Sitting on the eBay dock

Remember when Otis Redding sang, “Sittin’ on the dock of the bay, wastin’ time…” For those of you who are too young to remember, suffice it to say it’s a classic. It’s a catchy tune that buzzes in your head all day after you’ve heard it, and the hiss at the end is also habit-forming. So why would you infer that eBay has anything to do with “sitting around and wasting time”?

If you don’t know what you’re doing as you strive to become an eBay seller, you could be wasting your time or deluding yourself into thinking you’ve found a way to make a fortune. What do you need to know about eBay and the cost of doing business on eBay? This can best be summed up with two things: many types of eBay fees and PayPal fees. I bring this to your attention so that you go into an eBay relationship with your eyes wide open.

It would be like having a garage sale at your house and not factoring in the cost of placing an ad in the newspaper and paying your children to view and help sell the items. Sometimes you can do all the work of having a garage sale, and it can be a flop after deducting the cost of having the sale. The same goes for auctioning items on eBay. After paying the eBay fees, sometimes there isn’t much left. So as he looks at the quarter, two dimes, and a nickel in the palm of his hand, he wonders, “Was it really worth it?” It could be “yes”; could be “no”.

The old phrase, “…die on a penny and a dime,” comes to mind when I think of eBay insertion fees, eBay seller fees, and PayPal fees (also owned by eBay). One of the keys to being successful on eBay is getting the most out of your listing and minimizing the fees you pay to list your item. A person needs to do research to arrive at a price that allows a reasonable profit after subtracting the “cost of doing business” from the selling price. Taking an eBay class would help beginners get the most out of their listings where the following costs are explained.

Listing Fees – This is the price you are charged for listing an item on eBay. When you list an item, the fee is automatically charged to your seller account. These fees are non-refundable. Basic insertion fees follow a sliding scale. For example, if an item is listed between $1.00 and $9.99, the insertion fee is $0.35, and an item that is listed between $50.00 and $199.99 costs $2.40 in insertion fees. However, there are many other things that can be done to improve a list. They all have a cost factor. The first photo is free, but additional photos are $0.15 each. To enlarge an image would be $0.75. What if you want a border, caption, bold, gallery, 10 day auction, and gift services? Yes you can, but each has a cost factor of $0.50 to $3.00. It can certainly add up if you’re not careful.

Buy It Now – This is the feature a shopper clicks on if they want to buy an item right away. They are asked to use PayPal and pay for the item. To protect the seller, the item remains available to other buyers until payment is complete. A buyer who is the first to submit the PayPal payment gets the item. This feature can be used with any of the other sales formats. However, the “Buy It Now” disappears once a bid is placed (if it’s an auction item). Of course, there is a cost for this feature that ranges from $0.05 to $0.25.

Reserve Fees: As a protection for the seller, a reserve price may be initiated so that you do not sell the item below a certain price. A seller reserves the right not to sell below the designated price, and the seller uses this option to encourage buyers to bid. A potential buyer may be put off if the asking price is too high, but a low asking price could backfire if you don’t establish a reserve. There is a fee for this of course. The good news is that the holding fee is refunded if the item is successfully sold. The bad news is that the fee is not refunded if the item does not sell. Something of a double whammy, in my opinion.

Final Value Fees: When the item is sold, eBay charges a Final Value Fee. Even if the sale is not completed, the fee will apply. However, you can request a full credit if the buyer did not purchase the item or backs out of the deal. Depending on whether the sale was from a regular auction, store inventory, or eBay motor vehicles, costs may vary in final value rate.

PayPal Fees: Signing up for PayPal is quick and easy. It’s a real plus for sellers because you can get paid very quickly. There are no monthly fees or setup fees. The other good news is that the transaction fees are less than most merchant fees for taking out a credit card. The other positives are that there is fraud protection and Paypal is available in 38 countries.

As you can see, there are many ways eBay makes money with the fee structures in place, but they are in business to make money. One reason that is touted as the party line in eBay schools is that it would be much better to sell items if one person opened a store instead of using the Internet. We are reminded that there would be rent, utilities, and many other things that a store owner would need. His argument is that it has to be worth something.

Just think of how many times someone has complained about wanting to get rid of some items stored in the garage. And how many times has someone else said, “Why don’t you sell it on eBay?” It is such a widely known entity and has such a global internet presence that you almost have to. Knowing the various fees and the best way to get your item listed ahead of time could help you succeed. You need to plan carefully and work wisely so you’re not “sitting on the eBay dock, wasting time.”

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