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Does eBay Charge Too Much for Its Service, or Too Little? The Truth Might Surprise You! by Avril Harper author of 'Bank Big Profits Selling Vintage Topographical View Postcards on eBay' and 'Make Money Tearing Up Old Books and Magazines and Selling Them on eBay'.
Have you ever considered leaving eBay because listing and final selling fees eat up the majority of your profits for virtually every item you sell at the site? Do you think eBay charges too much for listing and way too much for final selling fees and you consider PayPal’s share of your profits is just adding insult to injury (because if you didn’t know it already, eBay owns PayPal and has several bites at your profits).
If you have considered leaving you’re not alone and from what I read in forums today more than seventy-five per cent of people think eBay charges way too much for its service, whether you sell mainly at auction or you prefer listing goods Buy It Now, Best Offer or other format.
As for yours truly, well I’m one of the twenty-five per cent of people who don’t think eBay charges too much for allowing people like you and me to make a good living at their site, not by a long shot. In fact I dare say if eBay doubled its fees I’d still be more than happy to sell my goods at their site every day.
Before I tell you why, let’s take a brief look at how much or how little it costs to list and sell items for high profits on eBay, based on my own personal experience.
Briefly, I almost always auction my goods with a starting price of £4.99, even items that cost me ten or twenty and sometimes hundreds of pounds each to buy. I rarely use sub-titles (they cost 35p each), and I never use add-on devices like highlighting (a mammoth £2.50 a time) or emboldened text (75p a throw). So hundreds of items I upload to eBay every week cost me fifteen pence each to list and can generate hundreds of pounds per sale.
Moving on, I rarely set opening bids higher than £4.99 because listing fees grow exponentially with starting prices, up to £1.30 for items starting £100 or more, as you’ll read about at: http://pages.ebay.co.uk/help/sell/fees.htm
When my items sell I’ll pay up to 9.99% of the finishing price to eBay in final selling fees, and more of my profits by way of commission to PayPal for processing my payments.
Why do I set my starting price so low? Does it not bother me that eBay gets almost ten per cent of my takings and PayPal also has its hand out for my cash?
Actually, no, it’s doesn’t bother me at all, for reasons I’ll tell you about now.
My listing fees are low - just 15p per item for auctions starting £1 to £4.99 - because I only list goods I’m almost certain will sell and at high prices and that means I rarely end up banking a couple of quid for goods that cost me an arm and a leg. I know my goods have a good chance of selling because I only buy items I’ve already researched on eBay and found to be perennial best sellers. You do it using the ‘Advanced Search’ technique I’ve told you so much about in our monthly newsletter.
So I can use those low starting prices to grow bidder confidence and get the bidding ball off to a flying start. This is best explained by reference to offline auctions where, if you’ve visited any or watched them on television, you’ll know that sometimes it’s minutes before the first bid is placed. Once placed the room can turn into a frenzy of bidders all clamouring for the auctioneer’s attention and very often offering prices much higher than they originally intended. Exactly the same happens on eBay, explaining why low starting bids are referred to by professional auctioneers as ‘come and buy me’ prices which they say generate early bids and pave the way for bidding wars and record high finishing prices.
Yet other reasons explain why low prices tempt early bids and increased bidder numbers on eBay. One is because people don’t want to leave bidding to the last minute in case they get distracted and miss a potential bargain, so they’ll bid early and decide whether to increase their bids or give up bidding later. Secondly, most people are on a limited budget and will place a low bid but nothing substantial so they’ll bid early and stop bidding when they reach their limit. Either way people who don’t end up buying from you can be the catalyst for higher bids from more affluent bidders later.
By implication both scenarios make more people likely to place an early bid for £4.99 than will bid first day of a ten day sale for goods priced in hundreds or even thousands of pounds. And as you’d guess more bidders means more money being offered and bigger profits for you and me.
As a side issue, because it’s easy to believe what eBay says about using highlighting and sub-titles and similar to grow your profits, it’s also very easy to tick boxes to add those features to your listing and overlook what you’ll be paying. So listen to me please when I tell you, from personal experience only, I have never found any of those devices likely to generate higher prices for any good listing.
The reason is that most people search eBay using keywords describing products they’d like to buy and they are rarely swayed by pretty colours or heavy lettering, and sub-titles that don’t respond to searches on eBay. So all you have to do is determine what words and phrases people use to find products such as you are selling and use those words in your title and description. That ‘Advanced Search’ for completed auctions on eBay is where to find your keywords. Then for listings starting up to £4.99 you’ll pay just fifteen pence, compared to close on four pounds to give your listing a sub-title, some bold text and a bit of spot colour.
If you still need proof of how unnecessary costs add up and eat heavily into your profits try working out costs for fictitious listings at: http://ecal.altervista.org/en/fee_calculator/ebay.co.uk/
Moral: get your keywords right and forget about add-ons!
Other Things To Know About Listing Fees
* If a listing doesn’t sell, you can try relisting it and in most categories you’ll be refunded the second listing fee if your item sells second time round. Check eBay rules about refunds at the site listed earlier and always make a few changes to your listing to improve its chance of selling second time out.
* You can place the same listing in two eBay selling categories, you’ll pay twice the fee, and you will reach everyone searching through your chosen product categories. But the problem is most people do not search by category, the majority of people search using keywords and that makes paying for two categories an unforgiveable waste of time and money.
* You can set a reserve on goods you don’t want to sell below their real value, you’ll usually pay several pounds, and once again I’ve never found a reserve particularly useful. That’s because a reserve can alienate bidders and if your product is not worth the reserve price no one will bid that high anyway. If it is worth the reserve price and two or more people want it, you’ll get the price you want without paying for the privilege.
* If you’ve ever sold in offline salerooms, you’ll know you’ll be charged fifteen per cent, sometimes twenty per cent of the selling price and sometimes more for illustrations and catalogue entries. Even worse, if your lot fails some auction companies have a standard ten or twenty pounds no sale fee. Compare that to eBay charging a few pennies for a listing and a maximum 9.99% for selling and asking just a few pennies if your item goes unsold.
* Following on from the last point, eBay’s market is global and comprises millions of visitors to the site every day, compared to most offline auction rooms who reach double figure visitors - if they’re lucky!
Now tell me you think selling on eBay is expensive!
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Avril Harper Titles
Make Money Tearing Up Old Books and Magazines and Selling Them on eBay
Bank Big Profits Selling Vintage Topographical View Postcards on eBay
The Ultimate Guide to Becoming an eBay Trading Assistant
The Ultimate Dropshipping Report
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