Selling Stuff on eBay: Does It Really Save Money?

August 25, 2009

in Personal Finance

There was a time when people had to do some legwork to sell their unwanted items. They could have a garage sale, which requires a great deal of planning and setting up. They could put it in the paper, which was pretty easy but cost money and required the arrangement of times for customers to come look at the goods. They could sell on consignment, but that required delivering the item to the consignment shop and collecting payment when it sold.

Today, selling stuff is much easier. All you have to do is sit down in front of your computer, go to eBay.com, and create a listing for each item. If the item sells, you can even arrange for pickup with carriers such as UPS and FedEx. It doesn’t get much easier than that.

But there is some debate as to whether this is the best method for making money from items you don’t need. Some believe that the fees (see below) are a small price to pay for the convenience offered. Others feel that all of those fees add up to too much money for not enough reward.

The question of whether selling on eBay saves money doesn’t have a single correct answer. It’s something that must be evaluated on a case by case basis. It depends on what options you purchase with your listing and what method you would use if you weren’t selling on eBay.

eBay Fees

There are several fees that are associated with eBay sales. Here’s what you can expect to pay:

Listing fee ? This fee is charged when you list each item. The amount varies according to the starting or reserve price. There is a flat fee for “Buy It Now” items.

Final value fee ? This fee is only charged if your item sells. It is calculated based on the selling price.

Reserve fee ? Setting a reserve allows you to sell only if bids meet or exceed the reserve price. Adding a reserve price requires payment of an additional fee.

Buy It Now fees ? If you permit the “Buy It Now” option in your listing, you will incur additional fees.

Category-specific fees ? Certain categories are subject to different listing, reserve and final value fees. These include business and industrial capital equipment, real estate and automobiles.

Optional items ? You can add certain features to your listing to make it stand out more, but these features trigger additional fees. If you have eBay host your photos, you’ll also have to pay extra.

The only fees that are mandatory are the listing and final value fees. If you stick with a basic listing, you won’t have to pay anything else. Depending on the starting and selling prices, these two fees could add up to anywhere from less than a dollar to a few hundred dollars.

Shipping

Another cost to consider when selling on eBay is shipping. This includes the cost of the box, packing material and postage. Depending on the item, shipping costs can be high. It’s best to pass them on to the buyer in most cases, but sometimes that can be a deal breaker.

There are some costs associated with selling on eBay. Whether or not they are worth it depends on how much money you can make from the item on eBay versus selling it another way. If you want to keep costs down, it’s best to do some calculations before you make any listings.

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