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14 Ways to reduce your eBay & PayPal Fees

by trevor. Average Reading Time: about 5 minutes.

One of the top complaints against eBay is the level of fees. It is therefore surprising that many large eBay sellers make unnecessary and easily avoidable payments to eBay. This article lists 14 easy-to-implement ways to reduce eBay fees and improve the profitability of your eBay business.

Strategies for all eBay Sellers

These fee-saving strategies can be implemented by all eBay sellers, no matter what items they sell or their listing strategy.

1. PayPal Merchant Discount

If you are a volume seller on eBay, then you are probably eligible for a merchant discount on PayPal fees. The merchant fee structure is as follows:

UK PayPal Fees
£0.00 to £1,500.00 – 3.4% + £0.20
£1,500.01 to  £6,000.00 – 2.9% + £0.20
£6,000.01 to £15,000.00 – 2.4% + £0.20
£15,000.01 to £55,000.00 – 1.9% + £0.20
above £55,000.00 – 1.4% + £0.20

US PayPal fees
$0.00 to $3,000 – 2.9% + $0.30
$3,000.01 to $10,000 – 2.5% + $0.30
$10,000.01 USD-$100,000 – 2.2% + $0.30
above $100,000 – 1.9% + $0.30

To receive discounted fees you must log onto your PayPal account and apply. This can be done from PayPal’s fees page.

Potential saving – up to 2% (1% on PayPal.com) on all PayPal transactions.

2. Relisting Credits

Insertion Fees are generally non-refundable. However, eBay will automatically credit the Insertion Fee for an unsuccessful auction if:

You relist the item by clicking the "relist your item" button on the item page for the ended listing (or any other relist feature on the website) and the relisted item is sold the first time you relist it.

Potential saving:  Up to £2 ($4.80 on eBay.com) per relisted item.

3. Reclaiming Non Paying Bidder Fees
If a buyer does not pay for their item, you can claim back the eBay fees via eBay’s unpaid item process. An unpaid item can be reported up to 45 days after an item closes.

 See http://pages.ebay.com/help/tp/unpaid-item-process.html for more details.

Potential saving: Listing and final value fees on unpaid items.

4. Host Your Own Photos

If you need to use more than one photo to describe your item, eBay will charge per additional picture. However, it is simple to host your own photos, and avoid this extra cost. 

If you have an eBay shop, eBay provides 1MB of free picture storage. In addition, there are many free photo hosting services such as http://www.theimagehosting.com or http://www.pictiger.com/ 

Potential saving:  £0.12 ($0.15 on eBay.com) per additional picture.

5. Tweak your Starting Prices

Be careful when you choose your starting price, as a very small difference in price can lead to a large increase in insertion fee, especially if you are selling multiple items. For example, an item with a starting price of £29.99 incurs an insertion fee of £0.75, whereas a starting price of £30 would cost £1.50.

On eBay.com a staring price of $49.99 incurs a fee of $1.20 where as a starting price of $50.00 would cost $2.40.

Potential saving: Up to £0.75 ($1.20 on eBay.com) per listing.

6. Pay for Your eBay Fees Using a Cash Back Credit Card

Several credit cards give cash back on money spent. By using an American express credit card to pay your eBay fees, you can receive a small rebate for your eBay fees. Bear in mind that this only works if you pay your credit card bill in full each month.

Potential saving: Up to 1.5% cash back on eBay fees.

7. Teach Yourself HTML

Many sellers use eBay’s listing designer service to improve the look of their listing. If you are listing multiple items, this cost will soon add up. By learning some simple HTML or employing a designer, you can develop your own template and save on the extra listing fee.

Potential saving:  £0.07 ($0.10 on eBay.com) per listing.

8. Open an Ecommerce Store

Potentially the best strategy of all is to expand your business beyond eBay. By setting up your own ecommerce store you can upsell to customers you have acquired through eBay, and pay no fees at all. Channel Management software such as eSellerPro, Marketworks and ChannelAdvisor enable eBay sellers to run an ecommerce store off the same inventory as their eBay sales.

Potential saving: You pay no eBay fees on items sold off eBay!

Savings Fees on Listings

The following fee-saving tactics involve changes to your eBay listing strategy and should therefore be considered in the light of your business objectives. For each of these tactics, run a limited trial and compare the conversion rates (% of listings that sell), average sales price (sales total/number of items that sold), take rate (% of sales that eBay takes as fees) and margin against your current listing strategy.

9. eBay Shop Listings

Despite the recent rise in shop listing fees, eBay shop fees are still on the whole cheaper than core listings. The best use of shop listings is for upselling commodity items and for unusual items that require a longer listing period. 

10. Sell More Expensive Items

eBay has a sliding scale of fees, taking a higher percentage of the sale price (take rate) of less expensive items. By selling more expensive items you can reduce your take rate. For example, the take rate of a £5 item is 9.25%, whilst for £200 item it is 4.55%.

11. Reassess Your Use of Listing Upgrades

Listing upgrades are expensive, and should not be used unless they are improving sell-through rates and average selling prices. eBay research products like eSellerStreet (http://www.esellerstreet.com), Hammertap (http://www.hammertap.com ) and Terapeak (http://www.terapeak.com/ ) will allow you to investigate the effectiveness of listing upgrades for products in your categories. You should also conduct your own trials.

12. Second Chance Offers

eBay’s Second Chance Offer feature allows more than one item to be sold from a single listing, saving on the listing fee for each additional sale. When using second chance offers, you should be aware that you are making a trade-off between price and sales volume, as second chance offers are inevitably lower than the item’s final price.

Potential saving: Up to £2 ($4.80 on eBay.com) per sale.

13. Lower Your Starting Prices

eBay’s insertion fees are linked to the starting price of an auction, by lowering your starting price you will encourage bidding and lower your listing fees.

Potential saving: up to £1.85 ($4.60 on eBay.com) per listing.

14. Dutch Auctions

Dutch auctions, like the Second Chance Offer, allow you to sell multiple items off a single listing, saving on multiple listing fees.
 
Potential saving: Up to £2 ($4.80 on eBay.com) per item.

This article originally appeared in Auctionbytes

7 comments on ‘14 Ways to reduce your eBay & PayPal Fees’

  1. Car Buff says:

    Don’t sell on ebay at all and save boat loads of money 🙂 The fees just keep getting higher and higher, like the cost of a stamp.

  2. Daniel Buys says:

    Great post man, really informative stuff. Keep up the good work!!

  3. Michael says:

    Thanks! I don’t use eBay a lot but I do like to watch the pennies.

    I just listed a £4,700 Filmmaking Workshop on a Greek island.
    Take a look:
    http://cgi.ebay.co.uk/ws/eBayISAPI.dll?ViewItem&item=290128900742&ssPageName=ADME:L:LCA:UK:31

    Cheers,

  4. Angry! says:

    Charging two fees under the guises of two companies is very surreptitious of ebay. It is exorbitant and gouges users. The entire fee should be consolidated so users can understand they are paying ebay’s listing fee and final value fee, and Paypal’s transaction fees. In other words you pay 8.75% of final sale value on ebay (or $25, whichever is less), ebay’s listing fee (usually another $.25), and Paypal’s 2.9% and $.30. Four fees!! WOW! What a rip off. They’re raking in 11.65% plus about $1 in flat fees. Since the percentages are both subtracted off of the final sale fee (instead of in series), Ebay & company gets every seller for at least 11.65% of their final sale! That’s more than Chicago’s sales tax 0f 10.25%, the highest in the U.S. If ebay wants to gouge its customers, they could at least combine all fees to make them a little more transparent. From now on I will only list items on ebay…not sell them. I will cancel my auctions before they expire to avoid these ridiculous fees and sell my items directly to buyers – hence only using ebay as advertising. And for that I will sacrifice the listing fee…nothing more. I might also create a second ebay account and outbid everybody on my own auctions and contact the next highest bidder and offer the auction item to them at the highest price they bid (outside the realm of ebay of course). Any way to avoid these ridiculous fees. Thanks, but NO THANKS!

  5. How Much says:

    How up-to-date is this info ?
    None the less i totally agree with car buff. Ebay fee’s aswell as the compulsive use of Paypal and their extortionate fee’s is beyond ridiculious. It is paramount to theft.
    Do not waste your time or effort, or your hard earned cash to help either of these greedy companies. Try a real boot fair, it’s more fun, you’ll meet real people, and you’ll stand a better chance of making a few quid for your efforts.
    You’ve been warned.

  6. Dee says:

    If everyone boycotted Ebay then they’d have to reduce fees. Or just state that the article you’re selling is your property, which we remain so until sold and that payment will be made/accepted as you see fit Ok so they could remove the listing and people may have viewed it by then, but so what it’s less money going to line their greediy pockets.
    You can fight fire with fire!

  7. Jane says:

    Is it really free to relist or do they slug you somehow later?
    ie Automatically relist this item up to 3 times if it doesn’t sell – it’s free to relist. Final value fees apply

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