One of the first things a new eBayer discovers about running auctions is that there are many different seller fees. This realization is often met with the confusion of trying to understand them and process of calculating the fees accurately. While there are a lot of different fees, they really are not that hard to grasp and calculating the basic fees is really fairly simple. Even though all of the information is there on eBay, it is easy to get lost following all of the links. As a beginner, the two essential fees you must understand are Insertion and Final Value fees, and I’ll show just how easy those and some of the other important fees are to understand.
As hinted above, once you understand Insertion and Final Value, everything else will begin to make much more sense. Insertion fees are what eBay charges you to list your auction and Final Value fees are how much eBay charges when your item sells. Both Insertion and Final Value fees are different depending on the category of your auction. The different kinds of categories include, Auction Style format (this is the category that concerns you if you are a beginner), Fixed Price format, eBay Motors, eBay Stores, Business and Industrial Equipment, Real Estate and Classified Ads. If you try to take this in all at once it can be a mind bender. However, most newbies only need to think about the Auction Style format.
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 begin 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 = .9 x final cost or $50, whichever is the least amount. You sell an item for $20, then your FV will .9 x 20.00 or $1.80. If your item sell for $100, then your FV is .9 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.
Buy It Now (BIN) are also important to understand. The BIN is the fee you pay eBay to let you offer buyers an optional purchase price before the first bid is placed. For example, you are auctioning a pair of leather boots with a starting bid of $50, but you have a BIN of $60. This allows anyone viewing your auction to purchase the boots immediately for $60 before any bids have been placed. Should anyone place a bid, the BIN disappears. If your starting bid is $0.99 to $9.99, the BIN is .05. For $10 – $24.99, the BIN is $0.10. For items $25 to $49.99, the BIN equals $.20. For starting bids $50 or more, the BIN is $.25.
In my opinion, the Listing Upgrade fees are also important for a beginner to know about. You can find the full price schedule at pages.ebay.com/help/sell/fees.html#upgrade. The most important upgrades I think you should know about are Bold face type and Subtitle. Bold face type allows your auction title to appear in Bold. Subtitle gives you an additional subtitle to add more information to your listing. These are probably the most important of the upgrade features and make the most difference in terms of catching the attention of a potential buyer. Again, these are optional fees, but I feel you should know about them because of their importance to the overall chances of your auction’s success.
There is no denying that the number of kinds of auctions and the different fees and ways of calculating the fees can be confusing. For the new eBayer, it is important to master the basic fees for the Auction Style Format that we have discussed in the paragraphs above. I I know that many of you may want to sell cars, business equipment or even Real Estate, but before you plunge into the more complicated forms of selling, give yourself a solid foundation in the fundamentals. Once you have that all of the fees and other eBay features will fall neatly into place.
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