eBay fees got you down?

Although you can make a great income through selling on eBay, there’s nothing more demoralizing than seeing what could’ve been had you not sent so much in seller-related fees.

While some fees are an inevitable part of the eBay seller experience, there are a few tricks you may not know to reduce your overall fees. Let’s go over a few strategies you probably haven’t heard of yet.

Open an eBay Shop

There are two types of sellers on eBay: those who make casual sales and those who treat eBay as a business. If you’re the former, it may not make much sense financially to invest in a shop subscription. However, if you plan on selling a high volume of products on eBay and turn it into a legitimate business, I highly recommend paying for a shop subscription.

Depending on the shop subscription you choose, you’ll enjoy a discounted insertion fee for fixed, “Buy it now” listings.

There are three types of shop subscriptions. Let’s take a look at each one individually and what type of discount you’ll receive from each.

Basic

From £17.38 per month

• 200 free fixed price listing per month
• £0.09 additional fixed pricing listing per month
• £0.04 per auction starting under £1
• £0.13 per auction starting at £1 or more

Premium

£52.17 per month

• 1200 free fixed price listing per month
• £0.04 additional fixed pricing listing per month
• £0.04 per auction starting under £1
• £0.13 per auction starting at £1 or more

Anchor

£217.38 per month

• Unlimited free fixed price listing per month
• £0.04 per auction starting under £1
• £0.13 per auction starting at £1 or more

Now, let’s look at how much you’ll pay without a shop subscription:

No Shop Subscription

• 0 free fixed price listing per month
• £0.26 additional fixed pricing listing per month
• £0.09 per auction starting under £1
• £0.26 per auction starting at £1 or more

Become a Business Seller

If you decide to open a shop, you can open one as a private seller or as a business seller. At first glance, the subscription fee for a private seller (£19.99 per month including VAT) may seem like the better deal when you compare it to the business sellers’ fee of £17.38* per month excluding VAT.

However, if you’re already VAT registered, you can reclaim any VAT that you’ve paid on business-related services, such as your eBay shop subscription.

As you know, VAT is a complicated topic, but fortunately, there are a few good resources that explain it in detail that I can. Check out these posts for navigating the VAT with your eBay shop:

• VAT and your eBay business
• VAT and your eBay fees
• Businesses and charging VAT

Start With a Smaller Auction

As we illustrated above, you’ll pay considerably more for a higher priced auction. Instead of starting your auction off on £1, why not go for £0.99? It may not be a whole number, but it can save you a whole lot on your insertion fees.

No matter which shop subscription you choose, you’ll pay £0.13 for auction starting at £1 or more, but you’ll only pay £0.04 for auctions starting at less than that amount.

Plus, with a lower starting price, you’ll attract a lot more interest. I’ve seen quite a few epic bidding wars that started under £1 and quickly ratcheted up into the hundreds.

And, if you’re not selling through a shop subscription, the insert fee more than doubles from £0.04 to £0.09 (for auctions starting under £1). The price for auctions starting at £1 or more skyrockets from £0.13 to £0.26.

The moral of the story: Start low and pay less for insertion.

Reconsider eBay Listing Upgrades

Listing upgrades are promoted as marketing tools that help you improve the look of your listing. For example, you can have bold text or enlarged photos. You can also pay to schedule your listings in advance.

While some of these listing upgrades are worth it, some may not affect your listing at all. This is why I highly recommend testing.

Take two similar products and post one with upgrades and another without upgrades to see if the upgrade positively impacted the sale. If not, don’t waste your money with the listing upgrade. But remember, there’s no “one size fits all” answer here. Test, test, test!

Reduce Packaging Costs

Packaging costs can often sneak up on you. And when it comes to shipping items, every gram counts.

You may find it easier (and cheaper) to pack items in envelopes instead of boxes. Boxes are often heavier than envelopes, especially when you stuff the box with extra packing material to ensure safe transit.

If you can get away with a bubble padded envelope, do it.

Apply for a Merchant Rate on PayPal

Did you know you could lower the fees you pay on PayPal just by asking?

PayPal has something known as Merchant Rates which go completely unadvertised. It’s even hard to track down on the PayPal site, which means you’ll actually need to contact PayPal directly to start the qualification process.

Here’s how Merchant Rates work:

If you make at least £1500 per month in payments to your PayPal account, you can qualify for a special, lower merchant rate. Here’s a quick breakdown of your price per transaction from PayPal:

Image Courtesy of PayPal UK

Here’s the fine print: you’ll need to maintain that £1500 per month to continue to enjoy Merchant Rates. If you dip below that amount for any month, PayPal will revoke your Merchant Rates.

Consider Micropayments for PayPal

In addition to applying for a Merchant Rate, you can also lower your fees with micropayments.

If you do a lot of low value transactions (£5 and under), you can set up micropayments. With micropayments, PayPal charges a lower fixed fee. You’ll pay 5% and 5p instead of the regular 3.4% and 20p.

To get started with micropayments on your PayPal account, you’ll need to show that your average transaction is less than £5. You’ll also need a PayPal business account to qualify.

Visit this page to set up your PayPal account for micropayments.

Over to You

Do you have any super secret tip for reducing your eBay costs? Let us know in the comments below.