Selling on eBay: Is it worth the fees?

The Reseller Hangout Podcast

Thanks so much for tuning in! Do you think eBay fees are worth it? Comment below!

Transcript:

Rob: What’s up, guys? Today, we are talking about eBay fees. 

Melissa: It’s not super exciting to talk about fees, but we are going to dive into is it worth it to sell on eBay with the fees that they have? 

Rob: That’s right, nobody likes fees. Nobody likes to have to pay extra on top of a sale when you’re reselling stuff, but we’re going to give you three reasons why these, eBay fees actually, work in our business and why we choose to [00:01:00] pay eBay fees. 

Melissa: And if they would work in your business as well.

So before we dive into those reasons, let’s dive into what the fees actually are and how to compare them to other platforms too. So there are several other reselling platforms. We don’t sell on them all at all, but we do cross posts on a couple. But the biggest ones, so, OfferUp fees are 12.9%, so a flat rate of 12.9%. Mercari fees are 10% flat and then 2.9% processing fee, which is 12.9%. So they try to tell you that it’s 10%. 

Rob: And we’ll even set back these fees for OfferUp you only have to pay fees for shipping items. So if you sell an item locally on OfferUp, you do not have to pay fees.

I mean you are listing an item, somebody is coming in and paying you cash for it. But where there is a transaction that goes through online, whether it’s a processing fee through OfferUp, that’s where they will charge you the fees on top of it, Poshmark is more of an online platform. So I think everything that you sell in Poshmark will get fees, or sorry, Mercari will, will be fees that you will have to pay.

Melissa: [00:02:00] Yeah, and then OfferUp and Facebook you can have a local option. So the Poshmark fees are $2.95 for, for anything under $15 and then a flat 20% anything over $15. And then Facebook fees are, this is again, not local, this is shipping is 5%. So they are actually the lowest of all of them. 

Rob: They’re trying to suck us in and get us to sell on their platform.

Melissa: Yeah. And we’ll talk about that in just a minute, but why we don’t ship through them right now? 

Rob: Yeah, so one of the biggest things is traffic. Now, when I was younger… 

Melissa: I didn’t talk about eBay fees yet. 

Rob: Oh, jump in. Let’s hear it. 

Melissa: eBay fees vary depending on the category that you’re in. So there’s going to be many different categories, and if you have a store, but we haven’t paid more than 11.7% since managed payments took over. So it used to be eBay plus PayPal was around 12% to 13%, depending on if you had a store. So now 11.7% is the highest we’ve paid. We have paid as low as 8%, on some categories. 

Rob: Industrial stuff, larger items. Yes. 

Melissa: Yeah, because they have a different category, so a [00:03:00] different percentage. So right now, 11.7% is lower than 12.9% and 20%, so it’s lower than all of them except for Facebook right now. So it does make sense for us in that respect. And then we’ll get into the first reason. 

Rob: And it is traffic. When I was younger, my parents would go to yard sales. They would buy stuff. I love yard sales. At 11 you’re going to garage sales, flea markets, thrift store, stuff like that. But when I was younger, I specifically remember this and this is before eBay, my parents would go to yard sales, they would buy cool stuff, usually commercial items. I, I specifically remember an orange juicer, a commercial orange juicer.

This sucker was big. It was like six foot tall, three or four foot wide. It was a big stainless steel juicer. I still remember them buying that at a yard sale, bringing it home, cleaning it up. We had an orange tree in the front yard, so my parents threw oranges in and we got to use it, make sure it was working right.

And then they sold it in the classified section. Now the whole thing with traffic is at a yard sale. You’re only going to be able to see, probably depends on your area, but on average, maybe 100, 200, 300 people come to a yard [00:04:00] sale on a given Saturday or Sunday. And my parents there, what they did was buy stuff from the yard sales, and then they would turn it around and they would sell it in the classified section.

Like I said, this was pre eBay, so they would take it from a smaller venue, which was a yard sale and bring it to a bigger venue, which was the classified section. The classified section, we grew up in Orlando, the classified section had the potential of reaching 20,000 to 30,000 people that might look at that classified section on a weekend.

And then you would bring that item from a smaller venue to a bigger venue and be able to sell it for more money. So that’s kind of what it is with eBay. Now, eBay is one of the venues that has over 187 million registered users. Now all those users will not be looking for your specific item, but that is a bigger pool of people who actually are together and looking, you’ll have more people looking for that specific item.

So our business model is to buy in the local venues, OfferUp, Craigslist, flea markets, yard sales, all in the [00:05:00] local local venues that reach less people. And then we pull it back and we sell it on eBay because it reaches so much, so many more people, that you’re able to ask more, what the item is actually worth. You’re able to ask that when you’re able to get it in front of more people. 

Melissa: Yeah. So they are the biggest used online retailer. So I mean, Amazon is bigger than them, but they deal with mostly new items and not very many used items, but they are the biggest out of all the platforms with the most users and most people who know it and are comfortable with it. So that is one of our favorite places to sell, and one thing that sticks out in my mind was that dining room table that you tried to sell locally. It was, this was a hutch and a table and six or eight chairs. 

Rob: Eight to 10 chairs. It was a beautiful set. We bought it at a auction, beautiful, solid wood set, and actually was name brand.

I think it was Art was the name of the A-R-T. If I remember it was an abbreviation. Anyways, I don’t remember exactly, but I think that was the name brand that it was, but it was like a $10,000 or $12,000 set, snagged it for $350, [00:06:00] listed it in our local venues. We listed it in Facebook Marketplace, Craigslist, OfferUp, had it listed for a month for $750, $800, and we could not sell it. We could not sell it in the local market. So I started doing some research on eBay. Never had shipped anything like this before. And I was like, man, this is kind of, I mean, it’s kind of crazy to try and ship something like this. But I started doing research on eBay and I saw, something that was in common, the people who were selling tables and sets like this.

They were offering shipping, freight shipping. Those were the people that were moving these items that were actually selling them and they were selling them for some decent money. So I told myself, okay, if I can sell this thing, I am going to learn how to freight ship. And we did, we actually put it on eBay.

We listed it for $2,200, not $800, $2200, and we sold it in less than a month. And then we charged an extra $500 for shipping, which we were able to pallet it up and we were able to ship it. But that just goes to show you, when you get your items in front of more people, you’ll be able to ask more money for them and they will be able to sell [00:07:00] quicker because you’re in a bigger pool of people, that might be looking for that specific item. So, that was kind of our aha moment, you know, shipping larger items. But it also was, you know, the items that you get in front of more people you’ll be able to sell quicker and for more money.

Melissa: And didn’t we figure that eBay fees for that were close to $300, like $290 something? 

Rob: Yup, $286, I think it was. 

Melissa: Ok, $286. So that, and plus the $350 that you paid, you still profited and the shipping was paid for. So you still profited close to $1,600. 

Rob: That’s right. And if we had sold it in our local venue, we would have not profited… less than half. Yeah, exactly. Or right around what we actually paid for that would have been our profit on the item. So, yeah, it totally, totally made sense for us to, start selling more items on eBay because it reached more people. Now, like I said, the, the retail on that table, was $10,000 to $12,000.

But we could not get the money because there were not enough local people looking for that table. When you get it into a bigger audience, you can ask more money for it. So it [00:08:00] absolutely made sense for us to pay an extra $300, $286, $300 for the fees on that, because we made more money on the back end because we were able to ask more money for that table.

Melissa: Yeah. So the second reason is more of a business accounting type of reason is they handle the sales tax for you. So, just recently in the last couple of years, online sellers have been required to report sales tax to every state that they sell in. If you hit certain thresholds and while we might not hit those thresholds necessarily, it would be a pain to know all of the state laws and file for all 50 states and not just your own cause in the past, it was just, you have to file in your own state. So that would be a big pain in the butt for all resellers. And we were a little worried about what was going to happen when that whole thing went down a couple of years ago, but eBay does collect the sales tax for you and they submit it for you to each state that it’s supposed to go to, so you don’t have to worry about it.

Rob: That’s right. So convenience wise, eBay makes sense to be able to do [00:09:00] all that backend stuff that you do not have to worry about as a reseller. You can just sell your item. eBay keeps track of it. It takes the money out for the sales tax and then they file that for you on your behalf. So that is a very, very big plus when you’re actually selling on eBay, is that correlates, with eBay fees, for sure. 

Melissa: Yeah, and that’s not income tax that is sales tax so it is different. State sales taxes are different for every state. So you have to know your own, but eBay handles – I’m pretty sure they’re close to handling almost all the states. Now, Florida was one of the last ones, so we still had to remit our sales tax, and, and pay it ourselves, but now eBay does it. Now for income tax that’s a whole new ball game and we are not tax experts, so go talk to your accountant. 

Rob: Seek your CPA out. 

Melissa: Your CPA, and ask them what you should be doing in your business. So just a little disclaimer, we’re not tax experts at all, but you do have to still keep track of your income and your expenses for your income tax every year. 

Rob: [00:10:00] Absolutely, which brings us in to the third reason. 

Melissa: So the third reason, your money is made in your purchase. 

Rob: That’s right.

Melissa: So kind of elaborate on that. 

Rob: Well, definitely. If we had bought that dining room table for $2,000, and then we were going to sell it for $2,200. Absolutely not. It does not make sense to sell your item on eBay. So, in our business, our money is made on the buy when you’re getting items that are cheap enough that you’re getting for a very, very low cost, or free, and then you’re able to sell them for higher profits, that’s where the money makes sense. That, I mean, that’s where it makes sense for you to sell on eBay because there’s more money to go around. You can pay those fees on top of the selling price. You can pay those fees and still make a good profit. But if you’re investing in a $100 item, you pay $100 for it, and then you sell it for $150 and then you’re gonna pay whatever it is $15, $20 on eBay fees, it doesn’t make sense. There’s not enough money to go around. So that’s one thing you have to keep in mind. When you think about eBay fees, [00:11:00] are they really worth it, is if you’re buying your items or you’re getting your items cheap enough, that there’s a big enough profit on it, that you can afford to pay those fees out of it. So, we definitely look for very reasonable priced items that we can actually buy, undervalued items in the local market, and then we can bring them to a bigger market, which is eBay and be able to sell them.

Melissa: And it is tempting to you, like if you find something on an app and you’re like, okay, this is for like $200. I can go buy it for $200 and it’s selling for $300, but your profit’s not really there with, after your fees, after shipping, it’s not really there, so it has to be worth it for you. And we do buy a lot of stuff on Facebook Marketplace, and OfferUp, and our thrift stores, and our flea market.

So, and the curb, we find a lot of stuff in the trash. 

Rob: Free stuff. 

Melissa: People get rid of stuff all the time. And if you do come up on one of those items that you know, could be a good deal, or could make you some money, but they don’t want to go down, like it’s fine. You can walk away from those items. 

Rob: Absolutely. 

Melissa: Know that you have, you have that ability to walk away.

Rob: The biggest thing you have to know is the [00:12:00] money is made in the buy. So you always remember that and you get your items as cheap as you possibly can compared to what you can sell them for. And typically when we’re selling something, we try to stick at 50% of retail. So if we’re investing in something, we know what retail is, we can check and see what it’s selling for on eBay, know that we can get probably 50 anywhere from 50 to 70%, depending on conditions and the desire, desirability of that item, is typically where we’re doing. So even on top of that, we’re able to make the money, to be able to pay for the eBay fees. For sure. So.

Melissa: And a little bit back to the business aspect of it, we also don’t have to handle, the whole processing part. We don’t have to handle, the like getting traffic to it, cause that’s the great thing about having the marketplace is everybody already knows it. Cause we could save those fees, put them on a website and drive traffic to the website, but that would be a lot harder to do and it would take a lot more time.

And so it’s just convenient to have eBay, and your item gets in Google too. If people are [00:13:00] searching for that item, it can go into Google. 

Rob: That’s a huge point. If you type in an item that you’re looking for right now in Google, eBay listings should pop up. So that kind of goes back to why eBay is charging for fees.

They’re putting time and effort into selling your items. Now if you put something in Facebook Marketplace, chances are you typing into Google it’s not popping up now, not to say that it never will, but right now, it is not popping up. You have Amazon and you have eBay. Those are the two platforms that will pop up in Google, Google when you are looking for something.

Melissa: Disclaimer, we are not paid by eBay. 

Rob: Absolutely not, or Amazon or Google. We are not paid by any of those. So yeah, don’t, don’t take it the wrong way, but this is a platform that we use. We sell 90% of our items through eBay because of the convenience, because of the traffic, and because we get our items cheap enough to be able to sell and pay for the fees that they charge for the items. 

Melissa: And we did mention that, we don’t ship through Facebook Marketplace or OfferUp. And the reason for that is because right now they don’t have the customer service in [00:14:00] play that they need to have in order to fulfill something if something goes wrong. You get a buyer who claims they didn’t get the item or, you know, whatever, and claims it’s not working when it does work. So all that stuff that you deal with as a seller, you can’t get ahold of anybody in customer service. 

Rob: It’s all through emails and it’s a lot harder to do stuff through email versus getting, picking up the phone. Almost any time of the day you can pick up the phone and you can get somebody to all from eBay on the phone to work you through a situation that you’re having. So the ease of being able to do that, that’s another reason why eBay has to charge fees. They have to be able to facilitate these sales and be able to have the customer service to take care of them.

Melissa: And not that customer service is always pleasant to talk to. We’ve had our fair share of those, not fun times. But they are there and you can usually get to somebody who you can talk to, who you need to talk to you like a supervisor or something, and you can’t talk, talk to a human on Facebook or OfferUp.

And if you’re selling smaller items like $20, $30 items, and you [00:15:00] know that maybe one out of 20 might go south, then you’re still in the positive and it still make, might make sense. For us with our items that are a couple hundred dollars, it’s not worth, 

Rob: the thousands of dollars. 

Melissa: It’s not worth the risk for us to sell and add and add shipping. So, but it could definitely, we know some of our members do very well, with the smalls on Facebook Marketplace and shipping on Facebook Marketplace. So it definitely, and it’s only 5%, which is super nice because that’s a low percentage. So just know that if something happens, you might have to eat an item, like a cost of an item.

Rob: So to recap: traffic, this is what makes sense for us to use eBay is because the traffic that they’re able to get to our items, the ease, the ease of have taking out, the sales tax and taking care of all that bookkeeping. 

Melissa: The back end. 

Rob: Exactly. That we don’t have to do. That is the other, the second reason why it makes sense for us to sell on eBay.

And the third one is definitely because we’re buying our stuff cheap enough that we have money. We have profit into the item that we can afford to pay that money that eBay’s charging, charging to us for the fees, [00:16:00] allocated with the sale of this item. 

Melissa: So the profit’s still there. 

Rob: That’s right.

All right, guys. Thank you so much. 

Yup. Thanks guys. Bye.

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Robert Stephenson

I grew up in Central Florida and have lived here my whole life. I first got into buying and selling items when I was 16 years old, and have been hooked ever since. It has mostly been a hobby that makes some extra cash, but sometimes it serves as my main income as well. I don't plan on stopping any time soon. I find too many fun toys for my family (or myself), and just love the whole process.

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