Online Auction Fees Explained

As an online auction seller, you have to watch those fees.  Most auction websites are in business to make money, so the majority of them will charge you fees on either the front or back end of the deal, or both.  In addition, you may be charged for extra fees when you select extra options like 'Gallery' or 'Featured' auctions. 

You have to watch out for the quality of your listings, titles, and descriptions, to make sure you get the best results for your sale.  And you have to use the right auction house, too.  Remember, most auction sites just want your item to sell.  Many of them care only whether or not they make money, not whether or not you do.

Be especially careful with add-on fees!  What may seem like just a few nickels here and there, can add up quickly, and make or break the bottom line.  Success in the world of auctions is all about profitability, and if you are giving all your money to the auction house for those extra snazzy ads, you are never going to be able to buy that yacht you always wanted, no matter how many widgets you sell.

Before we discuss seller fee strategy in depth, there are two basic types of auction fees every seller should know about: Listing Fees and Final Value Fees.  If you are seasoned in online auctions, go ahead and skip down to the section entitled 'Seller Strategy: What fees should I pay?'.

Listing Fees (last update, May 2005)

This fee is what the auction house charges to initially list your item for sale.  Unlike most live, in-person auctions, many online auctions charge this fee upfront for their service, regardless of whether the item sells or not.  This is known as the Listing Fee, and it usually varies with the starting price of your item. 

For instance, ebay charges an insertion fee of 25 cents to list an auction item with a beginning price of one penny to 99 cents, 35 cents to list an auction item with a beginning price of one dollar to $9.99, 60 cents for an item starting between $10 to $24.99, $1.20 for any auction that begins between $25 to $49.99, etc.  There are several more price levels, but as of this writing, the cap is any item that starts for over $500 and above has a $4.80 listing fee.

For business and industrial capital equipment, which are generally high dollar ticket items, they have a special flat insertion fee of $20 dollars, $5.00 for reserve price, and 1% of the maximum closing as a final value fee.  See ebay for more specific fees, or check out our fee chart.

This may sound like a lot, but not when you consider what you might pay your local newspaper to list something in their classifieds ads.  Plus a classified ad would not have a color picture, a lengthy description and the ability to reach a gazillion or so worldwide customers.

You might spend $30 or $40 bucks on that newspaper ad and have no one call you, since you only reach the immediate residents of your town or the outlying subscription areas.  But now, starting for a measly .25 cents or so, you are IN the global marketplace, baby.

Final Value Fees

These are charged as a commission on the final selling price of your auction goods or services.  This fee may or may not be charged in addition to any listing or extra fees you may incur. 

Generally, the final value fee is a flat fee charged for a certain initial dollar amount sold, with an additional percentage tacked on as well.  For instance, ebay charges a flat final value fee of $5.25 for items ending under $25.00, with no extra percentage added on.  For any item that sells between $25 to $1000, they charge a flat fee of $1.31 plus 2.75 % of the final sales price.  For any item selling above $1000, you are charged a flat fee of $25.63 plus 1.25% of the final item price.

Who pays the fees in auctions? 

Usually, the seller pays the fee in auctions.  However, some online auctions have a buyer's premium as well, usually around 10 percent.  These are most likely going to be incurred in popular wholesale auctions such as Liquidation.com, or in specialty houses like Sotheby's or Heritage Comics.  Check with your auction site carefully before buying or selling for details.

Are listing fees refundable?

Generally, no.  Remember, listing fees are generally not refundable, even if your item does not sell.  This is why it's important to write a catchy title and engaging description as well as take a good picture of your item.  You want it to sell the first time, so you don't spend tons of money and waste lots of time re-listing your auctions.

However, on ebay and other sites, if you re-list the item and it sells the second time, depending on the extra ad features you use, they will refund some or all of the listing fees the second time around- check with your auction site's listing fee policy for details.

Can I get my listing fee refunded if the buyer backs out?

Some auctions allow exceptions to the 'no refund' policy on listing fees.  Their are two occasions where you are most likely to see this.

The first is when a deadbeat bidder does not want to pay you after they have bid on your item and won.  You contact them again and again, and they just will not respond or pay.  Most auction sites will grant a credit or a refund if you follow a certain process to try and chase down the bidder and get them to pay.  Admittedly, it's a hassle.  In fact, many sellers just ignore this option, preferring to eat the loss and call it 'cost of doing business' rather than wasting the time.  You shouldn't!  Those fees CAN be refunded and they really add up over time.

The other situation where you may be able to get a refund is if the auction site or it's server experiences technical difficulty in the last day or minutes of when your auctions are scheduled to end.  Check with your auction site for details on this policy.  Sometimes, an auction website will even automatically refund the fee in this situation- if not, you should request it.

Does every auction house have fees?

Most online auctions do charge a fee for their services.  Some will charge only a listing fee, some only a final value fee, some charge both, some charge none.

Promotional Listing Features

Seller strategy: What fees should I pay?

As a seller of goods in online auctions, you want to receive the maximum bang for your buck in the fee department, while still reaching the most auction buyers as possible.  If you want maximum sales exposure, you either have to use a specialty auction house or one that has massive amounts of traffic.

We recommend these ebay extra listing features:

We recommend caution and/or sparing use of these:

Bold, Subtitle, Highlighted and other Listing Upgrades

Bold Listings

Bold Listings are an extra $1.00 fee, and it makes your listing title appear in Bold Typeface.  It does draw more attention to your item as you scroll endlessly through long lists of auction results, but at a buck a pop, we recommend using it sparingly.

Highlighted Listings

Highlighted listings cost an extra $5.00.  This feature highlights the entire item description in the listing results section (currently in purple).  This makes the listing stand out as users scroll through the list, similar to the bold feature (see above).

We do not recommend this feature for regular listings- If you have a high dollar item and are "pulling out all the stops" with other listing upgrades, then fine- go ahead and use it.  But if you just want to make a $30 or $40 item stand out, use the bold upgrade at a $1.00 fee instead.

Also, your item should have a value of least 20 or 30 dollars or more.  Why use Bold on a $9.95 item?

Item Subtitle

This is a newer listing upgrade feature on ebay.  We like it! At .50 per listing, it is very cost effective for many seller's listings.

We still recommend only using it on items starting at or above $24.95- even at a cost of only 50 cents, your margins will be reduced way too much when using it on several $9.95 auctions, especially if you are using the either the gallery or double item category features.

This extra listing feature is great at making an auction stand out in the listings for several reasons.  As you scroll through the auction lists, it will stand out just as well if not better than a Bold upgrade, at only half the cost. 

Why does it work so well?  Because you are offering more information about the item.  In effect, it is like a mini description right next to your item title in the category results.  This is especially handy if you are selling an item that many other people stock- you will stand out from the crowd, as you now have that extra, precious line of space to advertise the item's unique features, your free shipping, your expertise in this collecting area, your stellar feedback or whatever.

One last thing to consider: if you have ever used any affiliate networks or a PPC (pay per click) search engine to advertise a website or product online, then you probably know that the best converting link is not banners or images, but in fact, text listings.  Why?  As the internet has evolved over the years, people have learned to tune out and ignore banner images. 

Remember, why do people surf the net?  For information, not colorful images- images only help package and sell the info- They are important, but only as important as the message being delivered.  On ebay, people want both pictures and information.  They want to see a picture (gallery feature) and to quote Dr Evil, they "need the info," so item subtitles work very well at initially grabbing their attention.  At 50 cents a pop, it is a definite winner for many auction items.

Double Item Categories

What if you could double the exposure to your auction item listings, and get it in front of twice as many people?  With ebay, you can do just that.  You can list the item in two categories.  This is especially useful if you own a highly specialized item that can't be easily placed in a genre- if you can't quite narrow down which category your item fits into, then a double item category listing is heaven right?

Maybe.  There's just one, teensy, weensy little catch here.  You pay double the listing fees as well.  And not just the regular listing fees, the upgrades as well.  So, if you use Bold ($1.00), Gallery (.05), Highlight ($5.00), Subtitle (.50 cents) and Buy it Now (.05) you pay $6.60.  Use the double category feature, and you pay $13.20 - double that amount!  And for featured listing fees at $19.95, you will double that amount to nearly 40 bucks!  Remember the phrase "A fool and his money?"  Doubling your  categories can be helpful, but use it sparingly, and only when absolutely necessary,  or you will never be able to afford that vacation home from your ebay profits.

A penny saved is a penny earned

Think about the following:  Your listing fee on a $9.95 starting price item is already 30 cents.  If you add-in a gallery and Buy It Now fee (each a nickel), you are now up to 40 cents in fees.  Your final value fee is 5.25%, so that's roughly another 50 cents if sells for $9.95. 

So, the total cost to run a roughly $10 USD value auction item, is $0.90, with just the recommended Buy It Now, and Gallery fees!  Now tack on that extra dollar for Bold and you are at $1.90. Now, almost twenty percent of your profit margins are all going into listing fees!  This is still an acceptable margin, but you'll have to do a lot of volume at that rate to make any money.

Instead, reserve features like Bold and Highlighting ($5.00) for maybe 1 or 2 of your $30.00 or $40.00 auctions when you are listing 10 or 20 auctions at once or more.  And try and use it on your more impressive, high value stuff.  This way, your target audience sees the cream of the crop, and once into your auction description, you can try and cross sell all those other 10 dollar widgets.  Highlighting, you may want to reserve for items in the $70.00 to $100.00 minimum selling price range.

See our ebay Image Fees Advice

Fees at Other Auction Houses

Specialty Auction Houses

Specialty houses should really only be used if you are selling highly expensive, rare items with a small but informed buying public.  For instance, if you deal in rare comics or pulps, you may want to check out Heritage Comics and pulps.  They deal in a wide amount of 'slabbed' or 'CGC' comics and their staff lists the items for you- they charge both a seller fee and a buyer's premium. 

You may also try specialty auctions for inexpensive or moderately priced items, as long as they fit the theme of that particular auction site.  For instance, whether you are selling costume jewelry or expensive diamond earrings, you could try Bidz.com for your auction. 

Another example of where you could benefit from a specialized auction is when selling computer equipment- You could try ebay, but if you want a smaller sales force to compete with, consider ubid- although they have many types of products for sale, they specialize in all things computer related.

See our list of Specialty Auctions

Wholesale Auctions

Sometimes, you get more than you imagine for your money.  An example of this is Liquidation.com, which is absolutely perfect if you are selling wholesale or surplus goods.  They will list and even warehouse the item for you- They do most of the work, and also charge both a seller fee and a buyer premium.  Their large list of B2B contacts makes them one of the favorite places for businesses to auction of their surplus inventories- You can find everything in bulk there, from X-Box systems to office furniture for a whole building (see more on Liquidation.com here).  Just have a warehouse ready if your'e buying stuff there!

Should I only use auctions with no Final Value Fees?

Using one of the newer auction houses that has either no fees or only charges a final value fee may or may not be wise, depending on your own set of circumstances with the type of items you sell. 

What are the pros and cons to using a 'fee free' or no listing fee auction site? The main advantage is, you don't risk as much up front as a seller, and you only pay a fee if your item sells.  The disadvantage is that you may not receive as many bids for a high demand or rare item, since the newer sites don't necessarily have the traffic flow of the 800 pound gorilla of the auction world: ebay.  This means potentially less money on a high ticket item, unless the right bidder happens along, which is still possible of course.

One example of an auction success story that does not charge for basic listing fees: Epier.com.  Epier generates a high amount of traffic, and they have a rapidly expanding user base.  You may consider using this site if you have lots of items of the same type, because when a customer finds one of your auctions, you can cross-sell them on all your other stuff, all with no fees upfront.

Epier and other sites like it are also great if you sell many of the same types of items over and over- you can save on re-listing fees this way.  Auction houses like Epier are also great if you are selling low demand items or goods that many other people stock (the latest Madonna CD release, McDonald's toys, etc).  Why pay that listing fee if it may not sell the first time, right?

Another possibility for selling items without having to pay extremely high listing fees, is to use an ebay storefront.  You can set up an ebay store and sell fixed price listings as well as your regular auctions.  The listing fees are low, re-listing is automatic based on your choice of how many months you want to re-list, and you can even automate your store so it rolls over every month without you lifting a finger.  There is a basic fee of $10 a month for a store, and premium and anchor stores are available for business and corporate users.  Premium listing fees like Gallery are also lower in ebay stores, and provide good ROI (Return on Investment).

See our full article about ebay stores.

Visit ebay stores or open one now: ebay stores

Home│Site Map│About Us│Contact Us│Legal│Links│Store│Chat
Copyright © 2000-2008 BidLab.com and its licensors.  All Rights Reserved.

eBay® is a registered trademark of eBay®  Inc.
All other trademarks are the property of their respective owners.