Power Maxx Blog

Next in the highly anticipated “How to Sell on Ebay” series, comes an article on pricing your items.

After you’ve setup an account, picked a product, and figured out the feedback system - I bet you wanna make some money!!

Before you jump to conclusions, and think you can just start posting your listings with a small markup, think again. Pricing an item is much more difficult than you think, as you have to keep in mind a LARGE number of things.

eBay Fees

The first and foremost of all the things to keep in mind, are the fees that eBay charges you to sell on their site. You might think, pfft, it can’t be that much to sell on eBay can it? Well just ask yourself where the millions of dollars that the company makes per year come from. That’s right - you.

Fees vary around the board, with a listing fee, and a final value fee. I’ve taken the liberty of copying the auction listing fees chart here for you. There are other classes of listings whose fees are much higher, such as fixed price, but here’s the basics for you.

Auction Style

So let’s say that you list a TV for sale.  You think you got the item for a great price, and want to sell it for $1000.  Assuming you have done your research, and this is a competitively priced item, it will cost you $4.00 to list it, and $36.31 for the final value fee.  That’s 4% of your total sale gone to ebay fees, and thats before any listing upgrades, which are all ofcourse extra.

In reality, you’re actually BETTER OFF selling more expensive items, because the fees decrease as the price goes up.  Say you sold a $25 item.  It would cost you 8.75% of that in fees!!! WOW!!!

S & H

This includes not only postage, but packing materials, and your handling time.  If you’re only making a few dollars on your sale, and it took you an hour to do everything associated with that sale, from purchasing/listing/communicating/packing/going to the post office.  That means you only made a few dollars an hour!!  Doesn’t seem as reasonable as before.

You better believe that when you buy something at a retail location, all of their employee time (you are your own employee), and costs to get the items out the door are covered in the price they sell their items at.  Considering this, why shouldn’t you?? So don’t forget to include accurate shipping and handling costs to reflect all of these factors.

Paypal Fees

Paypal is going to cost you 3% of the total sale, plus 30 cents.  ANOTHER 3% out of your pocket!  And unlike on ebay, this is on the TOTAL AMOUNT that passes through paypal, which includes shipping and handling charges!!

Taxes

When calculating your bottom line, be sure to calculate if you’re going to have to be paying the tax man.  If you’re moving more than a certain amount a month, you are obligated to declare this as income whether you like it or not.  These numbers will vary by the area that you are in.

So keeping these factors in mind, it is often more difficult to price an item than one might think!!  Often when doing market research, I will see a seller trying to undercut everyone else simply to try to get a bigger market share.  In the end, the joke is on him, as all of the above fees will eat through any of the minimal profits he will be making, and he will end up with a loss at the end of the month, or at most, pennies per hour in income!

Ask yourself, is that what you want?? Probably not - so be sure you do a detailed cost analysis on any items that you are buying to try to sell on eBay.  The costs are often much more than most ever expect!

Related Posts

• How to Sell on Ebay: Picking a Product
• How to Sell on Ebay: SHIPPING FAST!
• Selling on Ebay: Improve Customer Service & Avoid Bad Feedback!