How To Save on eBay Fees for Selling

Selling on eBay is one of the best strategies for online entrepreneurs.

eBay used to be a customer-to-customer auction service, but its use case has evolved because business owners saw its potential as a platform. The site currently has over 132 million users worldwide—this is unsurprising, as eBay ensures security for buyers and sellers alike.

If there is a downside to selling on the platform, it has to be the eBay fees. Of course, all online marketplaces shave off percentages of all sales. However, experienced sellers balk at eBay’s fees because they are higher compared to other platforms.

This guide can help you save on eBay fees on your own storefront.

eBay: An introduction

eBay is an American ecommerce company founded in 1995. Iranian-American Pierre Omidyar founded the company, which is headquartered in San Jose, California.

It became a popular marketplace for unique items sold through online auctions. The ecommerce site took a cut as a commission for each successful transaction.

eBay’s user base peaked in the last quarter of 2018 at 179 million users. The popularity of other marketplaces means buyers and sellers are spoiled for choice. However, eBay is implementing new strategies to make the site more competitive. 

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Understanding eBay fees

eBay sellers must understand all imposed fees so they can optimize their item pricing. Price them too high, and you could turn off potential buyers. If it is too low, you may not generate enough profits.

So, what are the fees for? Here’s a breakdown of the different types of eBay fees for selling:

Listing fee

Insertion fees are paid to the platform so you can list items for sale. Each month, sellers get 250 items for free, so no insertion fees will be imposed on these items.

eBay subscribers get more free listings. Here is a rundown of the products that sellers can list on their storefront:

• No subscription - up to 250 free listings
• Starter store package - up to 250 free listings
• Basic store package - up to 1,000 free listings for fixed-price products, up to 250 auction-style products in some categories, and an additional 10,000 fixed-price listings in selected categories
• Premium store package - up to 10,000 free listings for fixed-price products, up to 500 auction-style products in some categories, and an additional 50,000 fixed-price listings in selected categories
• Anchor store package - up to 25,000 free listings for fixed-price products, up to 1,000 auction-style items in some categories, and an additional 75,000 fixed-priced listings in selected categories
• Enterprise store package - up to 100,000 free listings for fixed-price items, up to 2,500 auction-style products in some categories, and an additional 100,000 fixed-pricing listings in selected categories

Insertion fees are not refundable, even when your item doesn’t sell. Sellers are charged per listing, so if you list one item in two categories, you will be charged an insertion fee twice.

Relisting items will also merit an insertion fee. Listings for multiple items, such as those sold as a set, will be charged just one insertion fee.

Final value fees

eBay also charges a final value fee when an item is sold—this is the platform’s commission. This fee is a percentage of the total sale plus $0.30 per order.

The base amount is the final price of the sale after adding handling charges, shipping fees, sales tax, and other add-on fees. Further, “per order” refers to the items bought with the same shipping method.

The percentage added to the price depends on the product category. Most categories calculate the final value percentage as 13.5% of the total sale amount, up to $7,500 per item. The amount beyond $7,500 will be charged 2.35%. Don’t forget the base charge of $0.30 per order.

Books, magazines, music, and movies and TV shows are charged 14.95% with similar calculations. Coins and paper money are charged 13.25% for the sale of each item worth $7,500 or lower and 7% for sales beyond this amount.

Clothing, shoes, and accessories are charged 15% as the final value. The percentage is taken from the sale of an item worth $2,000 or less and 9% for the sale over $2,000. The percentage is the same for jewelry and watches, except the total amount is raised to $5,000.

Store subscription fees

If you have an extensive inventory, signing up for a store subscription would be more practical. The most obvious advantage is that you get an online storefront without having to create an ecommerce website from scratch. And with a subscription, you can get your store up and running the moment you pay the fee. You can begin selling almost instantly!

Another advantage is that you get thousands of free listings with a subscription. The higher the subscription tier, the more free listings you get.

Here is the list of subscription options and their monthly fees:

• Starter store - $4.95 per month
• Basic store - $21.95 per month
• Premium store - $59.95 per month
• Anchor store - $299.95 per month
• Enterprise store - $2,9995.95 per month

When you have an eBay subscription, you can custom-design your home page. You can also leverage the platform’s advanced marketing tools and support to increase the exposure of your online store.

eBay sellers can also manage stores much more easily on the Seller Hub, which has everything you need for smooth operations.

Payment processing fees

The payment processing fee is the $0.30 per order mentioned earlier. It is charged on top of the final value fee. It is for the processing of the transactions on the platform.

Strategies to reduce listing fees

Now that you understand what the fees are for, it’s time to discuss effective strategies to save money on eBay fees for selling.

Let’s start with how to reduce listing fees:

1. Take advantage of free listings

Without signing up, you can list 250 items that are free from insertion fees. If you have a large volume of products to sell, you are better off signing up for a subscription.

eBay also offers Good ‘Til Cancelled (GTC) listings that are ideal for popular products that sell out regularly. These listings renew automatically each month, so you don’t need to keep relisting them and paying fees when stock goes down to zero.

2. Choose the right listing format

Remember that there is a final value fee placed on all items, which is a percentage of their selling price. You can mitigate this by carefully choosing listing formats.

Auction-style items can sell for unpredictably high amounts, so only use it when absolutely necessary. For example, very rare items merit an auction where buyers can put in high offers. But for regular products, it’s best to sell them at fixed prices. This way, you can keep a close eye on the final value fees you will be charged.

3. Bundle similar items together

Save on insertion fees by packaging two related products and selling them as a set. A perfect example would be selling toothpaste and a toothbrush as one item or listing socks in sets of three instead of by pair.

Optimizing final value fees

Here are some ways to minimize the final value fee:

1. Upgrade store subscription

You can get lower final value fees when you sign up for an eBay subscription. Crunch the numbers to ensure your product volume justifies your subscription tier.

2. Set a competitive starting price

Setting prices for your products is not easy. Your pricing strategy must be a product of extensive calculations and deep market and competitor research.

First, you need to calculate how much it costs for you to acquire and sell the item. Next, look up similar listings to have an idea of the amount that potential buyers are willing to pay for the item. Look at your competitors on eBay and other online selling platforms. Third, calculate the final value fee for the proposed price to see if you will be able to make a healthy profit.

Adjust the prices to maximize your revenue and attract more buyers.

3. Categorize your items wisely

Final value fees also depend on product categories. Categorize your items wisely so that you can get the lowest possible fees.

Here are some categories you should know:

• Antiques
• Books
• Business and Industrial
• Clothing, Shoes, and Accessories
• Collectibles
• Computers, Tablets, and Networking
• Consumer Electronics
• Crafts
• Dolls and Bears
• Home and Garden
• Motors
• Pet Supplies
• Sporting Goods
• Sports Memorabilia, Cards, and Fan Shop
• Toys and Hobbies

Say you have a first-edition copy of a classic book. You can sell it under the Books and Magazines category with a final value fee of 14.95% on the total sale amount, up to $2,500 per item. Beyond the maximum price, the percentage goes down to just 2.35%.

But because it’s a first edition, you can also sell it under Antiques, which only charges 12.35% of the total sale amount up to $2,500 calculated per item.

4. Become a top-rated seller

Aside from the prestige, top-rated sellers may also enjoy some privileges when it comes to the final value fee. Sellers who have earned the top-rated badge can enjoy a 10% discount on standard final value fees. They are also rewarded with listing protection and increased visibility, further boosting sales and profits.

So, how does a seller become top-rated? You need to have an active eBay account for at least 90 days, with at least 100 transactions within the last year among United States buyers. Total sales must be over $1,000.

You must also pass the following criteria:

• A defect rate of 0.5% or lower
• Cases closed without resolution must be 0.3% or lower
• Late shipment rate must be 3% or lower
• 95% of transactions must be within handling time

Upgrades to top-seller are automatic once all criteria have been met.

Making the most out of your eBay subscription

You must study the terms and conditions of your subscription to maximize its benefits. There are more benefits than just free listings.

1. Assess the need for eBay subscription

Not all sellers need to pay for eBay subscriptions. It depends on your inventory volume and pricing strategy. If you sell fewer than 250 products, you can enjoy eBay’s free listings even with no subscription.

However, if you are planning to slowly scale your business and maintain hundreds of product listings soon, a subscription could provide even more benefits:

• Customizable storefront
• Increased visibility on the platform
• More affordable eBay store pricing
• Advanced selling and marketing tools
• Discounted shipping supply

2. Choose the right store level

eBay store levels are Starter, Basic, Premium, Anchor, and Enterprise. There is a huge difference among them in terms of pricing: the Starter plan is available at $4.95 per month compared to Enterprise’s $2,995.95.

Get the package based on the inventory volume you plan to sell. Anything more will be impractical and needlessly expensive.

3. Utilize store promotion tools effectively

An eBay subscription provides you access to the platform’s promotion tools, such as the Promotions Manager and Promoted Listings. The tools can be found on the Marketing tab on the Seller Hub.

Just to illustrate how vital promotions are, an overwhelming 94% of consumers surveyed said they always look for a good offer when online shopping.

Here are other staggering results from the referenced RetailMeNot survey:

• 80% are willing to try a brand for the first time just because of their promotions
• 66% made unplanned purchases because of promotions
• 74% said promotional deals are the top factor in deciding to purchase online
• 81% look for the best deals when shopping online

Promotions manager

Customers love discounts and promos, and you can use eBay’s Promotions Manager tool to create them with ease.

You can offer the following to potential buyers:

• Coupons
• Order discounts
• Sale events
• Shipping discounts
• Volume pricing discounts

Promoted listings

Promoted Listings will boost an item’s visibility on the platform. The best thing about it is that it is risk-free—you only pay when the promoted item is purchased.

There is no upfront payment, and you bid the amount you are willing to pay to promote your product. To determine the ideal price, check the Average Ad Rate or the average amount other sellers have paid. Adjust your rate accordingly, as it will be charged on top of the final value fee.

The tool is available to all eBay sellers, with Enterprise subscribers enjoying credits for the tool. The credit can be used for various marketing campaigns on eBay.

All products are eligible for Promoted Listings except real estate, vehicles, travel, and some other items.

Saving on payment processing fees

The best way to save on processing fees is through eBay’s Managed Payments. The platform will process end-to-end payments via all major credit cards, PayPal, Google Pay, and Apple Pay, which is very convenient for buyers and sellers. It streamlines your operations, too.

How can a seller save on such a process? eBay will process payouts, so they will go directly to your linked checking account. This way, you do not have to pay extra processing fees.

Taking advantage of eBay fee promotions

Always remain updated on eBay’s selling fees. It pays to be an active seller rather than a passive one. Sometimes, the platform puts a cap on the final value sale, which is usually a fraction of the standard rate. Some of the fee reduction promos are targeted towards certain products, so you need to be sure you fit the criteria to take advantage.

New sellers often get many fee promotions, too. So, if you are still on the fence about selling on eBay, these incentives for newbies may be a game-changer for an online seller. Add the benefit of millions of monthly users, and you may be enticed to sign up!

Efficient shipping strategies

Yes, certain shipping methods will help you save money as an eBay seller.

1. Free shipping promo

From a buyer's standpoint, some of the shipping costs on eBay can drive items way above their budgets. But this doesn’t always have to be the case—sellers can compensate for this.

You can incorporate the shipping cost in your item price to run a free shipping promo. Just make sure to crunch the numbers to see if it is practical for you to do so. You don’t want to increase your price too high above your competitors and lose potential customers.

If you can’t offer free shipping, you can offer discounted rates to attract more buyers.

2. Use eBay’s shipping discounts with partner carriers

Learn about the carriers that offer discounts and take advantage of them. You can even pass on your savings to the customers to make buying from your store more enticing.

3. Print shipping labels through eBay

eBay has its own shipping label printing service that could help you save loads of money compared to getting such service from the post office or another carrier company. You will save time, too.

Printing labels through eBay also comes with additional benefits, such as the ease of adding Signature on Delivery services and automatic uploading of the parcel’s tracking information.

4. Use the appropriate box size to package your item

The size of the box affects the shipping fee. Make sure you use the right packaging that perfectly accommodates your items to streamline your pricing.

Regularly reviewing and adjusting strategies

It is not advisable to keep changing your prices because you may drive away customers who prefer to buy from your store because of reasonable prices. But product prices are not set in stone—they will always fluctuate depending on the market. You must adjust your pricing strategies according to what is good for your business.

1. Monitor monthly eBay invoices for any unexpected fees

Study your invoices and analyze why they are larger or smaller than the last. Reach out to eBay if there are charges you don’t understand.

2. Adjust selling strategies

eBay fees may change periodically, and there may be reductions or discounts. Adjust your prices to reflect these changes to compensate. If you don’t want to change the item price, you can integrate these fees into sales and promotions.

3. Seek feedback from the eBay seller community

Don’t look at all other eBay sellers as your competition. You are part of a thriving ecommerce community, and you can always ask for advice and recommendations on how to improve your store.

Many of the bigger and more experienced store owners would be happy to impart wisdom to startups and new entrepreneurs. They have also learned the best strategies to save on eBay fees for selling through experience.

Conclusion

eBay is one of the best and largest ecommerce marketplaces in the world. An online seller would be remiss not to consider it. Understandably, there has been some grumbling about eBay fees as they usually take a 10% to 15.5% cut from the selling price.

However, some strategies can help you save money on eBay seller fees, and you will enjoy healthy profits for your ecommerce business in the long run.

Are you just starting to build your online presence? Know that you can access a directory comprising over 8,000 prevetted suppliers with more than 2.5 million products on SaleHoo. Whatever product you are thinking of selling, SaleHoo most probably has it. Get started now!