Can you still make money on eBay?
eBay fees are being revamped, but how will it affect you?
Sections
Brief overview for sellers
If you are new to eBay, the billing system works like this. You list an item for sale, either in an auction format or with a fixed price, called a Buy It Now (BIN) price.
You will usually pay eBay a listing fee (although there are plenty of free listing day promotions to take advantage of). Then, if the item sells, you will pay a Final Value Fee. This used to be worked out on a tiered structure, depending on how much the item had sold for, but will now be a flat fee of 10% of the final price. If you accept payment via Paypal you will also pay a fee to them.
Rachel Robson highlights four ways to save money as you shop!
The fee increase
It’s important to note that this new 10% flat final value fee only affects private sellers who are selling an item on a Buy It Now basis, so auction sales are left unaffected. Sellers will only pay this fee if they make a sale, and they will get 90% of the sale price (minus listing fees and Paypal fees if applicable!).
eBay states that its new policy will “make it simpler and easier for you to calculate up-front the fees you'll pay”, which is a lovely spin on a fee increase.
The media has generally proclaimed the rise to be a terrible blow for private sellers, but is this actually the case?
- In most cases, sellers will not notice a huge change. Old fees for most items selling for up to £50 were 9%, so they have only actually raised the fees by 1% for these sales.
- Fees are capped at £40.
- There are some categories that will remain unaffected by this, specifically vehicles, property and contract mobile phones.
- Insertion fees remain unchanged.
Simpler and more transparent?
It is definitely true that eBay has simplified the process, and despite this costing the seller more, it will have its fans.
The present system has a number of different fees applying to different categories, making the process very confusing.
For example, in the technology category you would pay a Final Value Fee of 5.25% for items up to £29.99, then £1.57 + 3% of the final selling price of £30 or more, then £3.67 + 2.5% of the final selling price of £100 or more and so on!
In this respect eBay is absolutely correct in saying that it has simplified matters as all items will now have a 10% fee, regardless of value.
Tax and eBay
There may come a time with your eBay sales when you stop being a private seller and become a trader, wherein you will have to pay tax. If you are unsure about your status take a look at my previous article: The taxman is watching your eBay account.
Related how-to guide

Make some extra money
It’s easy to increase your income using these tips.
See the guideThere has also been a recent clampdown by HMRC on sellers who are not paying VAT, which you have to pay if you are trading above the £73,000 turnover threshold.
If you are a trader and are earning over this amount but have not yet registered for VAT, then do it now. HMRC is likely to offer a partial amnesty for those who voluntarily come forward, with any penalty being capped at 10% to 20% of the tax outstanding over the past five years. The penalties will be substantially more if you wait to be caught.
Summary
So, for most small-time private sellers there will be very little impact on their day to day sales. If you take the auction option, which I would always advise you to do if you are clearing out your loft and flogging a few second hand goods, then you will be unaffected.
eBay itself says the change won't affect "the 180,000 small- to medium-size businesses and entrepreneurs trading professionally on eBay”, which is to all intents and purposes true … except for the fact that it has already increased fees for professional sellers in its last period of ‘change’, a fact it hopes you will overlook!
Despite this, you can’t help but feel a little exploited by eBay’s slow and steady fee increases. With eBay’s first-quarter profits rising by 20%, and stock rising by 43% in the last year, it's not doing too badly! Isn’t it just a little greedy to be increasing its fees at a time when most of us are tightening our belts to make ends meet?
Most Recent
Comments
-
I mentioned this elsewhere too but eBay fees are maddeningly high but thats what you get with a monopoly. I now sell on a new site called [B]http://www.hoizo.com[/B] where they chare no fees at all, totally free. They use payPal so payPal do take a little bit but its nothing compared with how much eBay take.
REPORT This comment has been reported. -
I would like to add that almost every item I have bought for my car has had to be returned as they did not 'fit'. I am very careful to submit the correct info to ensure I get the right item but I am finding an increasing amount of traders appear to be less than honest. It has never been a problem returning the item with apologies following but in some cases I have had to pay the return postage. This is quite an hassle as you can imagine. I am loathe to award negative feedback as some sellers do make a genuine mistakes & offer immediate refunds & one doesn't want to punish the small struggling business who is trying to make a living just as I am, but it has become all too common so I have yet another reason to avoid ebay.
REPORT This comment has been reported. -
Their fees are exhorbitant. I sold a few items on ebay but lost out overall because of their fees. I advertised a car on ebay under the classifieds. I got more enquiries & eventually sold through advertising in Bargain Pages. I now go to the papers for items I need before ebay as I used too. They are pricing themselves out as far as I a concerned. It's the usual problem. Success is followed by greed as businesses lose all sense of morality as the execs become pigs following the scent of yet more money
REPORT This comment has been reported.
Do you want to comment on this article? You need to be signed in for this feature
15 February 2012