The New Math for eBay Sellers
How is eBay different now?
As of September 16th, eBay listing fees for fixed price media items will decrease dramatically. In the past, eBay fixed price listing fees were $0.25 and up for a 7-day listing; now eBay is offering fixed price listings fees of $0.05* for a 30-day listing. To offset this reduction in listing fees, eBay has increased Final Value Fees (FVFs) for fixed price media listings from 8.75% to 15%.
What does this mean for me?
Good news! For most sellers, listing items on eBay Core (fixed price) was prohibitively expensive due to the high cost of listing fees. The new fees make eBay Core an affordable marketplace option for exposing inventory to a broader base of customers.
The following examples are provided to take some of the mystery out of the math behind eBay and will help explain why listing your items on eBay is an advantageous step in growing your business.
What about Listing Fees?
Listing fees have decreased dramatically, as seen in the following matrix, which shows how the listing fee increases with the time it takes to sell an item.
As you can see, on the “Old eBay,” the cost to list an item increased by $1.00 for every additional month that an item was listed prior to selling. In the “New eBay,” the cost for each month is only $0.05, making it more affordable to list your inventory, even if an item is listed for several months.
In addition, eBay now charges only one listing fee for multiple quantities of the same item.
Now we’ll walk through an example. Imagine you are listing a book with a market price of $3.50 and shipping of $3.99. For this example, we’ll assume that the item sells in 60 days.
Old eBay Example
1. When you sell a $3.50 book on eBay, charging $3.99 in shipping, the total revenue is $7.49. (Total Revenue: $3.50 + $3.99 = $7.49)
2. The 60-day listing fee for this item is $2.25, the Final Value Fee (FVF) is $0.31, and the credit card fee is roughly $0.37, for a Total Marketplace fee of $2.93. (Total Marketplace Fees: $2.25 + $0.31 + $0.37 = $2.93)
3. Your gross revenue, after marketplace fees, is $4.56. ($7.49 - $2.93 = $4.56 gross revenue)
4. In this example, you make $4.56 on the sale, and your eBay fees would be 39% of your revenue! And even if the item doesn’t sell, you are out the cost of the listing fee.
New eBay Example
1. When you list a $3.50 book on eBay, charging $3.99 in shipping, the total revenue is $7.49. (Total Revenue: $3.50 + $3.99 = $7.49)
2. The 60-day listing fee for this item (on “new” eBay) is $0.10, the Final Value Fee (FVF) is $0.53, and the credit card fee is roughly $0.37; this leads to a Total Marketplace fee of $1.00. (Total Marketplace Fees: $0.10+ $0.53 + $0.37 = $1.00)
3. Your gross revenue, after marketplace fees, is $6.49. ($7.49 - $1.00 = $6.49 gross revenue)
4. In this example, you would make $6.49 on the sale, almost 40% more than you would on the “old” eBay, and your eBay fees would be only 13% of your revenue.
Now for the Bottom Line:
List on eBay!
With low listing fees, a FVF of 15%, and no marketplace fee on your shipping revenue, eBay Core is now an affordable marketplace for media sellers. Total marketplace fees on eBay will now be similar to, or in some cases lower than, other media marketplaces. And, sellers with strong Detailed Seller Ratings (DSRs) on eBay qualify for additional fee discounts.
Please note: Fee examples shown above represent eBay Core media items in the eBay catalog. Listing fees may be higher for non-catalog items. Examples provided above are illustrative in nature. Please refer to eBay to confirm your actual fees.
*eBay promotional pricing valid through March 31, 2009 - subject to change.