As an eBay seller, you’re probably not too happy with the marketplace’s recent fee adjustments. eBay has increased its listing upgrade fees, made changes to the final value fees, and has begun hitting under-performing sellers with penalty fees over the last three years. Even so, eBay is still the third-most preferred online marketplace for U.S. sellers. In a survey by EcommerceBytes, sellers ranked eBay as the top ecommerce site for profitability. eBay and its fees may be unavoidable, but there are a number of ways you can lower your fees on the marketplace to boost your profits.
1. Study eBay’s fee structure
Before you can lower your eBay fees, you need to understand the landscape of charges on the marketplace. eBay charges sellers four main types of fees.
Monthly account fee
As an eBay seller, your monthly account fee depends on the type of plan you have and whether you pay on a monthly or an annual basis. Your monthly cost is lower if you make a yearly renewal payment.
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There’s also an Enterprise plan which costs $2,999.95 per year, but this isn’t available as a monthly plan.
Insertion fee
Insertion fees (or listing fees) are applied to every eBay listing and depend on your item’s category, not its price. The standard price for insertion fee is $0.35 per listing. You must pay this fee regardless of whether your item sells.
Listing upgrade fee
Listing upgrade fees are charges for adding features to your listing — like additional images, a bold title or a subtitle. Fees typically range from $0.10 to $6.00, depending on the upgrade you choose.
While listing upgrade fees are annoying, the adjustments you make can go a long way in boosting sales.
Final value fee
eBay charges sellers a final value fee (FVF) for every sale they make. It’s a percentage of the total sale price (including the shipping fee, but excluding sales tax). Final value fees vary depending on the category, but for most categories, it’s 12.55% of the sale price or lower plus $0.30 per order.
2. Reconsider your eBay store subscription type
Are you sure your eBay store subscription is the right fit for the amount you’re selling? You may be spending more than necessary on eBay fees, depending on your plan.
eBay offers five different store subscriptions that come with certain benefits. You can find a full list of eBay store subscriptions, prices, discounts, and benefits here.
Let’s say you have a Starter store subscription, and you’re selling items regularly and consistently. You may want to upgrade to a Basic subscription, which costs a bit more at $21.95 per month. However, this plan can also help you save money because it provides a substantial discount on your final value fees. If your store is making plenty of sales, final value fee discounts will add up.
Depending on your eBay store, you’ll have a pre-allocated amount of zero insertion fee listings per month. These range from 250 free fixed-price listings with a Starter package to 100,000 with an Enterprise store.
3. Pay for an annual subscription
Once you’ve selected the best store subscription, reduce your monthly fees by choosing an annual subscription.
Say you’re on the Basic plan and pay your account fees on a monthly basis. At the end of the year, your subscription will cost $335.40. But if you pay for an annual subscription, you will pay $263.40.
Monthly payment cost: $27.95 x 12 = $335.40
Annual payment cost: $21.95 x1 2 = $263.40
Savings: $335.40 – $263.40 = $72
That’s $72 in savings — and as a small business, every dollar counts!
4. Calculate fees and profits before listing items
Before you list an item for sale, calculate the fees and determine your profit. After all, it takes just as much time to list a $100 item for sale on eBay as it does a $10 item.
Use an eBay fee calculator to determine which items are worth your time to sell. This tool lets you plug in your item’s details and listing type to estimate your profits.
This calculator is also helpful for determining pricing that will bring in your ideal minimum profit.
5. Choose your optional listing upgrades wisely
It’s natural to think boosting your listings is a sure way to make money, but remember — these upgrades come at a cost. Choose your listing improvements wisely, so you don’t incur unnecessary listing upgrade fees.
For example, you may want to pay $6 to make your listing titles bold. But for a safe ROI, you may only make this upgrade for a trending item instead of products with little to no demand.
6. Claim Non-Paying Auction Insertion Credits
If you list your products auction-style and your highest bidder doesn’t pay for their item, you’ll still be charged the insertion fee. The bad news is the insertion fee is not refundable. The good news is you can avoid paying a second insertion fee when you relist the item if you do so within 90 days of the original listing end date. To avoid this second fee, don’t change any item details and keep the starting price the same or lower than the initial listing.
7. Request final value fee credits
eBay charges final value fees whether sales are completed or not, but that doesn’t mean you always have to pay them. Sellers are eligible for final value fee refunds in the following circumstances:
- The buyer doesn’t pay, and you report the unpaid item to eBay
- You and the buyer agree to cancel the transaction
- A full refund is issued for a returned or missing item
- You’re an eBay-managed payments seller and issue a voluntary refund during a payment dispute
If you’re eligible for a final value fee credit, you have varying amounts of time to make the request, depending upon your situation.
- When a buyer doesn’t pay for an item, you have 32 days to report the unpaid item
- If the buyer doesn’t pay or respond within four days, you’ll receive a credit on the fifth day
- For a mutually agreed upon cancellation within 30 days of the sale, you’ll receive a credit once the buyer is refunded
- If you issue a refund to the buyer for a returned or missing item, you’ll receive a final value fee credit, which will appear on your next invoice
8. Become a top-rated seller
Top-rated sellers receive a 10% discount on final value fees — and these savings can really add up. For example, if you average $1,000 in final value fees each month, being a top-rated seller could save you $1,200 a year.
To become a top-rated eBay seller, users must:
- Be an eBay member for at least 90 days
- Have at least 100 transactions and $1,000 in U.S. sales within the past year
- Comply with eBay’s selling practices policy
- Meet eBay’s requirements for transaction defect rate, cases closed without seller resolution and late shipment rate
Another benefit of being a top-rated eBay seller? You don’t have to worry about eBay’s penalty fees for under-performing sellers.
Maximize your eBay profits by rethinking your fees
It can be easy to fall into the habit of simply listing and relisting items on eBay without re-evaluating the profitability of final sales. By assessing your profits on a regular basis, you’ll be able to easily identify ways to minimize your eBay fees and maximize your profits.
Looking to increase your eBay profits even further? Check out these tips from crazily-successful sellers.