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Monday, June 26, 2006

Lessons Learned From First eBay Auction

So I completed the sale (and will ship the item in the morning) of my very first eBay auction. Technically, it sold for the amount I hoped for, so I can’t complain. But for anyone who is considering using eBay for the first time to unload their tras… I mean, somone’s treasure, here are some things I will keep in mind for my next auction:

eBay obviously makes some money off the auctions. There’s little you can do about the final value fee other than simply be prepared for it. The insertion fee, however, is something you can predict and keep at a minimum. First of all, carefully consider the starting price and, if chosen, reserve price. If you opt not to set a reserve price, and you’re confident the auction will go well, consider a starting price of 99 cents, which means your base insertion fee is only 20 cents. But you can start with a higher price if you choose to set a reserve price. The base insertion fee is calculated on the reserve amount if used—up to $4.80 for $500 or more. Plus, you pay anywhere from a dollar to 50 dollars to have a reserve price—though this amount is refunded if your item sells.

Buy It Now fees are only between five and 25 cents, but be sure you want to offer this. Maybe your item is popular and will make you more money if the auction completes. On the other hand, a Buy It Now purchase could also get you more for that one person who wants the item but the auction itself isn’t getting a lot of interest.

Definitely consider the 35 cent fee for a Gallery photo. That simple, naked camera icon that otherwise turns up next to your auction during a search just seems like eBay’s way of saying, “This auction is being offered by a cheapskate.”

PayPal is a great tool, especially if your item is of enough value that a potential buyer will probably want to use a credit card. But here’s a very important thing I learned this weekend. If you (as the seller) don’t upgrade to a premier PayPal account, the buyer is limited to funding his or her PayPal transaction with a bank checking account—not a debit or credit card. It costs nothing to upgrade your account, but the fee to receive a payment from a buyer’s debit/credit card-funded PayPal account is 2.9% of the final transaction, plus 30 cents. I’m not saying don’t upgrade your account—just keep this fee in mind.

Also regarding PayPal, if you decide to have the money from the sale sent to you, don’t be so quick to pooh-pooh having a check mailed to you. Sure, it takes a week or two, and costs $1.50, but your bank is very likely going to charge you for an electronic funds transfer (EFT). Bank of America charges $10! (That $1.50 check processing fee doesn’t sound so bad now, does it?) Naturally, YMMV.

There was a time when I felt annoyed by the concept of “shipping and handling.” I mean, places would charge some exuberant amount to ship a product to me and I knew good and well the actual postage didn’t cost near that much. I was thinking, don’t handle it. Just ship it!

But I’ve gained a new respect for the “handling” aspect. Now, I’m not suggesting anyone abuse this tidbit, but having just paid maybe $15 to $20 in fees for my auction that came in at $201.50, and my understanding that eBay’s final value fee does not use the shipping cost in its calculation, it becomes fairly easy to have sympathy to a seller for tacking five or ten bucks for handling to offset the various fees.

Take caution, however. Finding the balance is important. If you are subject to PayPal’s debit/credit card transaction fee, this calculation is based on the entire final price from eBay—S&H included. So, the higher your “handling,” the higher PayPal’s fee. Obviously, though, this isn’t an issue if you’re paid by cash/check/money order/etc.

So, will I sell on eBay again? Of course. I’ve got two milk crate-sized containers of Trek novels I want to unload, and someday I’ll sell this G4 tower if I ever manage to upgrade it to something that will better-handle my home server needs. But the final results of my auctions will hopefully be more predictable and fees kept to even more of a minimum (kudos to Andy for advice that kept the fees this first time probably a fair bit lower than they could have been—given my naivety as an eBay seller).

» Posted by ALBj at 01:23 AM (ET)
Category: Journal

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