EBay Fees and making money on EBay

A lot of people are using EBay to buy and sell their stuff online. EBay used to be a great place to sell but in the past 2-3 years they started what I call “quality service” campaign and with that lost a lot of sellers.

Why?  They geared their “quality service” towards buyers and abandoned their sellers. Thinking money is in the buyers. To the point they are right but if there is no merchandise there aren’t any buyers either.

Their quality control is one of the best, if not the best, among the online auction sites for avoiding scams.  People who buy from an Ebay seller can almost be assured they will get what they’d bid on.

The trouble with the “quality service” started when they got away with the buyer rating. They’ve left only two rating options, either “positive or leave feedback later”. This encouraged many buyers not to go through with their purchase, but at the same time left many would be sellers frustrated and  to either offer a buy it now with immediate purchase option or a fixed price listing for a higher fee that is not refundable since it is a classified listing like in the news papers.

The buyers had no repercussion as their action, but put a lot of strain on the sellers who had to go through the EBay channels to get their fees annulled so they can re-list their items without paying twice for listing and selling fees.

The result was that many people started to look for alternate online auction sites thus weakening EBay, who started to look for more quality control. Me too, looked for other selling methods and sites including online classifieds that have cheaper overall fees than eBay and more trustworthy buyers.

When you list an item in classifieds people will call you to arrange a viewing because they are genuinely interested and most likely buy if they like the item. EBay on the other hand became sort of like an entertainment or amusement site. (I am gonna bid and see what happens, I am not gonna buy it anyway,  attitude)

Well, yeah. EBay implemented a so called “buyer unpaid item strike”, but sooo, who cares??

If someone wants to use EBay to buy stuff they can use it anyway. Who checks the buyer unpaid item strike anyway?

The other thing EBay did during this same time is, increased their fees for many popular items and got away with basic listing fees for items listed at .99 cents or less. With this they’d pushed the final selling prices down to the level where people were forced to use either a higher starting price to make some profit, or give their stuff away for almost nothing. This increased EBay’s revenue thus made it more expensive for sellers. This also discouraged many would be sellers, including me and many of my friends.

EBay fees are also hard to follow. They display their fee structure on their website, but for one to find out exactly how much is an item will cost, is hard. Fees for different amounts and different items and different fees for the same item with different starting prices. Plus the paypal fees. S0 if one looks at EBay fees, one can safely calculate with 20% total fees by the time all are paid.

EBay started to require sellers to offer Paypal as their only accepted online payment service. Which is good in a sense, because makes it easy for the buyers to complete the transaction if they have a pay-pal account. Of course the sellers can accept other payment services too, but EBay makes it difficult for them to include it in their listings.  Since Pay-pal is owned by EBay, Pay-pal fees had became part of EBay’s fees and revenues.

Pay-pal in the past also used a whole bunch of “false” advertising. Advertising their service as “send money for free to anyone with an email address”.  As it turned out after a lot of complains from people (including me and my friends), the service wasn’t free at all!!!  There was a service charge at the end that the recipient had to pay. So if someone sent you  $100 dollars, pay-pal took their fee out of that and you got less than $100 dollars. Of course the statement was true. Sending it was free, but the recipient didn’t get the full amount. They forgot to include that part in their advertisement. So it seems EBay’s honesty only goes as far as forcing it down on their customers throats, but once it comes to theirs they are cheaters.

Finally they’d got rid of that advertising campaign and now they offer an option where the sender can chose whether they or the recipient pays the fee.

So, how to check the exact EBay/Pay-pal fees for an item sold??

One simple method is that the seller stops all payments to eBay when the bill becomes due. In about a month after EBay was not able to withdraw the money from the seller’s account, they will send a reminder of it and also the exact amount of the money owed. All the seller have to do is to check what they’ve sold and the total amount of the sale and figure the percentage out.

This way they get the exact amount of EBay fees for the sale. As for the Pay-pal fees, they are simpler to figure out and one just have to add that to the other fee.

The verdict is!  If you want to make money on EBay by buying and selling you have to buy your item at more than 20% discount or else you will loose money on EBay.

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