensive selling online can get, how such fees can affect my bottom line, and how important it is to takes these fees into consideration when pricing products.
Listing fees
There are all sorts of little fees that can add up over time when it comes to listing items on eBay. Listing fees, costs for extra descriptions or special photos or titles, fees related to the type of product being listed, length of time an item is listed, whether a reserve price is set, and a litany of other tiny – and sometimes not so tiny – fees might not seem like much on just one or two items, but they can take a big bite out of profit margins and add up to hundreds or even thousands of dollars over time.
Thankfully, eBay provides a total listing cost before officially listing an item at which point you can see just how much the listing will cost you and make adjustments if necessary to lower the price. EBay also often offers a certain number of free listings to members and tends to run regular promotions in which listing fees are temporarily reduced or waived completely for certain types of listings.
Seller commission
Then of course, once an item sells, a commission must be paid to eBay based upon the final sale price of the item. This fee can range in amount depending upon the status of the seller. Sellers may be able to decrease the amount of these fees by meeting certain guidelines and standards related to shipping and handling times, sale amounts, and feedback from other eBay users.
Shipping costs
The costs related to shipping can add up in a hurry when selling on eBay. Especially if you’re providing free or discounted shipping, these expenses can put a big dent in overall profits. And even if you’re not shipping overnight delivery or with any large or bulky products, you can likely expect to pay a couple dollars even for smaller packages. The site provides a shipping calculator to help determine such costs before you ship an item.
PayPal fees
I guess it was naïve of me to assume that since PayPal is owned by eBay, and eBay tends to push their customers to use this service, that there weren’t fees involved. Therefore, I was caught somewhat by surprise when I realized that I was being charged 2.9 percent of each sale transaction, plus 30 cents by PayPal as their sale fee.
While it doesn’t sound like a lot, it’s just another fee on top of all the others that takes a little bit more out of any profit I make by selling online.
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Disclaimer:
The author is not a licensed financial or sales professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.
