Getting Started on eBay: Fees and Startup Costs

eBay  is no longer just a great place to convert all that stuff lying around your house into cash. Tens of thousands of Australians  are now running profitable businesses on the site too.

In 2012, eBay reported that almost 160 Australian businesses each achieved $1 million or more in sales on eBay.com.au. So how did they get started?  Surprisingly, many of them started at home and then moved into bigger premises as they grew.

Over seven million unique visitors come to eBay.com.au every month. That’s a lot of potential customers already searching for products you could be selling. The great thing about eBay is that the costs of setting up a business are minimal, and most of the costs are only incurred when you sell. That means the up-front risk is very low. So what are the costs?

Fees on eBay

There are four types of fees on eBay.com.au:

  • Store fees
  • Insertion fees
  • Feature fees
  • Final Value fees

Register as a seller on eBay

It costs nothing to register as a seller on eBay.

Open an eBay store

Without an eBay store, you will only be able to list single items for a maximum of 10 days.  Opening an eBay store means you can create a listing for each product, nominate the quantity you have available, and leave it active until you sell out.  (See all the differences between having an eBay store or not).

You can choose from three store levels to suit your business, and can change the store level at any time. eBay store fees are charged monthly. The more you pay for the store each month, the less you will pay when you make a sale. The monthly fees are shown in the table below.

Listing products on eBay

Products can be listed on eBay in either Fixed Price or Auction format. Every seller gets some free Fixed Price listings each month, so if you start with a small product range, it could cost you next to nothing until you make a sale. The table below shows the Insertion Fees for each store level.

Adding a subtitle to your listings or adding a Buy-It-Now price to auction listings will incur an additional Feature fee. Uploading up to 12 photos for each listing is free.

Making a sale

Every time you make a sale, eBay will calculate a Final Value Fee on the sale price. The rate will depend on which level store you were subscribed to when the item sold.

eBay seller fees
A breakdown of eBay’s basic fees structure.

Certain product categories have lower or higher Insertion Fees and Final Value Fees. For details of all eBay fees, visit this page for  a comprehensive breakdown.

Using the above table, you can quickly work out how much it will cost you to start your eBay business.

PayPal fees

If you accept payments from customers via PayPal, make sure you include PayPal fees in your calculations. PayPal fees are charged at the time the customer makes their payment using PayPal, and reduces as more of your sales volume goes through PayPal. For further details on this topic, visit PayPal’s fees page.

Returns & refunds

Every time you refund a customer (conditions and time limits apply), eBay will also refund you the Final Value Fee charged on that transaction.  If your customer paid via PayPal, and you refund them via PayPal, PayPal will also refund the PayPal fee.

Other costs

As with any business, there are a wide range of costs to take into account including rent, staff, equipment, storage, delivery, office supplies, services and other overheads.  If you plan to grow your eBay business, it would be wise to consider an eBay compatible trading solution which can save you time, and allow you to manage a bigger volume of inventory and transactions with a higher level of automation.  With prices ranging from free up to $1,200 per month, selecting the right one will depend on your individual business needs. For details on some of the solutions available, there are further details available via our Seller Centre.

eBay recently launched this new Seller Centre with the intention to provide relevant and helpful information about running a business on eBay. If you’re thinking about starting a business on eBay, or already have one, this is the best place to look for in-depth information on the topic.

8 thoughts on “Getting Started on eBay: Fees and Startup Costs

    • EBAYANCHOR
    • 29th May

    I have an anchor store on ebay. What I would like Tim Davies to explain to me is why on certain categories my final valuation fee is not 6%, such as media categories.

    Why do ebay charge me 7.5% on media categories?

    Originally ebay lowered the insertion fees for these categories and increased the final valuation fees to compensate. However, an anchor store has no insertion fees on these categories therefore there is no argument that increased valuation fees are required to compensate for lower insertion fees. So why are anchor stores paying more than they would for other (and in most cases higher margin) categories?

    I think I know the answer but let’s see if Tim Davies is honest about why this is.

    Reply
    • Tim Davies
    • Tim Davies
    • 30th May

    Prior to 1 May 2013, the Final Value Fee for media category on eBay.com.au transactions was 9.9%. The store level made no difference. On 1 May 2013, this fee was reduced to 7.5%, the biggest reduction of any Final Value Fee in the recent price change. This means media sellers now have 24% lower fees than they did a few weeks ago. Sellers of media products are not being charged more – they are being charged considerably less.

    The zero insertion fees on all listings for an Anchor store is offset by the higher monthly subscription fee for an Anchor store compared to Featured or Basic stores. Featured stores now have free insertion fees for 80 listings per month, and Basic stores have free insertion fees for 40 listings per month. Prior to 1 May 2013, there were no free insertion fees for Featured/Basic stores.

    Full details of store pricing are available via the Seller Centre, where the full list of individual categories where the Final Value Fee differs from the store flat rate can be downloaded

    Reply
    • ebayanchor
    • 5th June

    Maybe you didn’t understand the question Tim.

    To put it plainly. It costs no more for ebay to provide it’s services to media categories than it does any other categories.

    Other categories have a final value fee of 6% for anchor stores. Why then do media categories have a higher final value fee of 7.5%?
    How does ebay justfy charging a higher final fee valuation for basically the same service provided for other categories?
    What extra services or benefits do media category sellers get that warrants a 25% fee premium over over categories?

    Reply
    • Tim Davies
    • Tim Davies
    • 11th June

    Media is not being singled out. Fashion, Collectibles and Tech Accessories are also on the same rate. Together these categories represent the largest proportion of listings on eBay. By comparison, eBay’s fees on Media are presently half those of other online marketplaces. Acknowledging that each industry is unique, eBay commenced using category differentiated pricing several years ago.

    Reply
  1. Hey! Quick question that’s completely off topic. Do you know how to make your site mobile friendly?
    My website looks weird when viewing from my iphone4.
    I’m trying to find a template or plugin that might be able to resolve this problem.
    If you have any recommendations, please share. Thanks!

    Reply
    • Tim Davies
    • Tim
    • 12th February

    Funny you should ask! I’m about to start working on this very topic, because it’s increasingly relevant on eBay now too. In fact around 53% of all visits to eBay.com.au are now via mobile devices!
    The way you approach it will depend on how you manage listings on your website or eBay store. Some ecommerce platforms/solutions have mobile templates built in, such as http://www.ezimerchant.com and http://www.neto.com. Magento websites are a little different, but templates can be created for both a Magento website and eBay store (via M2EPro plugin) for mobile optimised listings and pages. I’d suggest by speaking with the ecommerce platform or solution that you’re using to manage your products and site, or if you’re in Australia, speak http://www.swiftproductions.com.au (Sydney) or http://www.dzinehub.com.au (Melbourne) to find out what they can do to help. An eBay store and listing template design is less than $1000 from either. If you’re outside Australia, get in touch with a reputable web designer and just start by having a chat with them about what makes a website look good on mobile devices. Hope that helps.

    Reply
    • mir
    • 3rd February

    Dear Tim Davies,
    If I would like to open a store on Ebay where can I get the products. Am I getting any support from Ebay.com.au?
    Thanks

    Reply
  2. Hello everyone! I have a basic eBay shop selling Clothing and Accessories with the monthly t/o $3k. My friend who sells electronics and IT stuff on eBay said his sales quadrupled after subscribing to the Anchor shop. I would like to upgrade but have doubts if this will be worth it. Would this be true to say that eBay gives you better SEO and exposure via affiliates on a higher subscription plan? Cheers,
    Rob

    Reply

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