What are eBay’s fees? It’s a question every new eBay seller has, and is very simple to figure out with a pocket calculator, once you have some insight into how eBay calculates fees.
First and foremost, here is an official link to eBay’s fees page, which breaks down the fees for just about every type of item you can sell on the site.
As you look over eBay’s Seller Fees page you’ll discover something very quickly, it looks very complicated.
How the heck are you supposed to remember every percentage for each category?
Below, I’m going to run you through my simple process for calculating eBay fees. You can use a calculator, or if you are good with simple math in your head, you can easily figure out the answer without a calculator.
Before you learn how to calculate eBay’s fees, it’s important to know a bit of background information on how the fees have evolved recently.
A Background of eBay’s Fees and The Change From PayPal to eBay Managed Payments
Before you calculate eBay’s fees for an item you want to sell, it helps to understand that eBay changed the rate of all its fees a few years ago, when it got rid of PayPal and introduced sellers to eBay’s Managed Payment System.
Here’s some further information about eBay launching Managed Payments.
After eBay Managed Payments launched, their percentages for final value fees for each category went up by about 1-3 percent. They also added the 30-cent fee per transaction that you see on the eBay fee chart I linked to earlier.
The reason for the increase?
Well… Before eBay managed the payments, you would pay the eBay final value and listing fee, then on top of that an extra 2.5 – 3% to PayPal plus a 30-cent transaction fee.
After eBay took over, they decided to combine the merchant fees that PayPal used to charge and baked that right into the final value fees that are charged when an item sells. Plus, they added the 30-cent per transaction fee.
So either though eBay directly raised final value fees for each category after eBay Managed Payments launched, you were not paying the PayPal transaction fees anymore. And for most people, they noticed a ZERO net change in how much money they kept after a sale.
In fact, depending on the category you were in, you might have actually seen a small savings on overall fees. Some categories may have seen a small increase as well, but the average eBay seller saw a net zero change overall.
The Different Types of eBay’s Fees
If you have not already checked out eBay’s Fees Page, do so now.
Afterward, you’ll notice there are three types of fees that are charged:
Listing Fees
Listing fees are actually free for your first 250 monthly listings, after that each listing fee will average about 35 cents per listing. To prevent listing fees, just upgrade to a store subscription.
Right now, I’m paying roughly $27 a month for 1,000 listings in my store. To pay $27 dollars a month for your own online store with lots of website traffic is quite a bargain in my opinion.
Update: As of 4/1/2023 I decided to get a yearly eBay store subscription, so my actual monthly cost is now around $21 per month.
Per Transaction Fees
The Per Transaction fee is pretty straightforward for taking any payments online. Whether you have another online store off eBay or not, just about everyone who takes credit card payments online is stuck with this fee. As of right now, that fee is a flat 30 cents per transaction.
Final Value Fees
The Final Value Fee is the most important fee to remember and pay attention to, it has the highest percentage taken out from your sales, which ranges from 3.5% to 15% of your item’s total sale price (excluding sales tax.)
While the final value fee is not applied toward sales tax, it is applied to your shipping charges.
So whether you offer free shipping or charge a customer shipping on top of the price of your item, you’ll always pay the final value fee for the combined total of your item’s cost + the cost of shipping.
A Simple Way To Calculate eBay Fees (using a pocket calculator)
When you are considering an item to sell on eBay, it’s important to make sure it’s worth your time and trouble. You need to know the amount you are actually going to get in profit from selling the item.
A large part of your selling costs on eBay is the fees.
Referencing the various eBay fees in the previous section, it’s easy to estimate the listing fee and the transaction fee for an item you want to sell. In most cases, if you are a casual reseller, your listing fee will be free. But, you will have to pay a 30-cent transaction fee when something sells.
NOTE: If you are a large seller, you’ll need to calculate listing fees or a store subscription into your costs.
Next, we have to calculate the final value fee, which is the highest fee that is paid. Every type of seller, big or small, has to pay this fee when their listed item sells.
Assuming you’ve reviewed the eBay Fees Page already (which is linked in the previous section), it’s safe to assume that the highest fee you are going to pay as of 2023 is 15% of the total cost of selling an item (item cost + shipping cost.) And remember, any sales tax your buyer pays is excluded from the final value fee.
Different categories have different fees, so unless I know the exact fee for a product category, I always reference the highest percentage of 15% for the final value fee. This makes it very simple to remember a standard number for the final value fee percentage.
Here’s How To Calculate How Much The Final Value Fee Will Cost You
Using a pocket calculator, you can use the decimal number .15 to express 15% (remember, 15% is the highest percentage you can pay on eBay’s final value fees, so it’s the best reference point.)
Then, multiply .15 times the total of your sold item’s price (including shipping.)
So, if you sold an item for $100, then multiplied by .15, you would end up with the number $15 dollars. That means that my final value fee for that $100 dollar sale is 15 dollars, meaning I have $85 dollars left for my profit.
Now, you still have to subtract the cost you bought the item at and your shipping costs. For this example, if we assume the item costs you $10 dollars to source and $15 dollars to ship out, we’d have to subtract another $25.00 dollars from our $85.00 dollar profit.
We are now left with a net profit of $60.00, if we include any listing fees or transaction fees, that would add an additional 30 to 60 cents in fees as well.
Note: Because the listing and transaction fees are so small, you really don’t have to worry about calculating them when you are estimating.
If you want to learn more about calculating percentages using decimal numbers and a calculator, I recommend you watch the following video.
My True Overhead Costs For My eBay Store (Hint… It’s Not Just eBay Fees and Shipping Costs)
In the real world of selling on eBay, my current estimate for overhead costs is about 28%, for combined eBay fees and Shipping Costs.
That means if I sell an average item for $50 dollars with free shipping, I can expect to only net about $36 from the sale because I’m out $14 dollars in shipping costs and eBay fees.
NOW, If this item is super heavy, I’d be out even more money. In some cases, that item might cost $20 or $25 dollars to ship if it’s over 3 pounds and requires a medium or large box.
Other Costs To Factor In Include The Following
You also need to factor in your time spent for sourcing, listing, taking photos, and shipping items. You’ll need to buy supplies like shipping boxes, tape, shelving, office supplies, and business software. If you hire someone to help you with any part of your eBay reselling business, that’s more overhead costs you have to account for, such as hiring an accountant or CPA for filing taxes.
There is plenty of other misc expenses like car mileage, gas, books, learning resources, etc. too.
This is the true reality of overhead costs when running an eBay reselling business. So account for everything you can think of!
Knowing Your Overhead Costs Will Help You Source Products More Profitably
It’s important to plan for the overhead costs of eBay fees and shipping costs when you are sourcing products to resell. Make sure to include all the other expenses of running a business as well, that I mentioned previously.
When I’m at the flea market looking at an item, sometimes I can look up the price on eBay and get the sold comps pretty easily. Then, I always anticipate losing a third of that number in shipping costs and eBay fees. (Remember, my average overhead selling costs are about 28%)
After that, I still have to factor in my time and misc business expenses, etc. into the potential profit I want to make.
So assuming I’m down to 66% of the total selling price for an item, after accounting for eBay fees and Shipping costs, I need to capture as much profit as possible to make it worth it.
Here’s An Easy Way To Know What To Pay For an Item, That You Want To Resell or Flip
For most products, I do not pay more than 10 to 25% of the total eBay sold price to buy something and resell for a profit.
This is a rule I have for most of the items I buy.
This way I can always net at least 50% or more profit from selling an item after accounting for eBay fees and Shipping costs. This will allow me to still be paid for my time and the operating expenses of having a business.
You should follow a similar rule for yourself when sourcing.
Now, there are some exceptions on some higher-end items where you could probably pay up to 50% of the eBay sold price and still make some good money. Such as a luxury item like a Rolex Watch or something.
As you learn more and more about products and a certain product category, you’ll be able to make the right calculations in your head on the right price to pay for something.
This skill takes practice and time! You’ll learn fast as you source products that don’t make you any money!
Final Thoughts
I hope you learned something new about calculating eBay fees and shipping costs when you sell something on eBay. We also talked about how this affects your decision for how much you should buy an item for when you are sourcing products to flip for a profit.
With practice and time, estimating overhead costs will be second nature for you. When you evaluate a deal on an item to buy for resell, you will have a gut feeling about how much you should pay for it.
Thanks for reading, cheers for now!
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